One person company (OPC)

The One Person Company (OPC) was introduced through the Companies Act, 2013. Like partnership firms having an option to be a Limited Liability Partnership, sole proprietorship can look at a OPC.

This will increase better compliance and put OPC in a better position in availing loans/funding. This will bring in the unorganized sector or sole proprietorship into an organized sector. There are many advantages of being an OPC. Let us see them.

Before going into the benefits of being an OPC, let us see what is an  OPC and how one can form it?

Who is eligible to incorporate	A natural person who is an     a. Indian citizen and     b. Indian resident
Who is a nominee?	The memorandum of OPC shall indicate the name of the person, with his prior written consent, to become a member of the OPC when the sole member dies or becomes incapacitated to contract. A nominee can be a nominee in only one OPC. A nominee can be a member in an OPC. Where a member in One Person Company becomes a member in another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within a period of 180 days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days
How many such OPC can a person register	A person can register only one OPC
What will be the nature of this OPC	OPC will be treated as a Private Limited Company
What will be the suffix	OPC will be suffixed to differentiate from other types of companies
What are the requirements relating to Director, shareholder	Shareholder   : Min 1  Director         : Min 1 Share Capital : No minimum Share capital / maximum : Rs.50 lakh Director and Shareholder can be the same person
Liability	Limited liability (only to the extent of shareholding)
Status	Enjoys the status of Pvt Ltd Company.

Compliance matters

Board meeting	Atleast one board meeting in each half of the calendar year The gap between 2 meetings shall be more than 90 days
Annual or Extraordinary General meeting	Only resolution to be communicated to the meber and minutes to be updated.
Quorum	No quorum required

Mandatory conversion to Private Limited Company

In case the paid up share capital of an OPC exceeds Rs.50 lakh or its average annual turnover of immediately preceding three consecutive financial years exceeds Rs. 2 crore, then the OPC has to mandatorily convert itself into private or public company.

Advantages of an OPC

There are many advantages of being an One Person Company when compared to sole proprietorship. Am not comparing with Partnership, as here the individual wants to be on own and do not want to share the control of his business.

1. Full control of business - faster decision making.
2. Separate legal entity from the person
3. Liability is limited
4. Nominee facility available
5. Having compliance requirement lesser than Private Ltd Co.
6. Being with better compliance, higher chances of getting funding (loan or equity)
7. Being a separate legal entity, can be sold at good valuation, if required.
8. Director's remuneration is allowed as deduction while computing Income Tax
9. Suitable for startups and MSMEs
10. Better chances of being selected as vendor to provide service / good. 

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Sweat Equity by Startups - MCA relaxes rules.

The Ministry of Corporate Affairs (MCA) has amended the Companies (Share Capital and Debentures) Rules, 2014, to allow startups to issue sweat equity shares not exceeding 50% of its paid-up capital upto a period of 10 years from the date of registration. 

What is a sweat equity?

It is part of the Share Capital of the Company which is issued by a company to its directors or employees at a discount or for consideration, other than cash, for providing their know-how or making available rights in the nature of intellectual property rights.

The companies take this route to overcome the initial cashflow challenges.

What is a startup?

An entity is considered as a startup if it meets the following criteria:

Entity	Private Limited Company Partnership firm Limited Liability Partnership (LLP)
Tenure	Upto 10 years from the date of incorporation / registration
Annual Turnover	Less than Rs. 100 crore for any of the financial years since its Incorporation
New entity	The entity should be new one and should not have been formed by splitting up or reconstructing an already existing business
Nature of work	work towards innovation, development or improvement of products/process/services and/or have scalable business model with high potential of employment generation or wealth creation

How this new relaxation help?

Given the business situation due to pandemic  and shortage / preservation of funds, this form of compensation shall be well received by the entrepreneurs. Any Company which is five or more years and less than 10 years of existence can issue sweat equity to its employees to retain them.

CLICK HERE for the notification.

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Process improvement - Good story

One of the most memorable case studies on Japanese management was the case of the empty soap box, which happened in one of Japan's biggest cosmetics companies. The company received a complaint that a consumer had bought a soap box that was empty.

Immediately the authorities isolated the problem to the assembly line, which transported all the packaged boxes of soap to the delivery department. For some reason, one soap box went through the assembly line empty.
Management asked its engineers to solve the problem. Post-haste, the engineers worked hard to devise an X-ray machine with high-resolution monitors manned by two people to watch all the soap boxes that passed through the line to make sure they were not empty.

No doubt, they worked hard and they worked fast but they spent whoopee amount to do so. But when a workman was posed with the same problem, did not get into complications of X-rays, etc but instead came out with another solution.

He bought a strong industrial electric fan and pointed it at the assembly line. He switched the fan on, and as each soap box passed the fan, it simply blew the empty boxes out of the line.

Moral of the story
Always look for simple solutions. Devise the simplest possible solution that solves the problem. So, learn to focus on solutions not on problems. "If you look at what you do not have in life, you don't have anything; if you look at what you have in life, you have everything.

Cheers,

Gopal

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Managing growth & risk in current Indian economic scenario

In today’s world, the growth of a business is critical and is challenging. With inflation adamant of not coming towards south and travelling north direction, RBI hiking the rates (further rate hike on the cards), economy is not so stable, Forex not steady, heavy competition, the business is put to lot of stress on its growth aspects and increase the risk factors.

Let us see what the factors for growth of a business are.

• Strong business strategy. The business should have a strong strategy for its growth, either organic or inorganic.
• Top line v Bottom-line. It should be clear on the growth aspects, do not ignore the bottom-line for the top line growth.
• Market leadership. Unless you are a leader it is difficult to sustain the growth.
• Differentiator. Not only a leader, but you need to be a differentiator with your product or services.
• Sound financial position. Financial prudence is critical for a business growth. Have a good finance practice.
• Focus on core businesses. Develop on the strength and management should concentrate on the core businesses, which yields good results.
• Diversify - known businesses. Do not diversify into unknown areas or unrelated areas. This will put strain on the management, as they have to spend time on the new one and focus will be lost on the existing business.
• Monitor the external environment. Keep a watch on the external factors like the other countries economy (wherever you have operations), political stability, tax regulations, Government policies, etc.,

Challenges for growth

It is easy to prescribe the factors for growth. Is it something that can be achieved, so easily? There are challenges to that. Let us see some of them.

• No / Lack of strategy. In most of the cases, the strategy was missing or not being clear. This is very critical for growth.
• Communicating the strategy. Having a clear strategy is not that important. It has to be communicated to the stakeholders and should have their buy-ins.
• Personal v Professional aspirations. Sometimes, the professional vs the personal aspirations come in the way of growth. This is true in case of a person driven business. 
• Operational level challenges
• Funding – if funding is not available at the right time, growth is at risk 
• Talent – you need to retain the talents to achieve the growth. It is the talent which works for the growth of a business.
• Risk taking ability – business need to take calculated risk, to stay in lead.
• Ability or willingness to change – if the business still in the traditional way of working (like technology), we have grown in that way attitude, it has to change. It is not only ability but also willingness to change is a success factor.

Mitigating risk

The Biggest Risk is Not Knowing the Risk. If you do not know your risk, better know it or forget your business. Ignorance will not help here. I would categorize the risk as CFOS.

•  Compliance risk – something this will destabilize a business (eg. Pollution control)
• Financial risk – if you do not have your homework done properly in this area, you are inviting trouble. Example: Mix of Debt/Equity, not generating cash, borrowing at high rate (higher than your business return) etc.,
• Operational risks– Destruction of facility, non-availability of resources etc., A good disaster recovery plan / Business Continuity Management Program will help a long way in mitigating this risk.
• Strategic risk – if your strategy itself is not correct, you cannot expect to grow. You need to course correct the same, as you move on. Review it periodically.

To sum up, if you want to grow, the following points have to be kept in mind:

• Focus on your strategy
• Engage customers – they are the one who gives you the business to grow.
• Engage employees – they are the one who helps you to achieve the business requirements.
• No compromise on quality – AT ANY COST. If you compromise, you lose even your existing business.
• Open to change. Be open to change. Traditional working will not work for long.
• Monitor the external environment – this is critical as it has direct impact on your business.
• Diversify – in known businesses and do not lose focus on the core business.

All the very best and have a risk free & growing business.

Cheers,

Gopal

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CFO Series 2011 - Organised by Dun & Bradsheet, India

On 10th February, 2011, Dun & Bradsheet (DNB) invited me to give a speech on Managing Growth & Risk in the current economic scenario. The CFO series is a multicity conference across India (in the major metros) organiised by DNB in association with ANT trust. This is one of the easiest topic to speak in today's world, but very difficult to practice or implement.

The meeting started on time and Ms.Preeta (Head  - Learning Solutions) of DNB welcomed the gathering of CFO & Head of Finance. He introduced the speakers, as and when their turn came.

I was the first one to go and luckily I sent my presentation materials to the DNB team and they loaded the same, which made my job easy. Actually, I forgot to take the pen drive, which had the file.

I started the speech, as usual, with some pictures in my presentation material. I covered the following areas during my speech.

• Where are we (India) in terms of the economy (Inflation, Interest rates, Forex reserve). The CFOs have to play in this ground and steer their companies in the growth path.
• The current CFO's role, which is not confined to Finance and Accounts, but beyond that. A CFO should be a catalyst in an organisation. He should be a business person and get involved in key decisions.
• The key drivers for growth - Strategy, Market Leader, Differentiators, Financial prudence, focusing on core business, careful when you diversify.
• Challenges in managing the growth.
• What are the possible risks? My punch line was "The biggest risk is not knowing the risk" Scott Adams cartoon came in handy for this topic.

I summed up the topics discussed with the key take-aways.

Mr. K R Girish (Partner – Tax and Regulatory Services and National Head – Litigation Practice, KPMG) presented the Tax reforms in India and covered the salient features of Direct Tax Code (DTC) & GST. Some of the DTC proposals were really scary, especially the GAAR & CFC. We need to wait and watch what is going to happen from 1-Apr-2012.

Mr. Itzik Amiel Attorney-at-law & Director International Business Development, ANT Group said, “India led, is leading and will lead the world for a new positive era of growth using its creativity, innovation and simplicity also in the financial and tax matters”.  His presentation on the tax benefits on being in Holland was really an eye-opener for me.

Mr. Narasimha Prasad, Zonal Manager – Employee Benefits, Metlife India Insurance Company Ltd said, “It is getting difficult for the common man to cope up with the rising prices hence there is a need for cautious macroeconomic policies to ensure that early action is taken in crucial areas. He presented the Employee Benefits offered by MetLife and solutions through Employee Benefits

Mr. Balusu Markandeswara. Chief Financial Officer, CARE Hospitals, presented the financial model for the healthiness industry and the expectations from the investor.

Though there was a panel session for the questions, the finance leaders asked the questions after each presentation.

The event ended with a note of thanks to the participants and the presenters. The lunch session was useful and helped the participants to network.

I forgot to take my camera and so no photos. If I get some photos from the organizers, I will publish the same.

Cheers,

Gopal 

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Finance Shared Services - What is it?

Today, the Bangalore chapter of ICWAI organised a Professional Development programme and the topic is Finance Shared Services. Mr.S.Rengarajan, Managing Director, Caterpillar India was the speaker.

Mr.Rengarajan explained what Finance Shared Services (FSS) means. He shared his experience in setting up an FSS and the benefits of FSS. He also touched upon the possible risks of an FSS or outsourcing.

He pointed out that efficiency can be built, if the systems are common. If the systems are different, achieving efficiency is bit difficult. Having an ERP environment will make it easy and help centralisation.

He explained how the invoices are settled using scanners, ERP and sitting in a remote place.

The programme was for an hour and it was interesting. Mr.Rengarajan answered the members questions during the Q&A session.

Mr.Rengarajan is an Engineer and a fellow member of the ICWAI. When I googled, I see that he belongs to the PGXPM VI batch of Great Lakes Institute of Management.

It was a great day with too many meetings in the morning and a good session in the evening. Thanks to Simhan for accompanying me.

Cheers,

Gopal

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Change your vision - A nice story

There was a millionaire who was bothered by severe eye pain. He consulted so many physicians and was getting his treatment done. He did not stop consulting galaxy of medical experts; he consumed heavy loads of drugs and underwent hundreds of injections.

But the ache persisted with great vigour than before. At last a monk who has supposed to be an expert in treating such patients was called for by the millionaire. The monk understood his problem and said that for sometime he should concentrate only on green colours and not to fall his eyes on any other colours.

The millionaire got together a group of painters and purchased barrels of green color and directed that every object his eye was likely to fall to be painted in green colour just as the monk had directed.

When the monk came to visit him after few days, the millionaire's servants ran with buckets of green paints and poured on him since he was in red dress, lest their master not see any other colour and his eye ache would come back.

Hearing this monk laughed said "If only you had purchased a pair of green spectacles, worth just a few rupees, you could have saved these walls and trees and pots and all other articles and also could have saved a large share of his fortune. You cannot paint the world green." 

Let us change our vision and the world will appear accordingly. It is foolish to shape the world, let us shape ourselves first.

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Story with a message : Don't judge people by the look & act - understand them

As she stood in front of her class on the very first day of school, she told the children an untruth. Like most teachers, she looked at her students and said that she loved them all the same. However, that was impossible, because there in the front row, slumped in his seat, was a little boy named Teddy Stoddard. 

Mrs.Thompson had watched Teddy the year before and noticed that he did not play well with the other children, that his clothes were messy and that he constantly needed a bath. In addition, Teddy co uld be unpleasant. It got to the point where Mrs. Thompson would actually take delight in marking his papers with a broad red pen, making bold X's and then putting a big 'F ' at the top of his papers.

At the school where Mrs. Thompson taught, she was required to review each child's past records and she put Teddy's off until last. However, when she reviewed his file, she was in for a surprise.

Teddy's first grade teacher wrote, 'Teddy is a bright child with a ready laugh. He does his work neatly and has good manners... He is a joy to be around.."

His second grade teacher wrote, 'Teddy is an excellent student, well liked by his classmates, but he is troubled because his mother has a terminal illness and life at home must be a struggle.'

His third grade teacher wrote, 'His mother's death has been hard on him. He tries to do his best, but his father doesn't show much interest, and his home life will soon affect him if some steps aren't taken.'

Teddy's fourth grade teacher wrote, 'Teddy is withdrawn and doesn't show much interest in school. He doesn't have many friends and he sometimes sleeps in class.'

By now, Mrs. Thompson realized the problem and she was ashamed of herself. She felt even worse when her students brought her Christmas presents, wrapped in beautiful ribbons and bright paper, except for Teddy's. His present was clumsily wrapped in the heavy, brown paper that he got from a grocery bag. Mrs. Thompson took pains to open it in the middle of the other presents. Some of the children started to laugh when she found a rhinestone bracelet with some of the stones missing, and a bottle that was one-quarter full of perfume. But she stifled the children's laughter when she exclaimed how pretty the bracelet was, putting it on, and dabbing some of the perfume on her wrist. Teddy Stoddard stayed after school that day just long enough to say, 'Mrs. Thompson, today you smelled just like my Mom used to.'

After the children left, she cried for at least an hour. On that very day, she quit teaching reading, writing and arithmetic. Instead, she began to teach children. Mrs. Thompson paid particular attention to Teddy. As she worked with him, his mind seemed to come alive. The more she encouraged him, the faster he responded. By the end of the year, Teddy had become one of the smartest children in the class and, despite her lie that she would love all the children the same, Teddy became one of her 'teacher's pets..'

A year later, she found a note under her door, from Teddy, telling her that she was the best teacher he ever had in his whole life.

Six years went by before she got another note from Teddy. He then wrote that he had finished high school, third in his class, and she was still the best teacher he ever had in life.

Four years after that, she got another letter, saying that while things had been tough at times, he'd stayed in school, had stuck with it, and would soon graduate from college with the highest of honors. He assured Mrs. Thompson that she was still the best and favorite teacher he had ever had in his whole life.

Then four more years passed and yet another letter came. This time he explained that after he got his bachelor's degree, he decided to go a little further. The letter explained that she was still the best and favorite teacher he ever had. But now his name was a little longer.... The letter was signed, Theodore F. Stoddard, MD.

The story does not end there. You see, there was yet another letter that spring. Teddy said he had met this girl and was going to be married. He explained that his father had died a couple of years ago and he was wondering if Mrs. Thompson might agree to sit at the wedding in the place that was usually reserved for the mother of the groom. Of course, Mrs. Thompson did. And guess what? She wore that bracelet, the one with several rhinestones missing. Moreover, she made sure she was wearing the perfume that Teddy remembered his mother wearing on their last Christmas together.

They hugged each other, and Dr. Stoddard whispered in Mrs. Thompson's ear, 'Thank you Mrs. Thompson for believing in me. Thank you so much for making me feel important and showing me that I could make a difference.'

Mrs. Thompson, with tears in her eyes, whispered back. She said, 'Teddy, you have it all wrong. You were the one who taught me that I could make a difference. I didn't know how to teach until I met you.'

********************************

I checked the website of http://www.johnstoddardcancer.org/ and found that there is nothing mentioned about Teddy or Theodore ! It may be a fiction. But, it has a point!

You can relate this to any situation. The teacher can be a Manager and Teddy be his sub-ordinate. I really like the way the story is made. Hats off to the person thought about this.

Thanks to Ramesh, my friend, who forwarded this story.

Cheers,

Gopal

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It is one year now....the Satyam fraud !!!

It is on the 7th January 2009 the Satyam fraud was out, more talked about mismanagement ! One year has gone by now. Kudos to the Government, Mr.P.C.Gupta & Mr.Anurag Goel for taking immediate steps to revamp the board and making sure that the company is up and running to bail out the customers and employees.

There were lot of learning from this incident. The Ministry took quick calls and made sure that the legal provisions will not stand in the way of revamping it. It identified the learned people like Karnik, Parekh, Achuthan, Manoharan, Tarun Das,  and others for the Board and made sure that the company is not in problem.

Thanks to Mahindras to take it over and made it possible to put it back on rails.

Today with the case is still going on, auditors working to restate the financial, no one knows the exact impact.

Satyam is an aberration and cannot be generalised. Wish this is one of case and the industry boom in the years to come.

It was this Satyam episode which prompted me to start the blog !!!

Cheers,

Gopal

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Hurray.....Schumi is back !! Sadly.....Tiger is away !!!

Can't hold myself ! The World Champion turned Consultant is now back to the grid. It is not just a sport. You need to manage the vehicle, plan your moves, take quick decision (in milli seconds), plan your pit stops etc., to make sure you are finishing and that too first!

His management skills on the wheels is known to all. Unfortunately, he is not representing Ferrari. He has signed up with Mercedes. Whatever team he may represent, he is a master in that sport, undoubtedly.

With Tiger Woods endorsements at stake, Schumi may get more endorsements. So many endorsements by Tiger Woods are at stake, if he is not going to play Golf. So, here comes another great sporstman. He has signed for 3 years with Mercedes. Marketing managers and Brand managers would have started working on the endorsements. Let us wait and see.

Welcome back Schumi.

Cheers,

Gopal

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What the CEO Wants You to Know - by Ram Charan

This is a wonderful book, which talks of the fundementals of a business, either small, medium or large.

For those who are running a business, they may be knowing the fundementals of the business - how to run, advertise and face the everchanging situations.

This book is for the new generation entrepreneurs, middle level managers who are aspiring to go up in the corporate ladder.

Ram wants the corporate executives to break the sylo mentality and look at the bigger picture on how the business works. He talks about the business acumen one need to have. The concepts of velocity (asset & inventory), Cash generation, margin, growth, how to understand the customers, social operating mechanism etc. was explained very well.

He has shared the experience of Ford, Walmart, GE, GM etc., which are really an experience a manager looks for.

The book was written in a very simple manner comparing the big businesses of the world and the normal street hawker. Both does the same universal law of business, but the magnitude differs.

Suggest this for any entrepreneurs and business managers.

Author     - Ram Charan
Publisher  - Crown Business, New York

Cheers,
Gopal

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Weekly Digest - 25 Oct 2009

Contents

Legal & Tax

• Taxing times ahead for foreign BPOs

Economy

• Top execs of bailed-out cos to take 50% pay cut
• RBI unlikely to alter repo, reverse repo; but CRR may be hiked

Management

• Developing Your Leadership Presence - Harvard Business

Off-beats

• Tirupathi Laddus - caught in controversy
• 6 Indian cities among global BPO hotspots
  

Taxing times ahead for foreign BPOs

The Central Board of Direct Tax (CBDT), the apex direct taxes body,has withdrawn a 40-year old circular, which has the potential to increase the tax that India can claim on a foreign company that has operations in India through a ‘business connection’.
Will it have any impact on the BPO businesses? To know more, CLICK HERE.

Top execs of bailed-out cos to take 50% pay cut

Cracking the whip on the practice of exorbitant salaries, the US government's pay czar has slashed the compensation of top executives by 50 per cent at seven largest bailed-out firms including Citigroup and AIG. The drastic move comes in the wake of widespread criticism of executives being paid huge salaries even as their companies survive on tax payers' money. CLICK HERE FOR FURTHER READING

RBI unlikely to alter repo, reverse repo; but CRR may be hiked

The RBI is unlikely to alter the repo or reverse repo rates at its October meeting, believes Moody’s Economy.com. But a 50-basis point hike in the cash reserve ratio is expected, signaling a tightening bias. Excluding food prices, inflation is at a fairly weak level comparable with the rest of the region. A recent surge in food prices is likely to feed inflation expectations. CLICK HERE FOR FURTHER READING.

Developing Your Leadership Presence

What about when you are pushed in front of the microphone or given very little prep time for something like an introduction of a guest speaker?

This question came from Tonya in response to my previous post on developing your leadership pitch. CLICK HERE FOR FURTHER READING

Tirupathi Laddus - caught in controversy

Early next month, the Madras high court will hear a unique case -- a petition challenging the geographical indications protection given to the famous Tirupati laddu produced by the Tirumala Tirupati Devasthanam. CLICK HERE TO READ FURTHER.

6 Indian cities among global BPO hotspots

Six Indian cities are among the eight top global destinations for outsourcing according to a new survey. Manila and Dublin also figure in the top list of 8 outsourcing destinations according to Tholons Top 50 emerging outsourcing destinations survey. CLICK HERE TO READ FURTHER

Cheers

Gopal

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Don't give up - POSSIBLE is within imPOSSIBLE

Yesterday (24-Oct-09), I attended the IIM Alumni monthly meeting. Everytime, the alumni association invite successful people from various spheres of life and they will share their thoughts.

Yesterday, it was little different. They invited Malathi Holla, an international athlete. What so special about it? It is special. She was affected by the deadly polio at the age of one and struggled her way throughout her life. She was trained and educated in a rehabilitation center in Chennai and moved to Bangalore for her PU. She is from Mangalore belonging to a lower middle class and had about 30 odd surgeries todate.

Sheer determination, courage, spirit made her to shine in the sports (both National and International) world and also in her career as a Bank Officer. She is currently Bank Manager with Syndicate Bank, Bangalore. She has won over 300 medals (Gold, Silver & Bronze) at State, National, International levels at the Paralympics , Asian, World Masters, Open Champinships.

She was conferred the prestigious Arjuna, Padma Shri & Ekalavya Awards. Apart from these, she was awarded the KK Birla Award, Women of the year (1999) by American Biographical Institute, USA, International Women of the year 1999 by International Biographical Center, Cambridge, England. In all she has won close to 30 awards.

What came out of the speech by Malathi is that do not look at your weakness, which is there with everyone in one form or the other. Start living your life the way you want. Motivate yourself. You can change the world if you have courage.

She is running an NGO called Mathru Foundations, a Charitable trust for people with disability. For more info on Mathru Foundation, CLICK HERE

What I have written about Malathi is little, for more reading, you can visit http://www.adifferentspirit.com/home-page.html.  "A different spirit", an authorised biography of Malathi K Holla - published by The Inspired Indian Foundation and authored by M.Anantha Krishnan. The part proceeds of the book sale goes to Mathru Foundation and those who were present bought those books for the Unlimited Inspirations of Malathi and for a noble cause.

Thanks to the IIMB Alumni for organising such a wonderful session, which had an attendance of about 100 (including the family members of the Alumni members).

Let us take things in the positive way and always look for our way, instead of depending on others and waiting for others to help us.

Cheers,

Gopal

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Weekly Digest - 17 Oct 2009

Friends, I just collate the news that I read during the week. I could not do much reading this weekend and hence less contents, but good contents.

Let me take this opportunity to wish you all a HAPPY & SAFE DIWALI

Contents

Economy 

• India may see 8% salary hike this yr, 10.9% in 2010 
• UID scheme: Fingerprinting or iris scan during 2011 census
• Learning from Crises - Lecture delivered by Mrs. Usha Thorat, DG, RBI
• Emerging Market Concerns: An Indian Perspective - Dr. Subbarao, Governor, RBI 

Legal & Tax

• Revised procedure for acceptance of address proof alongwith PAN application 

Management

• How to Handle the Pessimist on Your Team - Harvard Business
  
• The Smart Way to Influence Your Boss - Harvard Business
  

India may see 8% salary hike this yr, 10.9% in 2010

India Inc is expected to witness an average eight per cent salary increase this year and as much as 50 per cent of companies have strong hiring plans for the next three months, a survey by global HR consultancy Mercer says. The Mercer India Monitor quarterly survey also shows an optimistic sentiment for 2010, with salaries expected to rise by as much as 10.9 per cent next year.

"Despite the fact that past year saw slowest growth in a long time, the economy is expected to grow at over six per cent and industry is estimated to see overall average salary hikes at 8 per cent for 2009," Mercer's information product solutions business India leader Gangapriya Chakraverti said. CLICK HERE FOR FURTHER READING

UID scheme: Fingerprinting or iris scan during 2011 census

The upcoming 2011 census will see the government capturing all your 10 fingerprints or do an iris scan for the National Population Register that will come in handy for the ambitious Unique Identification Number project.

The Unique Identification Number scheme, which is expected to roll out the first number in 12-18 months, will be first conferred on the beneficiaries of the the centre's flagship programme under the National Rural Employment Guarantee Act. CLICK HERE FOR FURTHER READING

Learning from Crises - Lecture delivered by Mrs. Usha Thorat, DG, RBI

CLICK HERE to read the lecture given by Mrs.Usha Thorat during the The 'Institute of Banking and Finance (IBF) Distinguished Speaker Series' lecture at Singapore on October 12, 2009. Interesting one.

Emerging Market Concerns: An Indian Perspective

CLICK HERE to read the remarks by Dr. D. Subbarao, Governor, Reserve Bank of India at G-30 International Banking Seminar in Istanbul on October 5, 2009 organized on the occasion of the IMF-World Bank Annual Meetings 2009.

Revised procedure for acceptance of address proof alongwith PAN application

AS per the circular no 321 the additional procedure for acceptance of proof of address alongwith PAN applications received from Individuals and HUF are as under:

1. While accepting “Application for allotment of PAN (Form 49A)” if both the addresses (residence and office) are mentioned in the application form and office address has been selected as communication address, then POA has to be collected for residence as well as office address. CLICK HERE TO READ FURTHER

How to Handle the Pessimist on Your Team - Harvard Business

Turning Negativity into Productivity
Dealing with a pessimist on your team can be a frustrating and time-consuming experience. Attempts to ignore or counter frequent negative comments may simply incite further negativity. Good news: by being proactive you can help the pessimist change his behavior and enable your team to achieve greater productivity. CLICK HERE TO READ FURTHER

The Smart Way to Influence Your Boss - Harvard Business

How can I sell this idea to my boss?
This is something that executive coaches hear regularly. It usually comes from someone seeking to lead from the middle. To begin to answer this question, let me tell you a story. TO READ THE STORY, CLICK HERE

Cheers,

Gopal

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Stories with a message....Buddha's life & Anger

Email forwards...nice management stories:

(a) A story from Buddha’s life…

Once Buddha was walking from one town to another town with a few of his followers. This was in the initial days. While they were travelling, they happened to pass a lake. They stopped there and Buddha told one of his disciples, “I am thirsty. Do get me some water from that lake there.”

The disciple walked up to the lake. When he reached it, he noticed that some people were washing clothes in the water, and right at that moment, a bullock cart started crossing through the lake. As a result, the water became very muddy, very turbid. The disciple thought, “How can I give this muddy water to Buddha to drink!” So he came back and told Buddha, “The water in there is very muddy. I don’t think it is fit to drink.”

After about half an hour, again Buddha asked the same disciple to go back to the lake and get him some water to drink. The disciple obediently went back to the lake. This time he found that the lake had absolutely clear water in it. The mud had settled down and the water above it looked fit to be had. So he collected some water in a pot and brought it to Buddha. Buddha looked at the water, and then he looked up at the disciple and said, “See what you did to make the water clean. You let it be…. and the mud settled down on its own – and you got clear water. Your mind is also like that! When it is disturbed, just let it be. Give it a little time. It will settle down on its own. You don’t have to put in any effort to calm it down. It will happen. It is effortless.” What did Buddha emphasize here? He said, “It is effortless.”

Having ‘Peace of Mind’ is not a strenuous job; it is an effortless process! When there is peace inside you, that peace permeates to the outside. It spreads around you and in the environment, such that people around start feeling that peace and grace.

(b) Don't keep distance

A saint asked his disciples, 'Why do we shout in anger? Why do people shout at each other when they are upset?'

Disciples thought for a while, one of them said, 'Because we lose our calm, we shout for that.'

'But, why to shout when the other person is just next to you?' asked the saint. 'Isn't it possible to speak to him or her with a soft voice? Why do you shout at a person when you're angry?'

Disciples gave some other answers but none satisfied the saint.

Finally he explained, 'When two people are angry at each other, their hearts distance a lot. To cover that distance they must shout to be able to hear each other. The angrier they are, the stronger they will have to shout to hear each other through that great distance.'

Then the saint asked, 'What happens when two people fall in love? They don't shout at each other but talk softly, why? Because their hearts are very close. The distance between them is very small...'

The saint continued, 'When they love each other even more, what happens? They do not speak, only whisper and they get even closer to each other in their love.

Finally they even need not whisper, they only look at each other and that's all. That is how close two people are when they love each other.'

MORAL: When you argue do not let your hearts get distant, do not say words that distance each other more, else there will come a day when the distance is so great that you will not find the path to return.

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Fools Work Hard..... for Others.

Last weekend, I spent my time in reading a book "Fools work Hard....for Others. Smart People Work Hard For : Freedom From The Race" by Ravindra Potharaju. It was a nice reading and written very well in a narrative manner. The author created 3 fictitious characters (Bob, Tom & Lou) to explain the concept through dialogues between them.

The concepts were not new but was put very aptly. The author tries to explain how to achieve freedom from the ‘Race of life’. "Fools depend on others for Security" and "Smart guys depend on themselves for Security". He says that he is not against working, but make a plan for future while in job, which will expedite the process to Freedom.

The process to Freedom, he says, can be achieved by following the 7 steps.

1. Choose "Freedom-based Goals"
2. Cultivate "Natural Motivation"
3. Fall in "Love with Wealth"
4. Align "Natural Talents" to your profession
5. Develop the "Right Skills"
6. Prepare and Execute a "Simple Plan"
7. Review "Progress" and "Motivation Fuel"
   

In essence, the author says, Fall in love with wealth, as you do for your children. Deploy your natural talents with the right skills. Develop a simple plan and monitor the same.

The plan is nothing but an Income and Expenditure statement with a slight difference. The bifurcates the Income into Assured Income (dividend, Interest, Rent etc.,) and non-dependent (like salary). He tries to increase the non-dependent income. While on expenditure, he tries to control the expenditure (not cutting them). Then he is re-investing the surplus to generate more independent regular inflow of money. Though he does not talk about how to generate the wealth or to get more returns, he discusses on how to get into the habit of getting regular income. He explains how to compute the number of year to achieve freedom:

N = Freedom Flow/ (AIOP * Ploughback)

Where:
N = Number of years required to achieve threshold of “Freedom”
Freedom Flow = Total Expenses – Assured Income
AIOP = Assured Income that can be generated as a percentage of ploughback
Ploughback = Total Income – Total Expenses ( the amount available for conservation to assured income)

Assured Income = Rentals, Dividends, Royalties, Interest and others
Non Assured Income = Salary, Bonus, etc.,
Total Income = Assured Income + Non Assured Income

To make this equation work, the Freedom flow should be as low as possible. That means, increase the Assured Income and reduce the total expenses. The more you reduce your expense, freedom will be achieved faster. The AIOP to be maximised. This can be achieved by taking proper financial advise.

To conclude, if you feel that you are not living the lifestyle of your choice, dependent of your monthly salary, being in a job you don't like or you are not able to put your natural skills to your job, I suggest you to read this book. It will not give you answers, but can guide you.

Author : Ravindra Potharaju
Publisher : Vikas Publishing
Price : Rs.150 (~$3.50)

Cheers,
Gopal

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Email etiquette

Nowadays, it is very rare to see anyone writing with a pen or pencil (other than students). Writing has become a rare thing. I was invited to attend a lecture on Handwriting analysis in the IIMB alumni association monthly meeting. The lecturer, who is running a Handwriting Analysis institute asked the members present to write a paragraph with a pen. He then analyzed two of the handwriting and gave a quick analysis of the persons on their emotions, traits etc., I asked him a question - "where in the world people write, especially in corporate world". To which he answered the inner conscious of an individual remains and can be found in the handwriting analysis. He also added that there is nothing called a "GOOD" or a "BAD" handwriting. It is only LEGIBLE or ILLEGIBLE handwriting. So, the handwriting may change, but the characteristics of the handwriting will not change.

But our writing habit has gone and we live in 'e-Mail' world. When my aunt asked why i am not writing letters to her, I told it is better to create a mail id for her and her son can read out the mail to her. Even the personal touch of signing appreciation letters, signing greeting cards, signing a note of thanks etc., are now done through e-mails. Whoever you may be, you will now have a mail id and a mobile number to be identified, if not people are not others will not even look at us.

With emails being THE mode of communication, either personal or official, there are some etiquette that are necessary to portray the individual's stature. These are the basic things, which were ignored in current fast world. Some examples are :

the - da
This - dis
Your - UR
You are - U R
Tomorrow - tmrw
welcome - wc

Corporates, especially BPOs, KPOs train their employees on how to write / respond to an email. It is very critical, as it carries the image or the organisation. The mail should be responded quickly, unlike the usual snail mail. There should be present all the parts of a normal letter (address / salutation, body of the letter, conclusion, signature etc.,)

The email should be short and crisp. If it is lengthier, then use headers with bullet points or write a document and attach it to the mail. Do not use BOLD or RED colour font, unless you need to emphasize a particluar point or convey a deadline. Before sending the mail, do a spell check!

I came across a site, which explains how to send effective email replies. Click here for the page

Guide training to your team members on the email writing technique, as it reflects your team's image to the outside world.

Cheers,
Gopal

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Sitting Late v Working Late - Rejoinder

Working late and Sitting late - it differs, like Office Hours & Working Hours. People say that I spend 15-20 hours a day in office, but effectively they would have worked/spent 6-7 hours. If you have work and sit late (having not able to complete in the regular office timing) to complete your tasks, it is fine. But you need to be conscious that you were putting all your efforts towards your tasks during your normal office timing. These sort of situations will be occasional. If it is regular, then there is a problem. My father is my mentor on time management. I need not look for any book, if I follow him.

My father (retired now) used to ask me, what holds me in coming back home after the office timing. I tell him I had work and need to stay back. I am into the accounting department and it is a contagious habit. But looking back, I don't understand why I was spending that much time. At times, I take too much on my plate and try to complete it or one of the excuses, mentioned in my earlier blog.

When my father met my CEO (of my earlier company), he asked him why you all sit late. For which he said, I leave the office on time and these youngsters stay back for completing the work.

My father too worked in Finance & Accounts and was head of Accounts in a Danish company. He used to say - If the department head see anyone sitting regularly late in office, he need to explain why he is sitting late - only 2 options (1) Given excess work or (2) he is inefficient. So the culture was set in that organization.
But now, it is rare to find such managers. When I worked in UK, my manager used to chase me out, when I wait for my colleague to finish his work, thinking that he may require my assistance. But what my manager told me made me to think - He said, he has work and could not finish in 8 hours, so he is sitting. If he needs your help, he should have told you before and not after the office hours. By 5.00pm, all will start leaving the office, either to meet their girl/boy friends or to play some games or for beers.
Here in India, that culture (I mean effectively work during the 8 hours) has to pick up and am sure will come soon.

Another question from my father, which I am not able to answer is - With all gadgets, Software why you all take more time to complete the job, when the same volume of work was there in his time used to get finished on time. In earlier days, they did not have ISD,Chat, Mobile, Computer, Softwares (like Tally), scanner, etc., but managed to complete their job but with all these things, we are unable to complete the job on time.

All boils down to one thing - We don't plan well, our tasks.

If we plan to leave office by 5.00pm, we can. But are we doing it? No. If we have to catch a flight by 8am, we get up by 5am and reach the airport atleast by 7.30am. Why? Otherwise we will miss the flight. So, it is driven by the individual mindset and planning. My father still plans well and carry out his plans very well. He never missed out any deadline and worst part is he reminds me periodically of my deadlines!

Friends,

• Plan well your tasks, give priority to important tasks .
• Get out of the habit of staying back at office, if you don't have work.
• Do a root cause analysis on what made you to sit late?
• Never encourage your juniors to sit late, monitor their work
• Come home, teach your child whatever you can in their subjects
• Of all, teach them the importance of time, so that they don't spend much time in office.
  

If you want to know how much you spent late at office without spending time with your family, just deposit Rs.25 for every hour you stay after normal office hours to a bank account. You will know after 10 years how much you missed your family by looking at your bank account!

Time is valuable and spend it wisely and usefully.

Cheers,
Gopal

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Time Management

I got the following mail from my friends....and wanted to discuss.
***********************************************************************
Mail sent by Narayan Murthy to all Infosys staff:

It's half past 8 in the office but the lights are still on... PCs still running, coffee machines still buzzing...
And who's at work? Most of them ??? Take a closer look...

All or most specimens are ?? ...Something male species of the human race...

Look closer... again all or most of them are bachelors...

And why are they sitting late? Working hard? No way!!! Any guesses???
Let's ask one of them...
Here's what he says... 'What's there 2 do after going home...Here we get to surf, AC, phone, food, coffee that is why I am working late...Importantly no bossssssss!!!!!!!!!!!'

This is the scene in most research centers and software companies and other off-shore offices.

Bachelors 'Passing-Time' during late hours in the office just bcoz they say they've nothing else to do...

Now what r the consequences...

'Working' (for the record only) late hours soon becomes part of the institute or company culture.

With bosses more than eager to provide support to those 'working' late in the form of taxi vouchers, food vouchers and of course good feedback, (oh, he's a hard worker.... goes home only to change..!!).

They aren't helping things too...

To hell with bosses who don't understand the difference between 'sitting' late and 'working' late!!!

Very soon, the boss start expecting all employees to put in extra working hours.

So, My dear Bachelors let me tell you, life changes when u get married and start having a family... office is no longer a priority, family is... and

That's when the problem starts... b'coz u start having commitments at home too.

For your boss, the earlier 'hardworking' guy suddenly seems to become a 'early leaver' even if u leave an hour after regular time... after doing the same amount of work.

People leaving on time after doing their tasks for the day are labelled as work-shirkers...

Girls who thankfully always (its changing nowadays... though) leave on time are labelled as 'not up to it'. All the while, the bachelors pat their own backs and carry on 'working' not realizing that they r spoiling the work culture at their own place and never realize that they would have to regret at one point of time.

So what's the moral of the story??
* Very clear, LEAVE ON TIME!!!
* Never put in extra time ' unless really needed '
* Don't stay back unnecessarily and spoil your company work culture which will in turn cause inconvenience to you and your colleagues.

There are hundred other things to do in the evening..

Learn music....
Learn a foreign language...
Try a sport... TT, cricket..........
Importantly,get a girl friend or boy friend, take him/her around town...

* And for heaven's sake, net cafe rates have dropped to an all-time low (plus, no fire-walls) and try cooking for a change.

Take a tip from the Smirnoff ad: *'Life's calling, where are you??'*

Please pass on this message to all those colleagues and please do it before leaving time, don't stay back till midnight to forward this!!!

IT'S A TYPICAL INDIAN MENTALITY THAT WORKING FOR LONG HOURS MEANS VERY HARD WORKING & 100% COMMITMENT ETC.

PEOPLE WHO REGULARLY SIT LATE IN THE OFFICE DON'T KNOW TO MANAGE THEIR TIME. SIMPLE !

Regards,
NARAYAN MURTHY
*********************************************************************************
I do not want to debate on the statements made by Narayanmurthy. But here are my thoughts:

Is the mail really from Naryanmurthy?
Is he asking the bachelors to get a girl friend?

Am I going to discuss on the above?...................NO

Do not look into who sent the mail to whom, but look at the contents. It not only says that the resource should be efficient on time but also on the wastage of resources. In these economic slowdown, saving resources is very critical. Let us discuss on these lines.

1. Why people sit late in the office?

Excuse #1
There are many reasons for that. Primarily it is the people who themselves get into the habit of the sitting late. Very few cases, where the Manager sits late and expect the team also to sit late along with him. My boss tells me that I have the disease of sitting late. As most of you know, this is common in Accounts department. Being in a support function, all the day the accountant will work for others. After the office hours, he will feel relieved and start working on completing his own activity. This is how the practice of sitting late will start and become a habit. Office will become home and we start spending 8 hours at home.

Excuse #2

When you start your career, though you want to leave on time, you will not. Why? Others are sitting. How will that be treated? So you get used to that and that will become a practice. This reminds me the story of the Monkeys in the cage. The new monkey will also get used to the culture!!!! (I am not narrating the story, as most of you know this story of new monkey trying to get the banana and get beaten up by the others). This will continue in your subsequent organisations also.

Excuse#3
When you join an organisation, you will spend time in learning the process and to increase your learning curve, you spend time in the office and it will turn out to be a practice.

Excuse#4
When you complete your task on time and leave home early you get more work. So you will spend time to complete your work, so that you will not get more work. To be precise, you do not want to be penalised for the inefficiencies of others.

The excuse list is not exhaustive.

2. What can you do to avoid this late sitting?

• When you join a company, understand the work culture. If possible, before joining the company itself.
• After joining, make sure that you are not whiling away your time in cafeteria and then spend late hours in the office to complete your tasks.
• Make sure you prepare a To-Do list and prioritize your schedules. As Stephen Covey in his "The Seven Habits of Highly Effective People" says - “The key is not to prioritize your schedule but to schedule your priorities.”
• If you notice any dependency on some department or person, try to work with them closely to understand their concerns and address them, so that you get your support on time. After all, it is a team work.
• Improve your process efficiency. Cut redundant tasks, automate.
  
• Do not encourage unnecessary intruders. If you are busy, ask them to come later.
• If your manager gives you an unscheduled job and if you are in some other important work, as him which one to prioritize. Open discussion will be give good times, most of the times.
• If nothing works, talk to your manager. If it is not working, talk to your manager's manager. Even, if it is not working.....you have to take the call !!
  

In this globalized economy, we are to work on various time-zones and our body-clock is challenged. So, plan your time effectively. Spend time with your family, develop some habits. Enhance your skill set. Acquire new skill set.

I have not elaborated much on the points, as I would like to hear more from my friends on their views.

Cheers,
Gopal

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