passline business magazine jan-feb 2011

January 15-February 14 , 2011 PASSLINE

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Cochin Dies and Moulds PrivateLimited, founded by Mr M GSukumaran, has proved beyonda shadow of doubt that industrycan not only survive but prosperin Kerala with enlightened andscientific management, a dedi-cated and devoted workforceand quality products and ser-vices. Mr Sukumaran’s grouphas stakes in the non-bankingbusiness too, with its Homfit Fi-nance and Leasing Limited(HFLL) having grown into a verysuccessful financial servicescompany providing easy fi-nance to consumers in bothtowns and villages.

Passline News Service

erala is often dubbed a perilously unfit place for entre-preneurs to set up projects, especially big ones, be-cause of its excessive attachment to politics and its

militant trade unionism, which destroy the entire foundation ofan establishment. But there is one company which has provedbeyond a shadow of doubt that industry can not only survivebut prosper in the State with enlightened and scientific man-agement, a dedicated and devoted workforce and quality prod-ucts and services. The company is Cochin Dies and MouldsPrivate Limited which has been running successfully and prof-

itably for years. Located in the industrial estate of Athani inThrissur district, Cochin Dies and Moulds manufactures andmarkets plastic and allied mouldsand components. With hi-techmodern equipment for toolmanufacturing, Cochin Diesand Moulds, the first ISO9001-2008-certified companyin the field, has been baggingorders from over 30 frontlineprivate- and public-sectorcompanies, including presti-gious To page 3

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Constant modernizationis the company's featureFrom page 2

establishments like Indian Space Research Organization(ISRO), for making moulds for plastic and rubber products.

There was a time when Keralites had to go to Bombay(Mumbai) to get caps for bottles because no company wasmanufacturing bottle caps in the State then. This made Mr M GSukumaran think of launching a unique product much in de-mand but scarce in Kerala. Thus was his Cochin Dies andMoulds Private Limited born in 1990.

It goes to Mr Sukumaran’s credit that he could foresee thepotential of a unit for tools and dies in the small-scale sectoreven in the 1980s. Now, by securing orders from plastic, rub-ber and other factories, Cochin Dies and Moulds has becomea mega-unit in tool and die manufacturing in the private sector,says Mr Sukumaran, Chairman and Managing Director of thecompany.

The unique feature of the company is its attempt to con-stantly modernize the tool room. For this Mr Sukumaran hasnever missed a chance to attend industrial seminars and ex-hibitions all over the world. He invests a large portion of thecompany’s profit to make his products most modern, and even

Malayil Gopalan Sukumaran alias M G

Sukumaran, son of Gopalan Malayil, is a well-known

personality in the political and social circles of

Thrissur. His political career began with his becom-

ing a member of the Ayyanthole Grama Panchayat in

1980 and holding positions in the Youth Congress.

He also served as Thrissur Block Congress Commit-

tee Secretary and Vice-President of the SNDP

Thrissur Union. Mr Sukumaran is the General Secre-

tary of the Thrissur District Consumer Guidance and

Research Society of India and Founder-Chief

Promoter-Vice-President of Cherukida

Vyvasayi Welfare Cooperative Soci-

ety Limited.

Mr Sukumaran

i n n o -

vated and successfully experi-

mented with novel reforms in micro

entrepreneurship. His focus is on

Gandhian vision development, which

he feels should start from villages.

He has always been striving to help

the poor segment of people.

Above all, Mr Sukumaran is a very

successful businessman with an enviable

knack of developing business ventures. He has a

100% track record of converting new ventures

into grand successes.

His normal day starts at 5 am and often ends

at midnight. He visits all the business units daily

and makes an appraisal of the daily business in-

teracting with senior staff.

Enviablepersonality

updates the machinery in his factory, which has the comput-erized CNC machine and the spark erosion machine etc for diemaking. Moreover, hot runner moulds that help make a productwithout even wasting a bit of raw materials are manufacturedat Cochin Dies and Moulds.

Mr Sukumaran selects graduates from the NTTF, CIPETand various other prestigious institutions to be in chargeof various operations in his company.

The company has now become thetopmost maker of moulds for PVC and

all types of plastic products, such as engineering compo-nents, household items, bottles and caps and various typesof fast cycle hot runner moulds etc.

Mr Sukumaran, who started a finishing school of hisown for grooming expert workers, is now busycompleting his new project, the M G SInstitute of Technology, at Veloor inThrissur district, where courseswill start during the coming aca-demic year. The institute’s aim isto familiarize ITI and other di-ploma holders and engineer-ing graduates with newtechnology and innova-tions in their sectors andto make them ‘industry-ready’.

Similarly, thecompany will alsostart production ofplastic-allied industrialproducts.

Mr Sukumaran, who says that sup-plying the best-quality moulds and diesfor any industry within the mini-mum time possible is the

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Stakes in non-banking business tooFrom page 3

secret of his success, has stakes in the non-banking business too, with Homfit Finance andLeasing Limited (HFLL) heralding his entry intothe field. Mr Sukumaran’s wife is a bank pro-fessional in Thrissur.

HFLL, an RBI-approved institution startedin 1992 with headquarters in Palakkad, hasnow shifted its corporate office to Thrissur.Since its inception HFLL has grown into a verysuccessful financial services company pro-viding easy finance to consumers in bothtowns and villages. Mr Sukumaran attributesits success to the fact that it has become adependable destination for villagers for theirfinancial requirements. Keeping this in mindHFLL has developed several innovative andpopular gold loans, hire-purchase loans, busi-ness loans, money transfer facilities, personalloans, microfinance schemes and insuranceservices. Two of these are Gold PurchaseScheme and Micro Entrepreneurship.

HFLL Gold Strength Loan: This loanis different from other gold loans in severalrespects. For loans up to Rs 5,000, only 7%interest is charged, which is one of the low-est rates in the industry. Daily collection ser-vice is provided by HFLL which helps the cus-tomer in a big way to make his payments promptsans losing his gold due to default in payment.Moreover, 125% to 150% of the price of thegold kept as security will be given as loan forloyal customers. Remittances can be made atany branch of HFLL as all the branches arelinked online. Insurance coverage for gold isprovided. Locker facility is also available at all

branches. Loans will be disbursed withinthree minutes and the whole process is dis-played on the computerized screen.

HFLL MY Own Vehicle Loan (hire-purchase loan): HFLL provides loans tocustomers to own two-wheelers, three-wheelers, four-wheelers and luxury vehicles.Its vehicle loans have simple procedures andthe lowest interest rates. The daily collectionservice makes payment of instalments easier.Mobile services are also provided.

HFLL Solutions (business loans):Having been successfully providing loans forsmall enterprises for the past several years,HFLL has now introduced HFLL Solutionswhich are loans for the business class. These

loan amounts range from Rs 25,000 to Rs 5lakh for 6 months to 36 months. Very low in-terest rates and easy instalment schemes arethe advantages of HFLL Solutions. Daily col-lection service makes the payment procedureeasier.

HFLL Money Transfer: This is an easyway to send money from the Gulf to one’s kithand kin in Kerala. The money will literally reachthe doorstep through direct home deliveryservices.

HFLL Support (personal loans): Thisproduct is devised keeping in mind that everyperson will have personal financial needs.HFLL Support provides personal loans on per-sonal security of customers and that too atlow interest rates.

HFLL Companion (Micro Entrepre-neur Scheme): This is an innovative prod-uct devised as part of HFLL’s social commit-ment to provide financial support and empow-erment to women in rural areas to help themstart ventures. HFLL will provide technicalsupport and financial backing for such ven-tures through this scheme.HFLL Insurance: HFLL provides a singlewindow for all insurance needs through a tie-up with a reputed Insurance Regulatory andDevelopment Authority (IRDA)-approved insur-ance services broking firm. The insuranceneeds of different sectors of society will bemet by HFLL under this service. Special insur-ance products for pregnant women, studentsand so on have already been launched.Future plans: HFLL has plans to grow intoa financial supermarket very soon. It will open25 branches during the current financial yearin Thrissur, Palakkad and Malappuram districts,most of which will be in small towns likeValakkavu, Vadakkekkad, Althara, Anjoor,Mullurkkara, Maranchery and Ayyanthole and1,000 branches across Kerala within fiveyears. Its vision is to deliver all its services onthe doorstep of the customer by 2015.

A new service called ‘Dial a Loan’ will belaunched in Thrissur soon.

HFLL is in safe hands to realize its visionunder the able leadership of eminent person-alities like Mr Sukumaran, who is also FounderChairman and Director of Subscribers ChitsPvt Ltd and Fair Kuris India Ltd based inThrissur, and Directors, Mrs RajaniRamachandran, Mr Krishnakumar and Mr JithinM Sukumar.


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Varghese Paul

Editor & Publisher

VARGHESE PAUL

Thiruvananthapuram

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Delhi

AFGANULLAHPh: 09910498222

Manager-Marketing

SAJAN K

Keethara Publications Pvt Ltd38/125 1st Floor,

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Kochi-682 035, Kerala, India.

Phone : +91 484 4027002

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www.passlinebusinessmagazine.in

I think India is the only nation in the world where people discuss bribe and corruption lightly in their

drawing rooms and in teashops. Whenever or wherever a few people gather, the topic of their discussion

usually is which political parties, politicians or bureaucrats are going to be trapped during the day. One group

may argue proudly that in the next scam the political party they owe allegiance to will surpass the other. The

other group will not give in easily and they will speak for their favourite party and their icons. In India news about

a scam in the media hardly lingers for more than a day or two as the next one takes over immediately. People

treat such things as if they are sipping a cup of tea, even if the amounts involved in the scams run into billons

of rupees.

Both our print and electronic media are today competing with each other in exposing at least one story of

this kind every day. But I shudder to recall to memory the recent remark by a leading Supreme Court lawyer that

eight of our former Supreme Court Chief Justices were corrupt and they amassed wealth disproportionate to

their known sources of income amounting to crores of rupees. Nowadays the common people in India are

forced to believe, much against their will, that our judicial system is corrupt from top to bottom thanks to the

recent revelations appearing in the media about the judiciary. The law takes its course, without any mercy, if a

small person commits a crime and he/she is punished and thrown behind the bars. But those who are

responsible to hold high the mantle of justice and trust indulge in favouritsm, corruption and bribery with

impunity. Who is responsible for this situation? Unfortunately the present judiciary has lost all morals, unlike

in the past, and those who are supposed to prevent evils surfacing are sitting tight and just watching things.

They are unable to move a finger against these things because they too are sailing in the same boat.

Footnote: I think it is high time that the Union Government introduced new units for measuring money.

Lakhs and crores no longer work; there are too many zeros to handle. The huge amounts mentioned in the

recent scams have an upside: they have given us convenient new units for communicating large figures: Rs

1,000 crore—1 Radia; Rs 10,000 crore—1 KalmadI; Rs 1,00,000 crore—1 Raja.

This will be easier for us to account for large numbers. For example;

Mukesh Ambani’s new residence in Mumbai costs 4 Radia;

India’s total annual subsidy on kerosene is Rs 2 Kalmadi;

India’s loss in the 3G scam is approximately Rs 1.7 Raja.

W

From the Editor

Radia, Kalmadi, Raja…

Sir,—Apropos your editorial in the December is-sue of PASSLINE urging the authorities to initiate stepsto bring all citizens irrespective of age, caste, creed andreligion within the ambit of health insurance, I like toremember and remind the readers of a period when allparties, political leaders and the media used to raisethe slogan ‘Health for All by 2000’. It however went intooblivion by the year 2000 when strange, chronic andfatal malaises without remedy or treatment began toleave the diseased to die began to afflict mankind.

Therefore, it is high time the Government introducedsuch an insurance scheme covering the entire popula-tion

Ajith Kumar,e-mail

Sir,—The editorial was superb. We believe that

the authorities concerned should take action to bringall citizens within the ambit of health insurance. Thiscan start with making the scheme compulsory for Gov-

ernment servants and members of their families.

The public should be educated on the variousmediclaim schemes run by insurance companies asmany people are not aware of these. The agents con-

cerned should also get proper training as awarenessshould be created among villagers and uneducatedpeople.

Sadanandan K A and Group of Senior Citizens,e-mail

Readers' views

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Though Kerala is

ahead of all other

States in the country in

social development

and has been able to

prosper individually, it

is paradoxical that eco-

nomic growth contin-

ues to evade it. Why is

it that the State has

failed to grow eco-

nomically in tandem

with its other advan-

tages?

By A Special Correspondent

erala is undergoing a paradoxical situation:even as its people are prospering, the Stateis falling far behind in economic growth.

Because of the highly successful social wel-fare programme it initiated a few years ago Keralanot only achieved universal literacy rates but lifeexpectancy levels comparable to those of manywestern societies. Surprisingly this is not re-flected in the economic development of the State.

According to Dr P C Cyriac, eminent eco-nomic analyst and writer, the ‘Kerala Model’, theterm used to explain the phenomenal achieve-ments of the State in quality of life/human devel-opment indices, is on a par with Western coun-tries like the US, while the per capita incomehappens to be very low, maybe one-fiftieth ofthe US figure. “This achievement became pos-sible only because of the spread of educationhere. With good education, the people managedto get jobs outside Kerala in other parts of India,and also abroad. Since these people sought toretain their links with their roots, they sent moneyhome regularly. And here, though agriculture andindustry failed, the services sector flourishedon the strength of these remittances. This modelwill work so long as the skill-sets available herecontinuously get upgraded/modified to meet thechanging demand patterns outside,” says DrCyriac.

Despite the failure in agriculture and indus-try, money flows in, and with it the services sec-tor flourishes and income levels too rise thanksto the enterprising and hardworking Keraliteswho choose to go out, adds Dr Cyriac.

Studies show that in Kerala the percentageof the population in the 15-to-25 age group isrising 1.6% annually. This means that to keep allthese young people employed, it will have to cre-ate thousands of jobs a year. In order to do that

its economy needs to grow at least 10% a year.Current levels of growth, however, do not giveany promise that this is possible in the near fu-ture. There is, on the contrary, evidence thatKerala won’t make it. The claim of the State’sFinance Minister, Dr Thomas Isaac, that Kerala’sgrowth rate is now 10% when even the nationalfigure is far below it is liable to be contested bymany.

Since the formation of the State on Novem-ber 1, 1956, Kerala has been ruled almost alter-nately by the Left Democratic Front (LDF),headed by the Communist Party of India (Marx-ist), and the United Democratic Front (UDF), ledby the Congress. The Communist parties werebelievers in the message that profit is synony-mous with exploitation, markets should be ruth-lessly curbed and wealth redistribution (ratherthan its creation) should be the Government’spolicy focus. Though this view changed laterand even the communists started harping on pri-vate investment for progress there had in be-tween been decades of squandered economicopportunities. “The LDF governments in powerin Kerala have always openly supported the non-performing public-sector units and wasted a lotof money. The UDF governments have been to-tally lacking in political will and have failed topush forward their project proposals in the faceof violent opposition from the Left. Perhaps theycould have forced through at least a few projectsif only they had awarded them after a transpar-ent selection/tender process,” says Dr Cyriac.

After the country embraced privatization inthe early 1990s, and the overall economy perkedup, reform could not take much root in this part ofIndia for many reasons. One was the absenceof enlightened leadership or visionary leaders inboth the UDF and LDF dispensations. Anotherwas the utter inability of the rulers to present theState’s case at appropriate forums and get its

due share in developmental activities. Some oth-ers were self-inflicted.

There is practically no investment in the State.Scores of clearances are needed for approvalof an investment, domestic or foreign. There is awidespread feeling among investors that in spiteof reforms there is simply no way of doing busi-ness here without being trapped by the bureau-cracy, for which Kerala has unique genius.

A greater role for the private sector has onlybeen realized late by the ruling fronts in the State,especially by the LDF. That this realization alsodawned on the CPI (M), one of whose nomi-nees, Mr Elamaram Kareem, presides over theIndustries portfolio today, was a good sign andexplains whatever little has happened on theindustrial front.

It is reported that one of the major decisionstaken by the third International Congress onKerala Studies, organized by the ruling CPI (M),held at Thiruvananthapuram recently was theclarification of the position of the party on majorinfrastructure projects such as national high-ways and water transport networks. ‘‘Huge in-vestments are required for the renovation of roadand water transport networks in the State,’’ saidDr Thomas Isaac, who was also the AcademicCommittee Secretary of the study congress,while summing up the three-day deliberations.

The vision document prepared by the con-gress says private investment can be acceptedfor developing national and State highways andthe North-South express rail corridor. This is anendorsement of the Union Surface TransportMinistry’s stand that national highways can bedeveloped only on the BOT (build, own, trans-fer) basis. The vision document makes it clearthat private investment in road developmentshould be confined to national and Statehighways. ‘‘It is the responsibility of the

To page 7

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6 DEVELOPMENT


77

From page 6

State Government to find investment for reno-vating village, block and district roads in theState. For this, we need to spend Rs 10,000crore in the next five years,’’ says the docu-ment. “For raising this much money, takingloans is the only option,” said Dr Isaac.

Sadly many, including governments, eitherdo not learn, or do so very late, lessons, de-spite the fact that there are case studies be-fore them. What happened to the auto indus-try in the country when Government controlswere relaxed in 1991 is an example of howprivate industry can prosper to the people’sbenefit, when the red tape is loosened a little.The Government invited foreign companies toenter the market. As a result, BMW, DaimlerChrysler, Fiat, Ford, General Motors, Honda,Hyundai, Renault, Suzuki, Toyota andVolkswagen are all successfully manufactur-ing here. Old, pre-reform auto plants, such asthose making the Ambassador and the Pre-mier Padmini, the latter with Fiat tie-up andknow-how, lost market share. At the sametime demand soared for cheaper, better In-dian-made cars. Auto industry employmentalso rose. Unfortunately, Kerala could not copythis national success because it could not at-tract a single automobile company, let alone

any other company, to start manufacturinghere though BMW officials had inspected oneor two sites in the State for locating its plant.Bureaucratic hurdles and lack of farsighted-ness of the political leadership failed the Stateagain. Today, Kerala’s neighbour Tamil Naduboasts nearly a dozen global auto majors hav-ing already set up shop or are in the processof doing so in the State. Reports say thatChennai and its neighbouring areas are gradu-ally becoming the Detroit of India.

There is also the story of Dell chief MichaelDell arriving in Mumbai a couple of years ago.The purpose of the visit was to explore thepossibility of starting in India a hardware unitof Dell, the number one personal computermanufacturer in the world. No sooner did heland in Mumbai, it was reported, than thecountry’s Home Minister, Mr P Chidambaram,went to him to personally receive him, andheld discussions with him for an hour. In amatter of just eight to ten months, Dell not onlylaunched its plant near Chennai but alsostarted production there! It must be remem-bered that Tamil Nadu is ruled by the DMK andMr Chidambaram belongs to the Congress,though both the parties are allies. One can’timagine a similar thing happening in Kerala.

In one sector in which the Government

never had a toehold—information technology(IT)—Kerala has shown some command. Buteven in this sector it is one of the worst per-formers in the country. Look at the country’sper capita IT exports. While Karnataka had Rs1,36,383 in IT exports per higher-educatedgraduate in 2005-06 and Maharashtra Rs28,887, Kerala had posted a mere Rs 1,422.Even Orissa had more per capita exports thanKerala!

At a session on ‘Kerala’s Industrial Invest-ment Potential’ held as part of the InternationalCongress on Kerala Studies, Mr ElamaramKareem admitted that the State’s image out-side left much to be desired. He said the im-pression that wealth creation is a crime shouldgo if we have to attract private investment.“Wealth creation is inevitable for progress andKerala will be able to retain its skilled talentpool only if it attracts private investment, par-ticularly in IT and biotechnology,” he said.

Despite many changes on the administra-tion front, Mr Kareem said, several unhealthytendencies prevailed in the State. He cited pro-cedural delays and the negative attitude ofbureaucrats as reasons for the State’s inabil-ity to attract ample private investment. “Ofcourse the State has gone in for legislation toestablish a single-window clearance system,but it can hardly be called a success. A studyof 17 ideal investment destinations conductedby the World Bank had ranked Kochi at the16th position,” he said.

As the Minister said, red tape has madeKerala one of the most difficult States for con-ducting business in all of India. The World Bankreport, to which Mr Kareem referred, foundthat it took a new business in Kochi more than210 days to obtain building permit approvalsand utility connections, whereas a businessin Hyderabad could do the same in about 80days.

Of course Kerala could initiate what couldbe referred to as the most successful socialwelfare programme in the developing world.The universal literacy rates and life expect-ancy levels are the successful outcome ofthis programme. Naturally the question arises:Why was Kerala not able to improve its eco-nomic growth naturally with its latent humancapacities? In fact the Kerala Model of socialdevelopment has only held back, rather thantaken it forward, that is, economically.

In Kerala, unlike in other States, Govern-ment policies have had a less positive impacton social development and a more negativeimpact on economic development than hasbeen commonly perceived. Many of the State’ssuccesses can be attributed to institutions likeChristian missionary schools, colleges andhospitals that predate the welfare State. Forexample, despite the wide availability of pub-lic healthcare services, Kerala has the fourthhighest level of private health expenditures inthe country: more than 86% of total per capitahealthcare spending in the State is conductedin private institutions.

Agreeing with this view, Dr Cyriac saysGovernment policies like the much-talked-aboutland reform/land ceiling measures did not re-sult in a great amount of redistribution of land.At the same time, in respect of paddy, theclass of people who had used innovativemethods to reclaim kayal lands and increasethe production and productivity got dispos-sessed of their holdings and quit the scene.The new owners lacked in resources, knowl-edge and enterprise, says Dr Cyriac. “AndGovernment help never reached them in suf-ficient measure and when needed.”

“I agree that the governments in Keraladid not contribute in any significant manner tothe improvement in living standards and qual-ity of life. Perhaps if they were not there withtheir ‘welfare’ measures, labour productivityand discipline levels would have been muchbetter. The atrocious systems of nokku kooliand attimari and the exploitative approach ofthe headload workers would never have de-veloped into the anti-enterprise bulwark whichserves to drive away investments fromKerala,” he says.

Agriculture which used to be the main-stay of the people of Kerala until a few yearsago is also on the decline with area under itfalling steeply and because of certain Gov-ernment policies, contributing to the decreasein the State’s GDP and overall growth. “Gov-ernment policies are to be squarely blamedfor this situation,” says Dr Cyriac. “The paddyfarmer should be liberated and given freedomto use whatever seed he wants, whatevermen or machine he wants, whatever hewants,” he says.

The massive migration from the State hashelped Kerala outpace even Gujarat in thematter of economic benefits accruing to itspeople over the last several years—drivencompletely by remittances, which made upmore than 20% of the State’s income in 2007.

What would happen to the State if the hugeremittances were to suddenly stop? “Therewill be no cash flow and there will be wide-spread distress everywhere in Kerala,” saysDr Cyriac.

Undoubtedly Kerala has enormous poten-tial. Some of its advantages over other States—in high technology, education, healthcare,social development—can be put to effectiveuse to improve the economic growth of thecountry as a whole. And Kerala’s economicgoals—improving infrastructure, boosting ser-vice exports, attracting investment in indus-tries and strengthening the State’s knowledgeeconomy—are also the goals of the country.So development of Kerala can definitely con-tribute to national development too.

That Kerala has failed to make use of itsvast, dormant potential, human capital, thegreatest developmental force, makes onewonder why the State has remained apatheticto making efforts that will take it forward.

On the eve of the Kerala Studies Congress,Dr Thomas Isaac said that with the averagegrowth rate of 10%, Kerala is ahead of otherStates in the country but it is witnessing theemergence of frightening new inequalities anddevelopmental challenges. “The time has comefor Kerala to sit up and take note of develop-mental challenges and the emerging inequali-ties at different levels. The rich are gettinghugely rich and the poor are being pusheddownward. There are all sorts of disparitiesgrowing, some of them inter-regional,” he said.

Mr M K Balan, Electricity Minister and him-self a Marxist, also lamented at the congressthat pressure from ‘within’ forced him to scrapthe Kerala State Electricity Board’s deal withKorean firm KDN for IT-related works underthe Restructured Accelerated Power Devel-opment and Reforms Programme for slashingtransmission losses.

A letter written to him by Chief Minister VS Achuthanandan was one of the reasonsfor calling off the scheme, Mr Balan said. “Allprocedures related to the deal had been com-pleted transparently when a media report ap-peared alleging irregularities,” he said.

The path to sustainable economic growthseems lost to Kerala. The people can onlyhope that healthy competition may eventuallyprevail.

Agriculture alsoon the decline

As gold is zooming, all fi-

nancial institutions includ-

ing NBFCs (non-banking

finance companies), banks

and even individuals have

started the gold loan lend-

ing business and it is

booming. Most of the lend-

ers provide 80% to 100% of

the market value of gold as

loans. The rate of interest

varies from 5% to 30% de-

pending on the period,

amount required and pu-

rity of the commodity.

By Antony Ooden

he end of the second decade of thiscentury may see the price of goldtouching Rs 2,000 a gram versus Rs

1,950 at the end of the final year of the lastdecade when it was $1,430.95 (31.1 g) inthe global market. With 10% labour chargeadded, an 8-gm gold ornament may then costaround Rs 18,000. Last year there was 28%growth in gold consumption. The supply ofthe yellow metal is falling. No new mineshave been discovered. The existing onesare getting exhausted and miners are dig-ging as deep as 5 km. Gold content in orehas come down from 12 gm a tonne to al-most 2 gm. And it costs more and more totake that out.

As gold is zooming, all financial institu-tions including NBFCs (non-banking financecompanies), banks and even individualshave started the gold loan lending businessand it is booming. Most of the lenders pro-vide 80% to 100% of the market value ofgold as loans. The rate of interest varies

from 5% to 30% depending on the period,amount required and purity of the commod-ity. Gold loans for agricultural purposes aregiven at 5% to 7.5%. For agricultural loansthe landed property of the customer andhis/her status are also considered.

Seven banks in India have now beenpermitted to import gold. They are four as-sociate banks of State Bank of India—StateBank of Hyderabad, State Bank of Bikaner,State Bank of Travancore and State Bank ofMysore—besides South Indian Bank, KarurVysya Bank and Punjab and Sindh Bank.With this the total number of banks allowedto import gold has gone up to 30. This willcreate new opportunities for customers andlead to healthy competition among banksresulting in protection of clients’ interests,say experts.

According to World Gold Council data,India imported about 624 tonnes of gold and1,260 tonnes of silver in 2010, an increaseof 25% over the figure for the previous year.Today, gold has become the first option ofthe people who are in need of urgent money.

Statistics on gold show that it will remain sofor more than a decade.

According to Mr V P Nandakumar, Chair-man of the Manappuram Group of Compa-nies, a front-runner in the gold loan busi-ness, gold loans will continue to grow fasterthan the other lending sectors, be it assetfinancing, housing finance, infrastructure,industrial lending etc in the current year andthe next few years. “In fact the organizedgold loan sector in India is expected to reg-ister growth rates of 30% to 40% over thenext five years,” he says.

The Muthoot Pappachan Group, anotherleader in the field, has two NBFCs under itsfold, extending gold loans—Muthoot FincorpLimited and Muthoot Capital Services Ltd.The first is mainly into the gold loan busi-ness and the second also offers other typesof loans including two-wheeler loans. Mr RManomohanan, Chief Executive Officer ofthe group, says: “A gold loan is basically apersonal loan. Gold loans will continue toretain the top position among personal loans

To page 9

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T

GOLD LOAN

'Personal loans carrymuch higher interest'

From page 8

in the near future, at least for the next 10 to20 years. The main advantage of a gold loanis the ease with which it can betaken compared to other types ofpersonal loans. The ease emanatesfrom the security which is gold, com-pared to other types of assets assecurity for other personal loans’’.

A lot of NBFCs and banks offerpersonal loans. They do not attractso much attention as gold loans. Themain drawback may be the security,period and the interest rate of the personalloan. Personal loans are often prone to de-fault and the method of recovery is oftenfound to be horrible.

Mr Nandakumar puts it thus: “Gold loans,like personal loans, are often used for short-term household requirements. However, interms of the cost and ease in getting the loanand in terms of the convenience in repay-ment, gold loans are a better bargain. Per-sonal loans are unsecured loans and there-fore carry a much higher rate of interest.Moreover, they require considerable effortin documentation formalities and you arecommitted to an inflexible EMI schedule. Goldloans, on the other hand, are cheaper andcan be got in minutes. You can also stretchthe repayment to your convenience: the onlyrequirement is that you have to service theinterest periodically.’’

About interest rates, Mr Nandakumarsays, “Our base rate is 12%. However, de-pending upon how high the loan-to-value(LTV) is, an additional risk weight premiumranging from 3%-12% is charged over andabove the base rate. The interest and riskpremium is applicable only for the days themoney was actually utilised. There are noprepayment penalties. Our gold loan prod-ucts have a tenor of one year. And depend-ing upon how high the LTV is, customers arerequired to service the interest at specifiedperiodicities. For example, in schemes wherethe LTV is the maximum, interest will have tobe serviced monthly, whereas in schemeswith a lower LTV, it may be serviced at quar-terly, or even half-yearly, intervals.’’

On this, Mr Manomohanan airs his viewsthus: “A gold loan is a better option comparedto other personal loans since the proceduresare very simple and the time taken for pro-cessing is very short. Normally the rate ofinterest varies from 12% to 20% per annumdepending upon the schemes, repaymentschedule etc. Similarly the period may varyfrom one month to 12 months in the normalcourse. There are also innovative schemeswhich permit repayment periods up to 36months’’.

Not only individuals but corporates toochoose gold loans as a better option for largeamounts.

Lots of advertisements are appearing inthe print and visual media eulogizing goldloans with highly paid actors, cricket playersand icons from different walks of life en-dorsing them. The common people wonderhow the companies manage to survive after

paying huge remunerations as promotioncharges. “You have to look upon the issue interms of costs versus benefits. The relevantconsideration is whether the increase in busi-

ness justifies the expenditure. Webelieve that the extra volumes gen-erated make it cost-effective. In-deed, our experience has been thatour net non-interest operating ex-penses ratio has fallen in the pastone year because the increasedcosts are being spread over amuch larger business level’’, says

Mr Nandakumar.

Says Mr Manomohanan: “The companiesgiving publicity for their gold loan productsare big corporates having a large network ofbranches and huge volumes of business. Theaim of publicity is to popularize gold loan prod-ucts. Such advertisements help the people inneed by pointing out an easy way of lever-aging their gold ornaments for their immedi-ate cash flow. The volumes of business doneby the companies are very large and the ad-ditional volume generated by the advertise-ments is also substantial. Compared to theadditional volume generated by the adver-tisements, the expenses for such advertise-ments are so small that the impact of suchexpenses on the pricing of the product isminimal’’.

There is criticism that such advertise-ments convey a message to the public thatgold loans are the easiest way of gettingmoney for their needs. More-over because of the brandambassadors who havean iconic image peoplewill easily fall forthese loans withoutthinking of other

options. The result is that the loans eventu-ally become bad loans and people lose theirpawned gold. Will not this leave a blot onsociety? “The question would have had meritif the prevailing reality had indicated high de-fault rates in gold loans. In truth, default ratesin gold loans are among the lowest across allcategories of loans, indeed, default rates to-day are well below 1%,” says MrNandakumar.

In Mr Manomohanan’s opinion, gold loansare the easiest way of meeting immediatecash requirements. “The rate of interest ongold loans may be slightly high compared toloans by commercial banks. However theyare not higher than the rates of interest onother types of personal loans. There are nowmany big corporates engaged in the busi-ness of gold loans with a very large numberof branches. The competition among suchorganized players ensures that the rate of

interest charged is competitive, market-re-lated and advantageous to the customers.Also, a gold loan is an immediate source ofcash and can be easily repaid by the bor-rower by taking any other types ofloans at a lower rate of interest, ifany such loans are available,’’ hesays.

There are a couple of compa-nies and individuals who lend goldloans at 100% of the market valueeven though they don’t want to ad-vertise the rate of interest directlyas it depends on the purity, amount and theperiod of loan. And they do brisk business.There is also a limit to the amount given. Manycompanies fully concentrate on the gold loanbusiness alone. Some combine it with otherbusinesses.

Mr Nandakumar says: “Gold loans canbe had for amounts ranging from Rs 1,000 toRs 1crore and the LTV would vary depend-ing upon the scheme. As a rule we give any-where from 65% to 90% of the market valueof gold as loan. As for the quantum ofbusiness, at the end of last fiscal year,our gold loan assets under manage-ment (AUM) stood at about Rs 2,500crore. Today, we have reached thelevel of Rs 6,400 crore’’.

“There are no stipulated minimum or maxi-mum amounts for gold loans. We are givingloans as small as Rs 1,000 and under specialcircumstances loans in the range of up to Rs1 crore are also considered. The annual turn-over of the group is in the range of Rs 20,000crore,’’ says Mr Manomohanan.

The share of gold business in relation tothe total business of a company varies de-pending on the size and turnover.Manappuram is focused on gold loans, whichconstitute the bulk of its lendings—98%to 99%.

Gold loans constitute more than 95% ofthe total loans extended by the MuthootPappachan Group, according to MrManomohanan.

With gold spurting, naturally the prices ofother precious metals like silver, platinum,palladium, diamond and pearls also rise. Isthere any chance of these items replacing

gold in the future? “For many reasons, in-cluding cultural and historical, gold cannot beeasily substituted. Besides, gold is also heldas a store of value. In this sense, when the

price of gold goes up, it only rein-forces the popular perceptionsabout this metal being a very goodstore of value, and it further en-hances the investment value ofgold”, says Mr Nandakumar.

“For various reasons like easysaleability, estab-lished quality

standards, ease of ap-praisal etc, gold isaccepted as a se-curity for loans. Itmay be possiblethat other metalsor gems willalso be ac-cepted as

security for loans in future. However, theyare not likely to replace gold in volume orpopularity because of the above reasons andalso because of the quantity in supply”, saysMr Manomohanan.

Goldsmiths or people with experience areemployed by companies for appraising gold.Is the job of an appraiser a demanding one?Is there any scope for a training centre/insti-tute for such appraisers? Here is how MrNandakumar sees it: “Our experience is thatappraising gold is a fairly uncomplicated skillthat can be picked up with on-the-job train-ing. However, it would be nice if we couldemploy people already trained in the art. Yes,starting training institutes for gold appraisersis definitely a good idea.” Mr Manomohanansays: “Members of staff in the branches ac-quire expertise in appraising gold by experi-ence. The experienced staff are given train-ing and appointed as appraisers. There aresufficient in-house facilities for the trainingof gold appraisers”.

9


V P NandakumarR Manomohan

Investments that save tax

By K Aravind

nder section 80 (c) of the Income TaxAct, your investments up to Rs 1 lakh

are exempted from income tax. EmployeesProvident Fund (EPF), Public Provident Fund(PPF), National Savings Certificate, fixed de-posits with a term exceeding five years, lifeinsurance policies, unit-linked insurance plans(ULIP), equity-linked savings schemes (ELSS)and New Pension Scheme (NPS) are the in-struments by which you claim tax exemptionunder section 80 (c). Also, the interest youpay on home loans and children’s tuition feeare also exempted from tax, but these tooshould be within the upper limit of Rs 1 lakh.

Tax Slabs

Income Tax

Upto 1.6 lakh Nill

1.6-5.00 lakh 10%

5.00-8.00 lakh 20%

8.00-10.00 lakh 30%

Public Provident Fund (PPF): In all othertax-saving instruments, the upper investmentlimit is Rs 1 lakh, but in PPF, you can only in-vest up to Rs 70,000 a year for tax exemption.PPF, in which you have to invest for 15 years,offers an annual interest rate of 8%. The re-turns you get on maturity are not taxable.

You can take a loan up to 25% of the in-vested amount in the third year. At the end ofsix years, you have the option of withdraw-ing up to 50% of the money in your PPF ac-count. Income from PPF is totally exemptedfrom income tax.

Bank FDs with a term of five years: AfterPPF, the most preferred tax-saving investmentamong taxpayers is bank fixed deposits thathave a term of five years and more. Wheninterest rates are soaring to new highs, bankdeposits have become attractive. Banks cur-rently offer 8%-8.50% on FDs with five-yearmaturity terms.

Bank FDs have a drawback when com-pared with PPF: on maturity, you have to paytax on the interest. However, to avoid tax de-duction at source (TDS), the depositor cangive an affidavit in form 15G or form 15H.

5-Year FD Interest Rates ofProminent Banks

SBI 8.50

ICICI Bank 8.50

HDFC Bank 8.25

SIB 8.25

Bank of Baroda 8.25

Canara Bank 8.00

National Savings Certificate (NSC):

National Savings Certificate, which comesunder post office savings schemes, is a six-year deposit scheme. Interest is taxable, buttax for the interest amount will not be deductedfrom the source. The interest (annual interestfrom NSC is 8%) from NSC will be reinvested.This type of deposits can be transferred fromone post office to another.

Life insurance policies: Life insurancepolicies are the next popular category of in-vestments that most of the taxpayers dependon to save tax. Returns from life insuranceschemes are not taxable. The facility to take

loans is another added advantage. Comparedwith other investment schemes, insurance poli-cies have a longer term.

Unit-linked insurance plans (ULIPs):These schemes barely help you to surviveinflation and do not offer high returns. How-ever, investors who can take some risk canaim for higher returns in the longer term byinvesting in insurance schemes and mutualfunds that invest in the stock market.

ULIPs offer a good combination of insur-ance protection and higher returns. They aredesigned to create wealth in the long term,offer tax breaks and cover life. The recentdecision to cut allocation charges of ULIPshas made such schemes more attractive. ULIPreturns are not taxable. The lock-in period isthree years.

Equity-linked savings schemes (ELSSs):MFs that offer tax savings are called ELSSs.The lock-in period for these schemes is thesame as for ULIPs—three years. Returns fromELSSs are not taxable. If ULIPs benefit long-term investors more, ELSSs suit those inves-tors who want to withdraw their capital andreturns in three to five years.

Five Best ELSSs

Scheme NAV 3 yearReturn

Canara RobecoEquity Tax Saver 22.17 6.51%

FidelityTax Advantage 23.67 5.47%

HDFC Taxsaver 243.33 5.35%

ICICI PrudentialTax Plan 148.67 3.66

Sahara Tax Gain 39.49 3.08

New Pension Scheme (NPS):

The New Pension Scheme (NPS) of theUnion Government for employees in the unor-ganized sector was launched on May 1, 2009.Funds in Scheme E of the NPS, which investup to 50% in equities, have given averagereturns of 30.26% (per NAV on January 112011). Compared with similar schemes suchas the Public Provident Fund (PPF), whichgives an annual return of 8.5%, NPS has givena return that is very high.

NPS has six funds under its umbrella—SBI Pension Fund, UTI Retirement SolutionsPension Fund, IDFC Pension Fund, KotakMahindra Pension Fund, Reliance Capital Pen-sion Fund and ICICI Prudential Pension Fund.These funds invest under Scheme E, SchemeC and Scheme G. Scheme E invests primarilyin equities. Scheme C invests in liquid funds,bank deposits and corporate bonds. SchemeC focuses more on Government securities.Scheme E has a maximum cap of 50% in caseof equity investment.

UTI Retirement Solutions Fund has givenmaximum returns in Scheme E in the last oneyear—36.20%. SBI Pension Fund ranked thelowest—15.80%. NPS has started looking at-tractive after posting impressive results ofsecuring over 40% average returns within justone and a half years of its existence. As theDirect Tax Code (DTC) comes into effect onApril 1, 2012, NPS will be the only tax-ex-empted investment scheme under Section 80(c)of the Income Tax Act. This is a clear distin-guishing factor for NPS. Remember that yourinvestments in ULIPs and ELSSs will not beeligible for tax exemption from April 1, 2012onwards. According to DTC, apart from NPS,only provident fund and insurance policies canclaim tax exemption at the time of redemption.If stock markets continue to rally, the only eq-uity-linked instrument that will fetch you taxexemption will be NPS. This will enhance theprospects of NPS as an attractive investmentoption for all kinds of investors. Howeverhigher charges remain a drawback of thescheme.

Compared with other schemes NPS con-tinues to be an expensive investment option.The lowest investment in NPS is Rs 6,000. Ifyou do not invest Rs 6,000 yearly, you have topay a fine of Rs 100. The lowest instalment isRs 500. The investment should continue for aminimum period of four years. Each transac-tion has a charge of Rs 30. Apart from thesecharges, there is a record-keeping fee of Rs350 every year. This means anyone who in-vests Rs 6,000 in NPS has to shell out Rs 470under different heads of charges. In otherwords, even if you invest the minimum amountin this scheme, the charges you pay are 7.8%of your investment. This is too expensive andunsustainable. Record-keeping charges are

expected to reduce as the number of inves-tors in the scheme increases.

Which one to select?: Choosing the rightinvestment scheme for tax savings has to bedone keeping in mind your risk appetite, in-vestment term and the frequency of invest-ments. These factors should guide you onwhether to stick to traditional investment in-struments or think beyond them and go forequity-linked instruments.

Presently, the available equity-linked invest-ment schemes are ULIPs, ELSSs and NPS.Among these only ELSSs offer the flexibilityto go for one-time investment or multipleinstalments through a systematic investmentplan (SIP). Some ULIPs also allow single-pre-mium options.

Equity-linked savings schemes have givenan average return of 17.17% in the last oneyear. However, if you take into considerationtheir long-term performance in the last threeyears, they seem to be too weak. Theseschemes had registered an average loss of0.34% during this period. This can be blamedon the stock market crash of 2008.

Children’s education and home loan re-payments: In an age where educational ex-penses have increased beyond affordable lim-its, one would be relieved to hear that theycan give you some tax relief. Those with kidsshould look at how much they are spendingfor the education of their children before go-ing for tax-saving investments. A proper cal-culation of how much you can save in incometax by claiming exemption for educational ex-penses will give you much more relief andflexibility.

Income Tax Act section 80 C exemptschildren’s tuition fee up to Rs 1 lakh from in-come tax. You can avail yourself of this for amaximum of two children. If both husband andwife are employed and they have two chil-dren, both of them can claim exemption for theeducation expenses of one child each.

Likewise, the portion of your EMI that cov-ers the principal of your home loan is alsoexempted from tax. The maximum amount youcan claim in a year is Rs 1 lakh.

(The author is the Editor of Hedge Ohari,the investment magazine from the leadingstock broking company, Hedge Equities)

U

TAX-SAVING10


By P D Johnny([email protected])

The Union

Government’s

initiative, though

belated, should bring

the situation in the

affected areas under

control, win back the

confidence of the

deprived population,

restore faith in the

administrative

machinery and make

them become part of

the mainstream.

However, this would

depend on the quality

of implementation

of the plan.

The immediate need

is restoration of

peace.

he recent Union Governmentannouncement of an allocationof Rs 1,500 crore for develop-

ment schemes in 60 tribal and back-ward regions, mostly affected byNaxal violence in seven States incentral India, is a welcome step. TheCabinet Committee for Economic Af-fairs has approved the implementa-tion of an Integrated Action Plan (IAP),included in the Union Budget thisyear, with 100% grant assistancefor the current year (2010-11), aim-ing at quick resolution of basic prob-lems like health, drinking water, en-ergy and roads in these areas. For2011-12, Rs 1,800 crore will be ear-marked. Each district will receiveRs 25 crore this year and Rs 30crore next year.

The move signals a distinct de-parture from the earlier stand of theUnion and some State Governmentsthat the turbulent situation in theseareas poses a serious law and or-der problem which should be tack-led by use of force alone. Bloodyclashes in these States—mainlyChhattisgarh, Jharkhand, West Ben-gal, Orissa and Maharashtra—be-tween Maoists and the police/para-military forces have taken a heavytoll of human lives, including thoseof innocent civilians. The Maoists,though small in number, are highlycommitted to their cause and deeplymotivated. Being familiar with theterrain and forests, they have a clearedge over the Government forces.Around 60,000 CRPF ranks, in addi-tion to local police forces in the re-spective States, are officially statedto be engaged in combating therebels who are also well trained inguerilla warfare and are membersof an outfit called People’s Libera-tion Guerilla Army (PLGA) in whichthe presence of women is alsostated to be significant. They appearto be enjoying the confidence andsupport of the native population asthey have proved their commitmentto the cause of the tribals by inter-vening in cases of harassment byState forces and forest officials andthose of exploitation by local busi-nessmen.

In West Bengal, the re-entry ofthe movement coincided with theresistance and protests against forc-ible acquisition of large areas of landand evacuation of small and mar-ginal farmers for setting up indus-tries in Singur and Nandigram. Tur-bulence in Lalgarh of West Midnapur

district follows ‘excessive policeaction’ against tribal protesters.

It is common knowledge thatNaxalism which surfaced in the1960s is the fallout of underdevel-opment and exploitation of the poor.The movement took birth in andaround Naxalbari in northern WestBengal to spearhead the agrarianagitation seeking justice for the poorfarmers from the wealthy, exploitinglandlords. It soon spread to otherStates like Andhra Pradesh and Biharwhere also the poor were beingexploited by rich landlords andwhere land reforms still remain a dis-tant dream. Although the movementalso attracted the motivated youth inKerala during the same period, it soonlost sheen after the implementationof land reforms in the State in the1970s. The problem continues to bemore acute in States where land re-forms have not been implemented,denying empowerment to the poorsections of people. Disturbances inthe North East also can be attributedto underdevelopment and growingunemployment.

In West Bengal, Bihar andAndhra Pradesh, the movement at-tracted support from intellectuals andstudents also. In Bihar, the militantrevolts were directed againstBhumihars (wealthy landlords). In

A n d h r aPradesh, it wasorganized underthe banner of thePeople’s War Group(PWG). Many politiciansand policemen were killedthrough landmine attacks, andthe mode was guerilla war-fare, the leaders and the rankstaking shelter in thick forests andcoming out in the open to mountplanned attacks. It even appearedthat the State administration wasreduced to mute witnesses to thebloodshed. Fake encounters in-volving the rebels and avenging kill-ings of the police officers and politi-cians, including even ministers, hadbecome common. Many senior civilservants were abducted to get thearrested Naxalite leaders released.Initially the police just could not copewith the guerilla warfare and lostout both in strategy and operations.

Around this time, many splinter Naxalgroups, though sharing the sameideology but separated in terms ofstrategy, decided to work togetherunder the banner of the CommunistParty of India (Maoist) in 2004. TheState Government, awakened fromthe initial shock, launched counter-attacks with modern weapons andvehicles, making use of the fundsliberally provided by the Union Gov-ernment. Specialized police cadreswere formed and trained in guerillawarfare. Simultaneously, the wel-fare measures and infrastructure de-velopment initiated by the then ChiefMinister Y S Rajasekhara Reddy alsostarted bearing fruit and the Naxaliteinfluence in the State slowly startedwaning. In Bihar too, similar effortsby Chief Minister Nitish Kumar suc-ceeded to some extent and there toothe movement became weaker. Thestrategy adopted by both these StateGovernments was almost similar—recognizing the problem as not just

a law and order issue but as a socio-economic one. The potential ranksof the movement were graduallyweaned away from the violent pathby providing them with means of live-lihood and protection from exploita-tion by landlords. The effective imple-mentation of the Mahatma GandhiRural Employment GuaranteeScheme since 2005, with Centraland State Governments’ participa-tion, also played a positive role inthis regard.

In Bihar, clashes between theBhumihars’ private armies and theNaxalites were becoming frequent.But the Government took more strin-gent and effective steps to checkthe illegal activities of the privatearmies. This paid off and bloodybattles became rare. The situationstarted returning to normal.

With these developments in thetwo States where they were strong,

To page 16

T

11ISSUES


OUTLOOK

A better Kerala,a better India anda better world

I am confident the

coming decades will

indeed be turning-

point decades for In-

dia. India is being lis-

tened to with greater

respect by the na-

tions of the world. I

believe that the

trend will continue

and provide more

Keralites with an op-

portunity to become

the formal and non-

formal spokesper-

sons of the new

world and new India

and the new phi-

losophy of corpo-

rate sharing.

By K P Joseph

s India enters the second decade of the 21st

century (and the third millennium) a glance atthe India of tomorrow will be an interesting ex-

ercise.

In his recent address to India’s Parliament, USPresident Barack Obama had acknowledged Indiaas a global power. He said, not emerging, but analready emerged global power.

Let me recall here that during a visit to the USmore than 20 years ago I had many a time tastedthe condescension with which Americans talked tome about India and Indians. No longer is this thecase.

I must confess here that I did not agree withPresident Obama fully. But it dawned on me that hewas referring to the 330-million-strong Indian middleclass whose social, economic and cultural ‘wealth’is in no way inferior to that of the US wealth. He hadclosed his eyes on the other India that is Bharat,caught up still in its feudal heritage.

The population of the US is around 300 millionplus and the Indian middle class is more in number.No wonder India can contribute in no mean measureto a better global economy in the coming years.

Kerala and India: Let me here mention Keralain India’s development scenario. Kerala is, in com-parison with bigger buddy States, a small State andholding only 3-plus percent of the country’s popu-lation. However it holds 14-plus percent of India’smiddle class and working class with middle-classaspirations. This means 14% of the 330 million middle-class Indians are Malayalees.

There may not be Tata-Ambani-Birla-level indus-trial houses owned by Keralites but their contribu-tion to development of India and Kerala will be pro-nounced in the coming years: around four timestheir population base.

The 14% formula is reflected in the list of inclu-sion of 14 Malayalees out of the 106 Pravasiawardees so far—2003-2010: Aniruddhan Dr 2007,Azad Moopen 2010, Billy Nair 2007, Joy Cherian Dr2008, Manoj Night Shyamalan 2004, A P S Mani2008, P Mohammed Ali 2004, P N C Menon 2009, CK Menon 2006, Ravi Pillai 2008, Shashi Tharoor2004, Soman Baby 2008, Thomas Abraham 2008,Yussaf Ali M A 2006.

May I use this occasion to request the Gov-ernment of Kerala to initiate a Forum of MalayaleePravasi Award Winners and take their advice totake Kerala further fast forward.

The new world and the new India: The otherday I spoke to the first Muslim youngster to marry agirl in our family circle. My thoughts flew to myfavourite philosopher, Sree Narayana Guru. Did henot say that all humans belong to one caste, onereligion and one Godhead and It is not the religion ofa man or woman that matters but his or her humanbehaviour? Sree Narayana- model inter-marriagesbeyond racial, linguistic and colour and country bar-riers are on the increase today.

I am with Malayalam writer Basheer that eachhuman being (every citizen) belongs to one unitive

whole of mankind. And this oneness feeling appliesto communities/countries in all living processes. Inother words, all development has a value-drivendimension.

Hence corporations and corporate bodies—toolsof development—have to realize that they cannotsustain themselves if they are just money-makingmachines. They have not only to make money butshare part of it with the less fortunate in the commu-nity.

This is the gospel truth of the 21st century. It isspreading wide today. The need for sharing whatyou have with your neighbour has been the univer-sal gospel message from ancient times. The richnations have to share what they have—jobs, food,knowledge—with poorer nations. Indian IT peopleshould not have visa barriers to seek placementsin the US, Europe and Australia. In fact a visa-lessglobalization is the need of the hour.

This must be the outcome of the search for abetter world in our era. And

Corporate Social Responsibility (CSR) will be acrucial component of this new global philosophy.

My friend Joy Cherian, a Kochiite, aboutwhom I have written in journals as the US IndianAmerican and the first Asian who served the US

Government at a Cabinet-level post, is a believer inthis philosophy. He is a Pravasi awardee and hasdedicated his retirement years to promote the newglobal social philosophy. He runs the AACR (Asso-ciation of Americans for Civic Responsibility) and Iam sure it has provided inspiration to the making ofa better America and eventually to the making of abetter world.

More such initiatives are required to translatethe new philosophy into reality.

In India itself Narayana Murthy of Infosys, Premjiof Wipro and Shiv Nadar of HCL Technologies areleading the way to provide this type of social con-science to industry leaders.

Turning point for India: I am confident thecoming decades will indeed be turning-point de-cades for India.

India is being listened to with greater respectby the nations of the world. I believe that the trendwill continue and provide more Keralites with anopportunity to become the formal and non-formalspokespersons of the new world and new Indiaand the new philosophy of corporate sharing.

(The author is a former Consultant to the UnitedNations and an eminent writer. He can be con-tacted at: [email protected].)

A


12

TELECOM SECTOR

By K Vijayachandran

The C&AG reporthas exposed the to-tal lack of transpar-ency and poor effi-ciency of spectrumm a n a g e m e n t ,which continues tobe shamelesslyprimitive in the glo-bal context and to-tally unsuited for atelecom market ofcontinental propor-tions.

Raja, Telecom Minister in theManmohan Singh Government,was forced to resign, and is

now facing corruption charges by theCBI. He is the second victim of themassive telecom reforms initiated bythe Narasimha Rao Government in theearly 1990s as part of the economicreforms and structural adjustmentprogramme.

The first victim was Sukh Ram ofthat Government, who was arrestedby the CBI in 1996 and, after long tri-als, sentenced to three years’ rigor-ous imprisonment in 2009. He wasalso fined Rs 3 lakh and his dispro-portionate assets worth Rs 4.25 crorewere confiscated. Of course, neitherthe CBI nor the courts had cared toassess the damage caused to the na-tional economy or to estimate thelosses to the public exchequer be-cause of policy changes and the sub-sequent corrupt implementation.

But the Sukh Ram scandal of1996 was a pygmy in financial termscompared to the present Raja scan-dal. The Comptroller and Auditor Gen-eral (C&AG) has estimated a revenueloss of Rs 1,25,000 crore in the Spec-trum deals of 2008 (Report No 19 of2010-11): Ref. www.cag.gov.in). TheSukh Ram scandal was the directoffshoot of the New Telecom Policyof 1994 (NTP1994) which was soonreplaced by NTP 1999, taking intoaccount the big possibilities that hadopened up for line expansion be-cause of the revolutionary changesin wireless telephony by way of mo-bile or cell phones.

This was a big opportunity for theprivate sector which tried to monopo-lize the new space being created bythe new technology. In the early daysof these NTP regimes, public-sector

undertakings were virtually blockedfrom taking up expansion/diversifica-tion programmes and were even pre-vented from entering new technol-ogy areas like the Internet and mobilephone business. These policy initia-tives were virtually directed at the de-stabilization of the telecom infrastruc-ture created in the country after In-dependence.

India had adopted a two-leggedpolicy for telecom development un-der the discipline of the national Five-year Plans. Similar to India Post, tele-communication services in the coun-try were built up based on federalprinciples. There were nearly twodozen telecom circles under the De-partment of Telephones (DOT), virtu-ally one circle for every major State.Later the metro cities were broughtunder the MTNL set-up, and BSNLwas established to take care of allthe circles minus the metro regions.Then there were the technology de-velopment, project engineering, train-ing and planning divisions organizedon a zonal basis in support of thisfield set-up, functioning on a federalbasis and enjoying substantial re-gional autonomy.

Side by side with this line expan-sion, a fairly comprehensive manu-facturing industry was developed insupport of the national telecommuni-cation network as part of the two-legged policy. Indian Telephone Indus-try (ITI) manufactured not only tele-phone instruments but also telephoneexchanges. Much later, the C-DOT ini-tiative was organized under Mr SamPitroda, which helped in developingelectronic exchanges for urban andrural applications of various stan-dardized capacities, making the bestuse of an oncoming ICT revolution.

Several industrial units were set upin the public and private sectors forlarge-scale manufacture of electronicexchanges. Industries for telephonecables and other accessories, pro-moted by DOT, had already come upall over the country by then in publicand private sectors. With the suc-cess of the C-DOT technology, Indiahad acquired the capability of build-ing one telephone exchange per day,using indigenous technology, equip-ment and skills. Waiting time for tele-phones had dramatically come downwhen NTP1999 was installed as asuccessor to NTP1994 with its im-plied stress on private-sector partici-pation and FDI.

NTP1999 had declared its princi-pal objectives to be:

* Strive to provide a balance betweenthe provision of universal serviceto all uncovered areas, includingthe rural areas;

* Encourage development of telecom-munication facilities in remote, hillyand tribal areas of the country;

* Convergence of IT, media, telecomand consumer electronics andthereby to propel India into be-coming an IT superpower;

* Convert PCOs into public teleinfocentres having multimedia capa-bility like ISDN services, remotedatabase access, Governmentand community information sys-tems etc;

* Strengthen research and develop-ment efforts and provide an im-petus to build world-class manu-facturing capabilities;

* Achieve efficiency and transpar-ency in spectrum management;

* Protect defence and security inter-ests of the country;

* Enable Indian telecom companies tobecome truly global players.

A box item, illustrating the statusof the telecom network in the countryas given in the DOT Annual report of2009-10 is reproduced elsewhere.There was a big jump in cellularphones, and this was mostly the con-tribution of the private sector. Therapid expansion of the mobile phonesector and easy availability of con-nection as well as the fall in long-distance charges recorded were pri-marily because of the more recenttechnology changes at the global leveland not because of any initiatives orinnovations by policymakers or busi-nessmen in the country.

Any detailed review of thefulfilment of the policy objectives ofNTP1999 is beyond the scope of thisarticle. However, it may be noted thatrural and other remote areas continueto be neglected: even the extremelylow rural penetration of 4% was thecontribution of BSNL. With regard tothe Internet and broadband, BSNLhas emerged as the topper, despitethe handing over of VSNL to Tata fora song. The C&AG report has ex-posed the total lack of transparencyand poor efficiency of spectrum man-agement, which continues to beshamelessly primitive in the globalcontext and totally unsuited for atelecom market of continental propor-tions.

Mobile phone spectrum and li-cences were cornered initially by bigIndian companies like Reliance andTata, and then the numerous smallplayers riding on a liberalized FDI re-gime. The big players, like Reliance,had initially chosen the CDMA tech-nology and were trading in imported

To page 14

A


13


14

DOT a totally confused body Present Status ofTelecom Sector(DOT Annual Report 2009-10)

Indian Telecom market is one of the

fastest growing markets in the world.

With its 562.21 million Telephone con

nection as on December 31, 2009, it is

the second largest network in the world

after China.

It is second largest wireless network

in the world.

About 15 million connections are being

added every month.

The target of 500 million telephones by

2010 has been achieved in September

2009 itself.

From page 13

mobile phones for profit, possibly even col-lecting commissions from foreign companieslike LG and Motorola. Reliance had priced itsCDMA set at well over Rs 20,000, and sellingthem to customers packaged with term loans,arranged through sister institutions. Thanksto the big profit margins in mobile telephony,even small inefficient firms based on GSM tech-nology thrived in the market, with all sorts ofdubious schemes meant for confusing the cli-ents. The market for mobile tele-phony in the country maturedand stabilized only withthe entry of BSNL in themarket a few yearslater with its CELLONEbrand based on GSMtechnology. Till then,the small as well as thebig players in the privatesector were mostly en-gaged in making the proverbialquick bugs or in fishing in troubledwaters.

NTP1999, despite its declared objective,has not helped to develop a world-class manu-facturing industry in support of the mobilephone revolution in the country. Not even thebig players, like Reliance, Tata and Birla, hadcared to invest in R&D and human resourcesneeded for developing a world-class indus-try, promised in NTP1999. Even the promise ofmeeting the defence communication needswas neglected by DOT. Based on the experi-ence of C-DOT, one may say that a Nokia-typeinitiative was within the reach of Indian com-panies and the Indian Government for devel-oping mobile phone technology. In the mean-while, China has turned out to be a major sup-plier of communication equipment to the coun-

try, including mobile phony, and now Tata iscollaborating with Israeli institutions to checkand certify on spy-ware in their supplies! Andnow there is a proposal from Huawei of Chinato invest $2 billion during the next five yearsfor establishing a new R&Dcampus in Bangalore, andequipment manufactur-ing facility in Chennai,engaging some

5,000 people.The Chinese com-pany has currently6,000 employeesworking in India.

Under the impactof NTP1999, mostmanufacturing indus-tries promoted underthe earlier policy re-gime in the publicand private sec-tors lost the pa-

tronage extended to them by the Government.They were simply asked to mend for them-selves. A sophisticated industry like the pub-lic-sector Hindustan Teleprinters Ltd report-edly diversified into tourism. Many of them haveturned to export markets for survival: not onlycable makers but also others like C-DOT, Tele-communications Consultants India Ltd (TCIL)and ITI find their products and services moreand more acceptable in foreign markets. Ex-

ports by these Indiancompanies had

reportedly

crossedthe Rs 130-

billion mark in 2009-10, which was about

23% of their total, accordingto the latest annual report of DOT.

The administrative reports of DOT forthe last decade are indicative of the seri-ous strains experienced by that organiza-tion, thanks to the mindless reforms forced

on it and the organizations under its charge.Administrative autonomy enjoyed by State-level circles has been considerably erodedand DOT has lost even the minimal federalfeatures that existed under the earlier regime.Administration of the new projects and stat-utes like Universal Access Service, UniversalLicensing etc are highly centralized with DOT

in Delhi without any regional or State-levelcounterparts. The telecom organization in thecountry has lost its integrity and sense of pur-pose and direction with the introduction of theTelecom Commission and TRAI (Telecom Regu-latory Authority of India). DOT is a totally con-fused organization today and virtually inca-pable of seeking and serving national goals.

The C&AG has pointed out several ex-amples of failures by DOT at the policy andprocedural levels. News reports indicate thateven the policy objective of protecting thedefence and security interests of the countryremains unfulfilled. And the policy perspec-tive to “propel India into becoming an IT super-power, through the convergence of IT, media,telecom and consumer electronics”, soundsaltogether hollow, especially after the Spec-trum scandal. These are the messages fromthe C&AG report: Parliament should have are-look at the ongoing telecom reforms, andsubject NTP1999 and its after-effects to aserious review.

CSL on the path of CSR

Kochi Mayor Tony Chammany inaugurating the Waste Disposal and Palliative Care Facilitiessponsored by Cochin Shipyard Ltd (CSL) in the presence of Mr Dominic Presentation, MLA,Dr Beena, Ernakulam District Collector, and Cdre K Subramaniam.

The Waste Disposal and Palliative CareFacilities at the General Hospital, Kochi, spon-sored by Cochin Shipyard Limited (CSL) wasdedicated to the people by Mayor TonyChammany the other day. Mr Dominic Pre-sentation, MLA, Dr Beena, Ernakulam Dis-trict Collector, Cmde K Subramaniam, CSLOfficiating Chairman and Managing Director,Mr V Radhakrishnan, CSL Director (Techni-cal), senior doctors and staff of the hospitalwere present during the occasion.

Based on the biodegrading technology,the waste disposal facility, it was revealed,would go a long way in solving the waste

disposal problems of the hospital and en-sure qualitative improvement in care andhygiene. The palliative care unit would en-sure care and support for the terminally illpatient.

As part of its corporate social responsi-bility (CSR), CSL has sponsored schemes toprovide succour and help to the community.This is in the line with the Government direc-tives on the subject. According to the policy,the company aims to contribute towardscauses relating to community development,green technology, capacity building and art,culture and sports.

Cdre Subramaniamtakes over asCMD of CSL

Commodore KartikSubramaniam has as-sumed office as Chairmanand Managing Director ofCochin Shipyard Limited(CSL). He was Director(Operations) at the ship-yard and had been offici-ating as Chairman andManaging Director sinceMay 2010.

A marine engineer bytraining, Cdre Subra-maniam served the IndianNavy for three decadesbefore joining the CSL.Holder of a master’s de-gree in defence studies, hebrings with him vast ex-perience in setting up de-fence infrastructureprojects.

Fed Bank revises rateson NRE term deposits

Federal Bank has revised the interest rates on NRE termdeposits and FCNR deposits from January 1. The revised rateson NRE term deposits for one year to less than two years, twoyears to less than three years and three years and above are2.53%, 2.60% and 3.09%, respectively.

For FCNR deposits in US dollar, the revised rates are: oneyear to less than two years: 1.78 %; two years to less thanthree years: 1.85%; three years to less than four years: 2.34%;four years to less than five years: 2.79%; five years only:3.22%


15

By Bobby JohnPulickaparambil

The courts have time and again depre-

cated the practice of detaining goods

and vehicles at checkposts stating mi-

nor technical defects. An opportunity

should be given to the dealer to rectify

inadvertent mistakes in the documents

and minor clerical errors. Sometimes,

there may be bona fide omissions to

carry all the required documents along

with the goods. The transaction may

be genuine and there will be no scope

for tax evasion. In such circumstances,

it is unjustifiable to detain the goods

and vehicles solely for the absence of

one particular document. It is only just

and proper to give reasonable time to

the dealer for the production of addi-

tional supporting documents.

nyone who has experienced the struggle to transportgoods through a border tax ‘checkpost’ (checkpoint) willagree that the word is a synonym for corruption. It can-

not be denied that checkposts have brought disrepute to thetax departments. Though the Government has initiated varioussteps to make our border checkposts corruption-free, com-plaints of harassment and corruption are plenty. The mediahas exposed the fallacy of the claim that the Walayar checkpostis corruption-free. Is a corruption-free checkpost possible?Well, one cannot be blamed for doubting the feasibility andpossibility of establishing a corruption-free tax checkpost.

Section 46 of the Kerala Value Added Tax Act (KVATA)2003 provides for establishment of checkposts in places wherethe Government considers they are necessary in order toprevent tax evasion. Thus, it is clear that checkposts are in-tended to prevent tax evasion. They cannot be a tool forharassing genuine dealers and a hindrance to inter-State tradeand commerce. Article 301 of our Constitution mandates freeflow of goods and services throughout the territory of India.Therefore, only reasonable restrictions can be made on inter-State movement of goods.

It is important to know the extent of power of a checkpostauthority. More often than not, the officers at checkposts as-sume that they are the authorities empowered to determine theentire tax liability of the dealer. A checkpost authority in fact isnot expected to make an assessment. His job is only to verifywhether the goods are accompanied by proper documents asprescribed in law and to prevent a possible tax evasion. Sec-tion 47(2) of the KVATA confers power on the checkpostauthority to detain the goods if he has reason to suspect thatthe goods are not covered by proper and genuine documentsor any person is attempting to evade tax. Hence any detentionis unjustified and unauthorized unless there is inadequacy ofdocuments or an attempt to evade tax. Checkposts are in-tended to prevent tax evasion, not to raise revenue. It is notanother revenue recovery mechanism. There are instances ofcheckpost authorities demanding that dealers clear tax ar-rears for the release of goods and vehicles.

The question of demurrage is another problem. Often deal-ers are faced with hefty demurrage because of unnecessarydetention of goods and vehicles at checkposts. Once the goodsare intercepted at a checkpost and a notice demanding secu-rity deposit is issued the options before the dealer are either topay the amount demanded in the notice or to approach the HighCourt filing a writ petition for the release of goods and ve-hicles. In the second option, by the time he gets a favourableorder from the court, demurrage may have arisen. Thus, for allpractical purposes, the dealer is prone to surrender to thebargaining power of corrupt officers. In this context, it is per-tinent to examine the delay in the case of customs clearance.In the customs law, there is an option to transfer the goods toa bonded warehouse. The apex court has held that if thegoods are unnecessarily detained for no fault of the asses-see, the Customs Department will be liable to compensate forthe consequential demurrage. (Union of India v Sanjeev WoollenMills, 1998 (100) ELT 323 SC and also Donald & Macarthy (P)Ltd v Union of India, 1997 (89) ELT53 (Cal). Such measuresshould be applied to value added tax also.

The detention of goods alleging undervaluation is anotherserious issue. It is settled law that an allegation of undervalu-ation must be supported by some material. However, it is notuncommon that genuine dealers are harassed by detention ofgoods by simply alleging undervaluation. To page 16

A

CHECKPOST

Kerala Finance Minister Thomas Issac visiting the Walayar checkpost


16

Implementation is importantFrom page 11

the Maoists started diverting their attention to otherStates. The movement thus spread to tribal pockets ofJharkhand, Chhattisgarh, Orissa and Maharashtrawhere the poor were exploited by Government offi-cials, police and the local affluent people. The crores ofrupees spent on uplifting the poor, including tribals, werenot reaching the intended beneficiaries but being pock-eted by officials and contractors. All the trumpeted eco-nomic growth and prosperity in the country were onlymirages for the poor and not making any appreciablechange in their lives. In fact, their living conditions werebecoming worse and they were being deprived of theirlivelihood in the name of development.

The erstwhile Bastar region in Chhattisgarh (whichwas part of Madhya Pradesh till 2000), has more thantwo-thirds of area under forests with 65% tribal popu-lation. The undivided district (it is now subdivided intofour districts), was one and a half times larger thanKerala in area. It is part of the Dandakaranya regionnow, rich in mineral wealth, mainly iron ore. Besidesproviding iron ore to various steel plants in the country,it is also exporting iron ore. Tribals, the original inhabit-ants of the area, never benefited from the wealth pro-duced there. Besides, these tribals who find their live-lihood in farming activities and collection of minor forestproduce were being even forced to leave the area tofacilitate uninterrupted mining operations. Deprived ofwhatever little pieces of land, which they had to sur-render for excavation of rich minerals, they were also

being hounded out by police and forest officials fromtheir subsidiary occupation of collecting minor forestproduce including tendu (beedi) leaves. The police, for-est officials and petty traders were sexually exploitingthe tribal women, the last-named by offering them cheapcommodities and liquor. (This author, who spent nearlya decade during the 1980s and 1990s in that region,has first-hand knowledge of the ground realities there).In the early 1990s, the then PWG leaders began orga-nizing the tribals, taking up their cause. Their first suc-cess came in the form of getting the wages for collec-tion of tendu leaves enhanced. Gradually, the Naxalitesstarted highlighting the tribals’ social and economic prob-lems and put fear in the minds of the exploiting tradersand police and forest officials.

Against this background, the Union Government’sinitiative, though belated, should bring the situation inthese areas under control, win back the confidence ofthe deprived population, restore faith in the administra-tive machinery and make them become part of the main-stream. However, this would depend on the quality ofimplementation of the plan. The immediate need is res-toration of peace. The rebels should first realize thattheir genuine demand for social and economic justicehas finally been recognized by the authorities. Theyshould also realize that to end the exploitation againstthem and bring about qualitative changes in their livesthey must join the mainstream which will bring thembenefits from the positive measures now initiated bythe Government. The Governments concerned should

also be sincere in their approach to ensure that theintended benefits really accrue to the target group.Government-sponsored schemes are usually mired inmalpractices and known to be benefiting only the offi-cials and middlemen involved. The present plan envis-aging approval of schemes at district levels by a com-mittee of the Collector, Superintendent of Police andForest Officer creates apprehensions that all powerswill be concentrated in bureaucrats and that therepresentatives of the potential beneficiaries, tribalsand other poor sections, may not have any role in iden-tification and implementation. Such schemes may notsucceed.

Implementation also requires constant and effec-tive monitoring. This task has been assigned to the Min-istries/Departments of Rural Development andPanchayati Raj at national and State levels. There shouldbe proper coordination between and among all agen-cies involved and close monitoring. A built-in provisionfor a social audit to realistically evaluate the progressshould also be there. Active involvement of nongov-ernmental organizations (NGOs) and voluntary agen-cies in close monitoring and realistic evaluation wouldensure transparency. Identification of schemes whichwould benefit large numbers of beneficiaries, viz com-munity schemes, should get priority. The potential ben-eficiaries should not only be aware of the details of theschemes but they should also have a say in their iden-tification, besides active involvement at every stage ofimplementation.

Excess power is the root cause of corruptionFrom page 15

It is high time to do away with this power ofthe checkpost authority. The interest of thedepartment will not be affected by such a movesince all issues relating to valuation can besettled at the assessment stage. In fact theassessing authorities concerned are betterequipped to deal with this valuation issues.

The courts have time and again depre-cated the practice of detaining goods and ve-hicles at checkposts stating minor technicaldefects. An opportunity should be given to thedealer to rectify inadvertent mistakes in thedocuments and minor clerical errors. Some-times, there may be bona fide omissions tocarry all the required documents along withthe goods. The transaction may be genuineand there will be no scope for tax evasion. Insuch circumstances, it is unjustifiable to de-tain the goods and vehicles solely for the ab-sence of one particular document. It is onlyjust and proper to give reasonable time to thedealer for the production of additional sup-porting documents.

Goods transported through an approvedparcel agency stand on a different footing.Such goods need not be detained at thecheckpost. A specific direction to the parcelagency not to release the goods from itsgodown will protect the revenue. It is under-stood that despite specific departmental in-structions in his regard the checkpost authori-ties are still detaining goods and vehicles ofapproved parcel agencies causing hardshipsto consignors as well as transporters. It isbaffling why appropriate disciplinary action isnot taken against the erring officials.

Section 47(2) of the KVAT Act confersdiscretion on the checkpost officers in certaincircumstances. The first proviso to the sec-tion says the officer can permit further move-ment of goods if the dealer furnishes a bondfor the security amount. The second provisoto the section says the goods can be released

on payment of advance tax in cases of minortechnical errors if a registered dealer owns it.But, unfortunately, the checkpost authoritiesseldom exercise this statutory discretion. Fail-ure to exercise discretion is in fact negationof the statutory right of a person. This is anarea which requires the urgent attention ofthe authorities concerned. It should be mademandatory to mention the reason for decliningto exercise the statutory discretion. This willcheck the scope of corruption at checkpoststo a considerable extent. Moreover it will re-duce the tendency of dragging dealers un-necessarily to court.

Sometimes, the security deposit demandedmay not be a burden to the dealer. But, he maybe reluctant to pay the amount because of theapprehension of delay in adjudication of thematter and consequential delay in refund, ifany. This emphasizes the need for time-boundadjudication and speedy refund thereafter.

Computerization of all checksposts andcommercial tax offices and providing video-conferencing facilities will reduce the scopefor corruption. It is true that some efforts havebeen made in this regard by the State Govern-ment. However, the progress in this directionis still at sixes and sevens. There are com-plaints that notices issued from checkpostsare neither legible nor clear. Legible notices inunambiguous terms are the right of dealers.Altering the position after the issuance of no-tices is another unhealthy practice adoptedby some of the checkpost officials. Such prac-tices should be curbed by stringent action.Finally, it should be borne in mind that excesspower is the route cause of corruption.

(The author is a practising advocatebased in Kochi)


17


16

Nagarjuna combines tradition with modernityT he first corporate house in Kerala’s

ayurvedic sector, the NagarjunaAyurvedic Group is one of the best solu-

tion providers in healthcare through the an-cient system of medicine and treatment. In itssearch for excellence, Nagarjuna has broughttogether the ‘Ashta Vaidya’ and the ‘AryaVaidya’ schools of thoughts of Kerala’s richayurvedic tradition. It has also successfullyintegrated ayurveda’s traditional values withthe modern ethos and contemporary technol-ogy.

The Nagarjuna Group is involved in popu-larizing authentic ayurveda, conducting prod-

Dr DevadasNambuthiripad

Managing Director

uct and clinical research, manufacturing andmarketing ayurvedic products, providing ho-listic ayurvedic treatment services, assistingin setting up ayurvedic treatment centres,propagating medicinal plant culti-vation, promoting ayurvedic stud-ies, imparting training in treat-ments and therapies and publish-ing scientific journals and bookson ayurveda. For achievingthese goals, the group presentlyhas six entities: Nagarjuna HerbalConcentrates Ltd (NHCL), theflagship company running anISO- and GMP-certified manufac-turing facility; Nagarjuna Ayurvedic Centre Ltd(NACL), providing authentic ayurvedic treat-ments and allied services; NagarjunaAyurvedic Treatment Services (NATS);Nagarjuna Research Foundation (NRF);Nagarjuna Social Service Society (NSSS) andNagarjuna Ayurvedic Institute (NAI).

The main manufacturing unit of NHCL issituated at Thodupuzha in central Kerala,which manufactures about 600 products, mar-keting them in 18 States and exporting them to

20 countries, thus becoming thesecond largest product manufac-turer among the 2,000-plusayurvedic product manufacturersin Kerala.

The products are traditionalayurvedic medicines, proprietarybranded healthcare and curativeproducts, FMCG/OTC ayurvedicherbal products, export portfolio ofspecialty healthcare products in-

cluding dietary supplements, single herbs,herbal teas, massage oils, personal care prod-ucts, herbal cosmetic products and herbal toi-let soaps.

NHCL’s R & D has been recognized by the Central Department of Scientific and In-

dustrial Research, the first and only R & Dcertified ISO in Kerala. Its animal testing labo-ratory has been approved by the CentralGovernment’s Committee for the Purpose ofControl and Supervision of Experiments onAnimals (CPCSEA). Nagarjuna is the onlyayurvedic company in Kerala with such a fa-cility.

The group’s ‘Green Leaf’-certifiedNagarjuna Ayurvedic Centre, the award-win-ning ayurvedic hospital at Kalady in centralKerala, imparts authentic ayurvedic treat-ments.

Nagarjuna Ayurvedic Institute is the edu-cation and training wing of the group, whichundertakes ayurveda nursing as well as thera-pist training programmes along with orienta-tion programmes on the Kerala ayurvedic sys-tem and specialities for ayurvedic doctors fromoutside Kerala as well as for international stu-dents.Nitta Gelatin India

Limited (NGIL), an Indo-Japanese joint venturecompany, has forayedinto the southern mar-ket with its new con-sumer healthcare prod-uct GelixerCollagenPep, a func-tional food product forjoint health. NGIL launched CollagenPep inChennai and Coimbatore in December and willbe launching it in other major metro cities byApril 2011.

CollagenPep is a natural safe gelatin de-rivative and is used as functional food supple-ment for improving the joint health and condi-tion of the cartilage. Collagen Peptide is al-ready an established functional food for jointhealth in the US, Europe and Japan. Recentlya clinical study was completed in patients withosteoarthritis to confirm the safety and effi-cacy of Collagen Peptide.

According to Mr G Suseelan, ManagingDirector, CollagenPep has received positive re-sponse from consumers in Kerala. “We had toscale up production to meet the actual demand.The sale of the product exceeded the initialestimates by more than 30%,” he says.

There are about 75 lakh osteoarthritis pa-tients in India, Mr Suseelan says. The com-pany has targeted a market share of 10%among regular users of the product. The mar-ket is expected to grow by 5% a year. Basedon the positive feedback from consumers thecompany is expecting a turnover of about Rs3 crore from Kerala alone in the current fiscal.

NGIL is targeting revenue of Rs 20 crorefrom CollagenPep from the southern marketand Rs 50 crore from all over India by 2012.The company has strengthened its marketingactivity and set a sales target of Rs 500 croreby 2014-15. It would set aside Rs 185 crore tomeet this target mainly through diversifying theproduct portfolio and capacity expansion.

NGIL would soon introduce more productsin the functional food category for improvingthe bone strength mainly addressing womenabove 40. Clinical trials for this will commenceby January 2011.

It is also working on products for woundcare and nutritional supplements forsportspersons, dancers and other activepeople under the Gelixer umbrella brand.

NGIL has plants at Koratty in Thrissur dis-trict, Kakkanad in Kochi and near Nagpur(Maharashtra). The fourth plant in Gujarat isnearing completion.

G Suseelan

Good response toNGIL products


18

T he second Jaffna International Trade Fair 2011(JITF), organized by Lanka Exhibition & Con-ference Services (Pvt) Ltd, a presidential

award-winning company, in collaboration with theChamber of Commerce and Industry Yarlpanam, has‘Open for Business’ as its theme because of thetremendous growth in Jaffna and which is nowready for business. JITF, an annual event, is sched-uled to be held from January 21-23, 2011, at MainStreet in Jaffna.

The landmark fair marks a turning point in thedevelopment of the North with the current rebuild-ing of infrastructure. The purpose of holding thefair once again is to strengthen and bridge tradelinks between the North and the rest of Sri Lanka.With the opening up of the main A9 highway re-linking the North and South, the revival of the Jaffnaeconomy has gradually boomed. Jaffna rapidlyemerging as the major market for all industries, theexhibition will be the most comprehensive gateway

for all sectors to come together and witnessrestructuring that is taking place in the North.JITF ensures the creation of a platform for entre-preneurs and manufacturers to build uptheir business relationships by strengtheningtheir connections. Companies can expand their businesses and will have an opportunity to analysethe market first hand. Jaffna is aggressivelypursuing

To page 19

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19

JITF will helpmake Jaffna a keybusiness centre

K PoornachandranChairman, Chamberof Commerce and

Industry of Yarlpanam

From page 18

partnerships and business plans with the entire worldas it is expected to dominate world trade in the years

to come.

Reflecting this optimism, the current trade fairinvites a massive number of booths covering

an extensive range of products and servicesacross a wide section of industries such

as building, construction, interiors, hospi-tality trade, processed

food and agriculture,food and beverages,packaging, machinery,cosmetics and beautyproducts, electrical ap-pliances, electronics,fabrics and garments,gifts and toys, glass-ware, handicrafts,hardware and tools,health and hygiene, home appli-ances, industrial products, sani-tary ware, stationery etc.Adyapana-Kalvi Jaffna—highereducation and career exhibitionseries held in Colombo and

Kandy—has also taken apath to Jaffna. Con-currently held withJITF, Adyapana-KalviJaffna will invite lo-cal and internationalinstitutes and univer-sities to showcasethe scope and de-

mand in the education industry. As in previous years foreignexhibitors will be seeking maximum possible exposure due tothe demand in the ‘post-war’ scenario. The organizers arealso planning to work together to have investor forums todevelop Jaffna.

The Jaffna public’s per capita income is exceptionally highas they are self-sufficient in spite of getting a lot of foreignremittances from relatives. Interested in re-investing thesefunds JITF will best thread together the long-awaited trade

gap ensuring that Jaffna becomes a bustling centrefor commerce in the country. With the Board of Invest-ment, Sri Lanka Export Development Board, and banksopening branches in Jaffna, JITF will be the drivingforce to reunite the business community hailing fromall parts of the Island. By being a part of JITF 2011,entrepreneurs can reach large areas of the growingnorthern market in a short time. Previously attractingover 30,000 visitors JITF has drawn in huge playersin all industries with over 300 stalls from over 200companies making it the first and largest exhibition

hosted in Jaffna.

This year blue chip companies such as Diesel and MotorEngineering Plc and Ceylon Cold Stores have already comeaboard JITF 2011 as valued sponsors. With literally hundredsof industrialists expected from all industries, visitors can see,try and build new business opportunities and fresh trade linksexpanding their spectrum for future development, all offeredunder one roof. To help MICE tourism the Sri Lanka ConventionBureau has looked at a convention and exhibition centre whichis proposed to be built in Araly to host exhibitions of this mag-nitude. The organizers surely have proved in the past and aregeared to host an exhibition of this magnitude in Jaffna.

This is a tremendous opening for anyone seeking opportu-nity in the North. JITF 2011 will be a guide to a great time oftrade when Jaffa is now ‘Open for Business’.

Jaffna International Trade Fair, 21-23 January 2011

Good scope for Kerala to dobusiness with Sri Lanka

T here are great opportunities for bilateral

business and trade relations betweenSri Lanka and Kerala. This is the conclu-

sion of a delegation of 13 TiE Kerala memberswho visited Sri Lanka recently to explore the

possibilities of doing business with the post-war island nation. The striking similarity of the

people of Sri Lanka and Kerala as also thetwo regions in matters of culture, cleanliness,

attitudes, food habits and tastes can be put tomutual benefit, feels the delegation. The is-

land has two-thirds the population of Keralawhile Kerala has two-thirds its land mass.

TiE Kerala is a body of entrepreneurs withthe mission of nurturing entrepreneurship in

the State and is part of a 15-year-old world-wide network of similar 56 chapters, headed

by ‘TiE Global’ in Silicon Valley, California, USA.TiE Kerala is eight years old and comprises 38

charter members who are successful entre-preneurs and professionals based in the State.TiE Global predominantly comprises IT-based

entrepreneurs. However TiE Kerala is uniquein the TiE global universe with its diverse rep-

resentation from agriculture, automobiles,education, exports, finance, FMCG, garments,

hospitality and tourism, healthcare, IT, manu-facturing, publishing, real estate etc. They

nurture entrepreneurship through a series ofdiscussions aimed at educating, mentoring,

angel investments, partnerships and joint ven-tures and networking with a global audience

who have a similar mindset.

The TiE Kerala delegation, who met the

Ministers of Industry, Agriculture and Tourismin Sri Lanka, was very impressed by their

welcoming nature. They are very keen to helpto forge ties with Kerala and help businesses

that are interested in investing in and tradingwith Sri Lanka. There are several opportuni-

ties in sectors like agriculture, exports, tour-ism and hospitality, education, IT (small busi-

ness) and healthcare. The post-war situationappears quite promising and there is a gen-

eral sense of optimism and upbeat attitudeamong the officials, businessmen and people

of Sri Lanka. They are welcoming and ex-tremely keen to forge partnerships.

TiE Kerala signed a memorandum of un-

derstanding (MOU) with the Federation ofChambers of Commerce in Sri Lanka (FCCSL)

to help facilitate business.

The Board of Investment located in Co-

lombo is the first port of call for businessmeninterested in doing business with or in Sri

Lanka. It is a single-point window and facilita-tor. Consultants like KPMG work with BOI to

smoothen the process.

The High Commission of India has able andwilling officers who can help businessmen

from Kerala with information and guidancerelated to the local real situation in parts of the

island that are underdeveloped, like Jaffna. The northern parts

of the island are ready for development and are ripe withopportunities. The Government is building the infrastructure

to ensure its development.

Besides the charter members who define the direction ofthe organization, TiE Kerala has nearly 150 members who are

students, aspiring and established entrepreneurs, profes-sionals etc. Its President is Mr Murali Gopalan, CIO of UST

Global, and Vice-President is Mr John K Paul, Managing Direc-tor of the Popular Group. It is headquartered in Kochi where

its office is headed by Executive Director K Chandrasekhar.

(The author is President,TiE Kerala )

By Murali Gopalan


20

he bilateral relationship between India andSri Lanka aiming to achieve greater eco-nomic development of the region has

achieved better momentum after the end of yearsof internal disturbances in the island nation. Thetwo countries can benefit from mutually contrib-uting areas of strength.

The liberation war had practically ravaged theeconomy of Sri Lanka. The province of Jaffnawas particularly affected. The people abandonedtheir agricultural activities and fled their places.Jaffna is now free from the clutches of the LTTE.The Government of India is keen to revive theeconomy and has formed a Joint Committee onmutual cooperation. The committee has identifiedvarious areas of collaboration especially forthe internally disturbed persons (IDPs). Theactive involvement of the public and pri-vate sectors is encouraged in therevival process. The possibilitiesof private partnership with thecountry can be explored.

Agriculture: Agricul-ture is the main occupationof the people of Sri Lanka.The major agriculturalproducts of the countryare paddy, coconut, rub-ber, onion, tobacco andvegetables. Jaffnawas also famous forthe production of theseitems. But its agriculturalactivities declined be-cause of the prolonged in-ternal trouble. Now it de-pends upon other parts ofthe country for its agriculturalgoods. The liberation of Jaffnafrom the LTTE has created greatinterest in the area to be self-suffi-cient in agricultural production.

Kerala has a great opportunity to coop-erate with Jaffna in revamping its lost agriculturalactivities. Support can be extended for raisingseedlings and introducing modern farming tech-niques and harvesting and post-harvesting pro-cesses. Assistance in technology and marketingfor value-added products of paddy like parboiledrice, instant food items and bakery products canbe provided. Similarly, a variety of products likecoconut milk and powder, tender coconut chips,coconut water, coconut jam, desiccated coconutpowder, coconut shell powder, charcoal, acti-vated carbon, mechanized defibring units, curledcoir, coir ropes, coir matting and mattresses andgeotextiles can be thought of from coconut. Keralahas a competitive advantage to offer technologyfor the production of these products.

Fisheries: Jaffna has a stretch of coastalline. Once upon a time, it used to boom with fish-ing and allied activities. It can regain its lost gloryin fishing without much difficulty.

Kerala has a solid footing in the fishing indus-try. It can assist Jaffna in fishing, preservation,canning and export. Fish can be preserved andconverted into high-value products like dry fish,fish pickle, fish cutlets, fish mass and fish oils forwhich collaboration arrangements can be ex-plored.

Tourism: Jaffna is surrounded by seven un-inhabited islands famous for their scenic beauty.Tourism was the main source of income of thearea. Well connected by air, it can boost the tour-ism industry further. Activities related to this sec-tor are hotels, resorts, travel agencies, packagedtours, aurvedic tourism, adventure tourism, skat-ing, jet skiing, parasailing, scuba diving, water ski-ing, wind surfing etc. Schools of higher learningin tourism, hospitality management and cateringand training travel guides and front office staffetc can also be started to meet the growing needsof the industry.

Small and medium industries: Sri Lankahad a name in the small and medium industriesfield. Natural resources like coconut, rubber, min-erals and marine products were the inputs of avariety of products. It is reported that around30,000 products can be manufactured from natu-ral rubber alone. The items that can be startedbased on rubber are nurseries, plantations, blockrubber, centrifuged latex, rubber bands, balloons,gloves, rubber foams, rubber sheets, mouldedproducts and blended goods with plastics. Lime-stone deposits are found in certain parts of SriLanka, including Jaffna, which can be convertedinto resins, adhesives, polymers, glass, cement,exhaust gas scrubbers, scrubber reagent, roof-ing materials, drilling mud additives and agricul-ture neutralizers.

According to the 2010 census, the populationof Sri Lanka is about 20 million, Jaffna alone hav-ing 0.50 million. The people require a variety ofproducts and services. A portion of the demand ismet by domestic production. However, a lion’sshare of the current requirements is addressedby India, China etc. Local small and medium indus-

tries have enormous production potential to meetthe captive demand.

Housing: The internal war either destroyedthe houses of many people or partially damagedthose of many others. It is estimated that there isneed for one million houses in Sri Lanka. There ishuge demand for building construction materialsstarting with rubble, bricks, hollow bricks, cement,steel, tiles, asbestos sheets, roofing sheets, doorsand windows, glasses, paints etc. India can pro-vide, apart from cost-effective building materials,low-cost building technology and skilled labour.

Education: Yet another area where Sri Lankarequires urgent support is education. The warhas resulted in the demolition of schools/ colleges.

The library in Jaffna was destroyed during theinternal conflicts. Support is needed for re-

habilitation of institutions of higherlearning. India can extend a help-

ing hand in the construction ofschools/colleges, faculty ex-

change, students’ internshipetc.

Health sector: Thewar has affectedhealthcare delivery.Superspeciality, speci-ality and general hos-pitals are needed forthe rehabilitation of thehealth sector. TheGovernment alone can-

not bridge this gap. Pri-vate investors are wel-

come to start high-qualityhospitals in Sri Lanka. It also

needs equipment for upgrad-ing facilities and also specialist

doctors.

Partnership potential:Kerala has great advantages in

partnering with the rebuilding process ofSri Lanka. It is very close to the island nation.

Moreover many Keralites have migrated there forwork and business. In both Sri Lanka and Keralathe climatic and geophysical conditions are almostthe same. Kerala has proven technology and busi-ness experience in agriculture, fisheries, tourism,small and medium industries, housing, education,healthcare etc. It can provide technology, finan-cial investment, products and skilled manpowerto Sri Lanka. Manufacturing units can be startedwith the active support of the Sri Lankan Govern-ment and Government agencies and even withthe private sector.

Jaffna requires speedy economic recovery. Ithas to bring back the IDPs to normal life. Massivesupport is urgently needed to increase the agri-cultural production to achieve food safety. Theonce-vibrant tourism industry has to be broughtback to its lost glory. Small and medium industriesshould be started to meet internal demand and foreconomic development. The Jaffna administrationalone cannot achieve these. Investors with ap-propriate strategic partnerships can supportthese.

(The author is a professor at the Centre forManagement Development, Thiruvananthapuram.He can be contacted at [email protected])

Good potential for partnershipbetween Kerala and Jaffna

Kerala has proven technol-

ogy and business experi-

ence in agriculture, fisher-

ies, tourism, small and me-

dium industries, housing,

education, healthcare etc.

It can provide technology,

financial investment, prod-

ucts and skilled manpower

to Sri Lanka. Manufactur-

ing units can be started with

the active support of the Sri

Lankan Government and

Government agencies

and even with the private

sector.

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By Job K T

21Jaffna International Trade Fair, 21-23 January 2011


Steel re-rolling mills are viable projects

S

By G Rama Mohanan Nair

Sl. No Rs.in Lakhs

1 Land 250 cents( 10,000 m2) @Rs 25000/-per cent 62.50

2 Electricity connected load 3010 kW Installation cost 87.50

3 Buildings

3.1 Mill shed, civil works and foundations, water tanks, Weigh bridge etc. 185.93

3.2 Factory Building 25.25

4 Machinery cost ( As per para. 6) 881.50

4.1 Erection cost 35.00

4.2 Lubricating oil, Grease first fill, cost of spares etc. 18.00

4.3 Govt Levies, Transportation, Insurance- 10% of Equipment Cost 88.15

4.4 Preoperative expenses @1.5% of Equipment Cost 13.00

4.5 Engg. and consultancy Charges 15.00

5 Project cost excluding Margin money for Working Capital 1411.83

6 Sales revenue @ Rs. 36,700 / t x 36000 t 13212.00

7 Working capital is assumed to be 20% of the sales TO= 2642.40

7.1 Margin Money for WC 25% of WC 660.60

8 Project Cost including Margin Money for Working Capital 2072.43

9 Medium Term Loan assumed as 75% of Project cost 1554.32

10 Interest on MTL @ 12% 186.52

11 Working Capital loan 1981.80

11.1 Inerest on Working Capital @12.5% 247.73

12 Depreciation on Buildings @ 10% 21.12

13 Depreciation on Machinery @ 15% 132.23

14 Electricity charges @ 95 kWh/t x Rs. 9.5 / kWhx 36000 t 324.90

15 Furnace Oil Charges at 38 lit/ tx Rs 36/-x36000 t 492.48

16 Billets Rs. 28600 x 38160 t 10913.76

17 Salaries and Wages + benefits( 30%) 21.62

18 Overheads 5% of TO ( Production,Administrative and Sales) 660.60

19 Total Expenditure 13000.95

20 Net profit Before tax 211.05

Percentage of Profit on TO: 211.05 / 13212 1.60

21 Equity in this case 518.11

21.1 Percentage of Profit on Equity 40.74

Annexure Profitability Analysis

Cost estimate for mill equipment:

Sl. Item Details AmountNo. (Rs. In Lakhs)

1. Re-heating Furnace : 82.00

2. Roughing Mill Complex : 95.00

3. Intermediate Mill Complex : 65.00

4. Continuous Mill Complex : 80.00

5 T.M.T Process equipment : 55.00

6. Cooling Bed and Auxiliaries : 105.00

8. Mill Auxiliaries and Accessories : 169.50

9. Electrical installations : 230.00

Total Rs 881.50 lakh (rupees eight hundred and eighty-onelakh and fifty thousand only).

Suppliers of plant and equipmentand technology are availablein India. It can be said that thisindustry is a good choice for in-vestors who have the basic re-sources and are on the lookout forviable project ideas.

teel is the generic name for a group of ferrous metals,which because of its abundance, durability, versatilityand low cost is the most useful metallic material known

to humankind. Steel in the form of bars, plates, wires, pipesand tubing is used in the construction of buildings, bridges, railtracks, aircraft, ships, automobiles, machinery and many otherapplications. Re-rolling is the principal operation involving heat-ing of billets and rolling to proper contours, dimensions andlengths. The demand is ever on the increase for re-rolled prod-ucts both for structural steel and rods. There is good domesticand export market for re-rolled products. Most of the re-rollingindustry belongs to the small and medium enterprise (SME)sector.

Substantial quantities of re-rolled steel products are beingexported to neighbouring countries like Bangladesh, Nepal andBhutan. Fabricated steel items are also exported to developedcounties including the US and Canada. But India remained anet importer of steel during April-September 2010.

The per capita consumption of steel in India is growing atonly 3.24% and stands at 32 kg in 2010. In China these figuresare 7.5% and 185 kg, respectively. This is because a vastmajority of our rural folk is living in homes made of mud or brick.As more and more people migrate to concrete homes, thispicture will improve.

There are viable investment opportunities in the field forpeople who have the resources and are looking for projectideas.

Product-mix and annual capacity: The main products en-visaged for the purpose of this project are TMT (thermo me-chanically treated) bars, plain rods and CTd (cold twisted)bars of sizes varying from 8 mm to 25 mm most needed by theconstruction industry.

The capacity of production proposed for the plant underconsideration is 12 tonnes/hr x 10 hrs a day x 300 workingdays in a year; this means 36,000 tonnes (t) annually.

The raw material: The raw materials used are M S billets ofsizes 100x100 mm (120 kg), 100x125 mm (135 kg) and 90x115mm ( 105 kg) available from main manufacturers (SAIL, Tata,Reliance) or other major manufacturers (Jindal, Essar, VSPetc).

As there is wastage of about 6%, 36,000x1.06=38,160 t

of raw material has to be procured and processed to get theabove finished production.

Land and building: A land area of about 250 cents (10,000m2) is required. There should be good road access to thefactory plot and it should not be a marshy place where trucksand Lorries loaded with heavy equipment/materials should notget sunk. Proximity to HT three-phase power source is also animportant cost factor. Better if it is away from thickly popu-lated areas.

Buildings of about 4,100 m2 of covered area are to be builtfor factory sheds as well as office, store etc put together.

Electrical items: Connected load and maximum demand:total connected load=4140.00 kW; load in kVA=4,140 =4870.58kVA 0.85 30 min. integrated max. demand = 2,922.35kVA at estimated load factor of 60 % Say=2,925.00 kVA.

Production and demand:

There are approximately 2,600 re-rolling mills in India out ofwhich approximately 1,800 are working inclusive of scrap re-rollers. Of the 1,800, 1,167 are on the lists of the Governmentand governmental agencies.

* In the case of total finished steel (alloy+non-alloy) duringApril-September 2010, production for sale stood at 30.406t**, growth of 4.1% compared to the corresponding periodof the previous year, in which contribution of the non-alloy steel segment stood at 28.875 t, while the rest wasthe contribution of the alloy steel segment (including stain-less steel). The contribution of the main producers stoodat 8.699 t (remains same), while the rest (21.707 t)

was the contribution of the major and other producers.

Exports stood at 1.474 t during April-September 2010, adecline of 4.2%

compared to the previous year, in which contribution ofthe non-alloy steel segment stood at 1.306 t (de-

cline of nearly 11.3%), while the rest was the share of thealloy steel segment (including stainless steel).

* Imports stood at 4.492 t during April- September 2010,growth of 32.7%

compared to the previous year, in which contribution ofthe non-alloy steel segment stood at 3.981 t (growth of30.4%), while the rest was the share of the alloysteel segment (including stainless steel).

A rough estimate of present demand for re-rolled steelstands at 12 t. The fact that India remained a net importer ofsteel shows that there is a demand gap for steel in the coun-try. Old units may continue to fail for various reasons andassuming an annual growth rate of 5% in demand the need fornew units will continue to exist.

Profitability: The annexure shows that there is a return oninvestment of 40% (PBT only is considered.). Strictly speak-ing, profitability has to be worked out on a case-to-case basis.This should be taken only as a rough indication. Generally thebreakeven point of this plant is about 30% and pay-back pe-riod is about 4.5 years. (See annexure)

Suppliers of plant and equipment and technology are avail-able in India. It can be said that this industry is a good choicefor investors who have the basic resources and are on thelookout for viable project ideas.

—————————————————————————

**Million Tonnes

Note: Units of measurement, power etc. are indicated inBIS abbreviations.

(The author is a retired General Manager of Kerala SmallIndustries Development Corporation and is presently an In-dustrial Consultant based in Kochi. He can be accessed [email protected])



he Padmashree Charitable Trust wasformed in 1994 with the main aim of pro-viding quality education. Being the first

one to start a physiotherapy institute inBangalore, the group now has several col-leges under its umbrella and offers a widerange of courses from health sciences tolife sciences including Physiotherapy,Nursing, Medical Laboratory Technology,Biotechnology, Microbiology, Genetics,Biochemistry, Plant Tissue Cultureand Computer Applications. Today, thegroup has made tremendous progressunder the able leadership of its Managing

Trustee, Dr AshwanthNarayan C N.

Situated at Nagarbhavi inBangalore, the institute has anoverall academic atmosphereas it is in close proximity to Ban-galore University campus at

Jnanabharathi, the NationalLaw School of India University,and Ambedkar Institute of Tech-nology. The courses are affiliated to RajivGandhi Institute of Health Sciences, Banga-lore, and Bangalore University.

Apart from the state-of-the-arteducational complex the institutionshave tie-ups with reputed hospitalsto impart clinical training to paramedi-cal students and close links withbiotech companies/research insti-tutes for providing training to thebiotech students. There is also aspecial course to teach the studentEnglish and train those students whoplan to take their IELTS/TOFEL and

other board exams.

The group also provides postgradu-

ate courses. The library of the institutehas the unique distinction of having over10,000 volumes comprising various medi-cal and general books of foreign and In-dian authors, reference books, journalsetc. It is maintained in a serene atmosphereto disseminate knowledge to students.Padmashree also offers merit scholar-ships to all students who excel in univer-sity examinations and secure distinctions,and organizes several conferences,seminars, workshops and national con-ferences.

V-Guard corporate officewins award

The new corporate office of V-Guard IndustriesLtd at Vennala in Kochi has bagged the ‘Gold LeafAward’ for Architectural Excellence, State Level, in thepublic and semi-public buildings category for 2009-10instituted by the Indian Institute of Architects-KeralaChapter.

The design of the building is a collaborative effortof engineers at V-Guard and Veega Land, along withrenowned architect Roy Antony. The stylish 12-storreyed structure has been designed as an environ-ment-friendly building by employing green building prin-ciples. Besides the corporate office, the complex alsohouses V-Guard’s Research and Development Wing,various product groups and marketing division. Workstations have been provided for around 400 employ-ees, along with a cafeteria that can accommodate 200people, four conference halls with seating capacitiesranging from 20 to 200 people and also a rooftop meet-ing place that can accommodate about 500 people. Theoffice complex has a roof garden, fitness centre, rec-reation room and library, in addition to the extensiveopen area on all floors and retiring rooms for visitorsand guests.

Nestled in 1.5 acres of greenery, all 12 floors havea two-metre verandah each lined with flower beds onthe periphery, which occupies 20% of the total con-struction area.

The unique advantage of the design is natural cool-ing, as the verandahs and plants block direct sunlightand heat, bringing down the temperature within thebuilding naturally and restricting the use of air-condi-tioning to just 5% of the area, saving energy.

Rain water harvesting has also been effectivelyimplemented with a 3,30,000-litre capacity tank in whichall rain water that falls on the roof is collected and thentreated and used for drinking and for domestic and

irrigation purposes. The additional source of water is awell in the compound, and the water is treated to makeit suitable for drinking and domestic uses. The waterused for washing and flushes is collected, recycledand treated properly in a sewage treatment plant, andin turn used irrigating gardens on all 12 floors and onthe ground through an automated irrigation system thatensures minimum water wastage. The property alsomaintains the ‘zero discharge’ policy according to pol-lution control norms. The building materials used toohave been selected carefully to minimize the impact onthe environment.

Padmashree offers awide range of courses

T

Dr AshwanthNarayan C N

A conveyor that

makes loading

and unloading

effortlessABI Engineering Private Lim-

ited has been serving Kerala in-dustries for the last 13 years. Thecompany has now come up witha new revolutionary product calledLoading/Unloading Conveyorwhich, according to the company,is a gift to industries that facelabour shortage and are in for vastdevelopment.

With twin boom-type operation, the conveyor canbe used for loading and unloading. It stacks the bag(max 90 kg)/cartons from the lorry/container directly.

The advantages of the equipment are: it can feeddirectly into the container/lorry from the godown, hadcounting facility and loading and unloading height ad-justment, can run on both directions, is easy to movesince the entire system is on wheel and has 24-hourservice back-up. It requires only four or five people toload or unload the entire container/lorry, and reducesone-third of human exertion. It needs 2 HP for opera-tion with a hydraulic power pack.

Mr Murali, Director of the company, claims that ithas prominent customers like Nirapara Rice, KeralaFeeds and KC Distilleries. “Some companies have morethan two conveyors”, he adds.

The system is also available with ‘telescopic type’in which the length can be adjusted automatically. Thecompany manufactures all types of conveyors andfabrications.

Murali



Kailas: specialist in allbranches of dental care

Deepam Group: kindling hearts and hearthsWaste or effluents from an industrial venture usuallymake the environment dirty. Thrissur-based DeepamGroup however does not fully agree with this notion.Deepam makes eco-friendly and user-friendly productsfrom waste, in short, agricultural waste, ie arecanutpalm leaves. So Deepam has become a well-known namein India, especially in Kerala.

The group not only manufactures products for peoplebut machines also, providing employment directly andindirectly to lots of unemployed in rural India making themself-employed. Its activities contribute much to thenation’s economy by uplifting rural poor and providingincome to arecanut growers besides bringing in foreigncurrency inflow. They also help make the environmentpollution-free.

Deepam’s products are palm leaves plates and cups,paper cups, paper plates, paper carry bags, office files,envelopes, umbrellas and school and vanity bags. Thecompany also manufactures the machinery for making

these items and imparts training for making these prod-ucts.

The machines include those for hydraulic concreteblock making, stationary high-density concrete block andpaver block making plants, flyash brick making plant, panmixer, construction winch lift, designer cement tiles, vi-brating earth rammer, screed vibrator, palm plate makingmachine, paper plate making machine, arecanut palm platemaking machine, paper plate making machine, paper cupmaking machine, paper carry bag and office file making

machinery, envelope making machine, chappathi makingmachine and pappadam making machine.

The above machines are designed with modern andadvanced technology for easy manual operation for menand women.

“We could successfully manufacture various ma-chines, purely aimed at uplifting rural India”, says MrLonappan Panthallookaran, the Chairman of Deepam PalmDish. Deepam Umbrellas and Bags and Sanjos Engi-neering Works are its sister concerns.

Kailas Dental Aesthetic and ImplantCentre, the first ISO-certified dental clinicin Kerala, is one of the finest of its kind inthe State providing world-class treatmentfacilities. Located at Thiruvananthapuram,the centre has the most modern sophisti-cated technology and treatment facilities.

A dedicated team of highly qualifieddoctors and adaptation of the latest prac-tices and maintenance are the key fac-tors that make the centre unique. Withthree clinics in prime locations atThiruvananthapuram, Kailas offers easyaccessibility and cost-effective services.

Utmost hygiene, latest sterilizationmethods and meticulous documentationare the hallmark of Kailas Dental Clinics.They specialize in all branches of dentalimplantation, crowns and bridges, den-tures, periodontal treatment, surgicaltreatment and orthodontic treatments.

For the first time in the history of den-tal care, Kailas Dental Aesthetic and Im-plant Centre has introduced the conceptof cardiac dentistry. Kailas provides theultimate dental treatment and care exclu-sively for cardiac patients with most mod-ern and sophisticated electronic gadgetslike multi-channel monitoring machines,

life-supporting gadgets etc. There is anexclusive kids’ point also.

Kailas has recently opened its Cen-tre for Dermatology and Cosmetology.The centre offers treatment for acne andscars, vitiligo, skin rejuvenation, photoaging, hair and nail disorders etc.

Customers fall forShepherd productsShepherd Mouldings & Components(Pvt) Ltd of the Shepherd Group ofCompanies was launched in 1999. Its‘Jewel’ brand of drainage fittings cap-tured the market in no time not only inKerala but in parts of Tamil Nadu andKarnataka where it has dealers andwholesalers. If thePVC drainage fit-tings under the‘Jewel’ brand havebecome so popular,in fact a rage amongusers, it is becauseof the insistence onthe products’ qual-ity by the manufac-turer. “That is whywe have built a taleof romance be-tween customersand our products”, says Mr MathewAbraham, Managing Director of thegroup.

Shepherd Plastics and Chemicalswas started in 1996 in the Major Indus-trial Estate of Kalamassery, Kochi.

What are the specialities of Jewel

products? Says Mr Abraham: “Thedrainage fittings ensure efficient collec-tion and movement of sewage frombuildings having complicated networksof pipelines. They are easy to install bythe more common solvent cementmethod”.

Using the most modern, automaticmachinery and technology for manufac-ture, all the products are manufacturedto ISI specifications. The ‘Jewel’ rangeof products includes multi-floor traps,top tiles, plain and door elbows, plainand door tees, reducers, couplers andend caps and cowls.



visitwww.passlinebusinessmagazine.in

Hykon achieves phenomenal growth

Christo George

Established in 1991, Hykon India hasbecome one of the leading players inpower electronics, renewable energyand energy-efficient products fromKerala. Launched in a humble way by

a committed and dedicated technocrat,Mr Christo George, an engineeringgraduate, with a working capital of Rs50,000 and just five e m p l o y e e s,the company has achieved phenom-enal growth.

Hykon, an ISO 9 0 0 1 : 2 0 0 0company, is now a well-reputedcompany with pan-India presence hav-ing varied interests in medicaltranscription, information technologyand solar energy. It isa multi-crore-turnover company today.

In the renewable energymarket, the company has its po-sition by installing large solarwater heating systems of capaci-ties 10,000 to 30,000 litres perday across towns in westernand southern India. “By 2014,Hykon will become a multinationalcompany and will be exporting energy-efficient products. By the year 2019,Hykon will be a leading research insti-tute catering to the needy society fornon-conventional energy and market-ing the same product throughout theworld at affordable cost for the com-mon man,’’ says Mr Christo George,who is also the Chairman of the HykonGroup of Companies comprising HykonElectronic Systems, Hykon Power Elec-tronics (P) Ltd, Hykon India (P) Ltd andHykon Transcripts (P) Ltd.

Driven by a committed and dedi-cated group of executives, the com-pany has constituted a policy-formu-

lating core committee to planstrategies for each of thecompanies.

“We firmly believe thattotal employee involvement isthe key to sustainable growthand it is our philosophy too,’’says Mr Christo George. The

company has gone national and inter-national through tie-ups with many ma-jor companies. In order to market itsequipment to the western market, it hastied up with Powertronics. Hykon alsohas joined hands with China-basedSinyu Lighting Engineering, one of theleading exporters of fluorescent tubesand lighting sets.

Kraftwork products helpsolve power problemsPower failures and power shortageare frequent in Kerala. It is in these cir-cumstances that the relevance of an or-ganization like Kraftwork Solar Pvt Ltd isfelt. Its solar energy products are to agreat extent a solution to the problemsfaced by the State on the power front.

Having been in the industry for thelast 17 years, Kraftwork is the pioneerin solar water heating technology inKerala manufacturing solar water heat-ers since 1994. The company’s prod-ucts now include solar driers, solar pho-tovoltaic systems and gas-fired systems.Kraftwork has over 5,000 solar thermal

i n s t a l l a t i o n sacross Keralaand Tamil Nadu.

Commitmentto quality, de-pendable after-sales service andstate-of-the-artdesigns makeKraftwork one of the most-sought-afterin the industry. “We ensure that we de-liver the best to the customers. We prom-ise them complete satisfaction and yearsof trouble-free performance,’’ says Mr KN Iyer, Managing Director.

Kraftwork has been in the forefrontof developing solar driers for the mar-ket. It has through its in-house R&D andcollaboration with several universitiesand research institutions developed vari-ous models of solar driers of differentcapacities to dry a range of productsfrom vegetables,

fish, mushrooms etc. Kraftwork’sSolkraft range of solar water heatersincludes both domestic and industrialmodels. The Solkraft range of photovol-taic systems includes SPV modules, so-lar lanterns, solar homelighting systems,solar streetlights and solar power packs.

K N Iyer

WANTEDPASSLINE, Kerala’s only business magazine in English,

with a 16-year track record, needs professionalsfor the following posts:

Keethara Publications Pvt Ltd, 38/125 Ist Floor, Narakathara Road, Kochi-35. Ph: 0484 4027002Email: [email protected]; [email protected]

ReportersAssistant Advertisement Managers (Thiruvananthapuram, Kochi, Kozhikode)

Marketing Executives (all districts)




26

Newmatic makes allconstruction machines

Newmatic Engineering Company started functioningin 1999 at the Ollur Industrial Estate in Thrissur district.Launched in a small way with an investment of just Rs30,000 to manufacture hollow bricks and small machines,Newmatic now makes all types of construction machin-ery, which are marketed throughout Kerala, Tamil Nadu,Andhra Pradesh, Assam and Punjab.

The company’s product variants include theNewmatic brand of soil interlock block, hollow block,pavement block designer, designer cement tiles, tilesmaking machinery, concrete mixer and earth rammer. Italso makes rubber moulds and PVC moulds for pave-ment and floor tiles of different types and sizes, walltiles and interlocking bricks.

The company also provides industrial consultancy.

The machinery section includes soil interlock block-making machine, soil crusher, sieves, cement soil solidblock-making machine, high-density hollow block and

pavement block-making machines, hollow block-mak-ing machines, double and single vibrators, earthrammers, high-density hydraulic-operated pavementblock-making machines, block-cutting machines, hydrau-lic hopper type-mixing machines, pan mixers, con-crete mixers full bags and concrete mixers of me-chanical hopper types.

The company, which gives a lot of impor-tance to after-sales service, has a turnoverof Rs 1.2 crore, and is exporting its productsto the Middle East. Its expansion plan includesmanufacturing heavy-duty machines. About75% of its total business is in Kerala.

Mr Sony Joseph, the chief ofthe company, is an ITI certificateholder in this field. HIs wife Julieis also very much involved in thebusiness and knows its intrica-cies very well.

Mr Andrew Pappachen, former Global President and Glo-bal Chairman of the World Malayalee Council (WMC), was swornin recently as the Environmental Commission in Montville, NewJersey, US, where he resides. An environmental engineer byprofession, Andrew has a master’s degree. The commissionposition is voluntary.

Andrew now works as the Director of Operations for New-ark Watershed Conservation and Development Corporation andChairman of the Asian American Heritage Council of New Jersey.

“The new appointment is recognition of the services of the Indian community,”Andrew said.

Andrew Pappachen gets new position

Andrew Pappachen

SAES to upgradebusinessSouth Asia Exhibition Services (SAES)network which is a multinational organi-zation is focusing on upgrading the tradefair business in South Asia with the ob-jective of promoting the region as a venuefor international trade fairs and events.It is operating currently in India, Sri Lanka,Pakistan and the Maldives.

Managed by talented professionalshaving many years of experience in theindustry, SAES focuses on industry-specified trade fair industry in South Asiawith the objective of developing it intointernational levels by raising standardsand attracting overseas participation.

Some of the industries for whichSAES organizes events are construc-tion, apparel, agriculture, education, food,travel, hospitality, jewellery, printing,packaging, IT and security.

SAES has an ever-expanding net-work of sales agents in Sri Lanka, India,Malaysia, Dubai, Singapore, theMaldives, Hong Kong, Thailand and Paki-stan.


Sadana—introducing qualityproducts at right time

One of the leadingmanufactures of flour millmachinery, oil mill machin-ery and tile machinery,Sadana Engineering In-dustries is a well-knownname in the sector.Launched in 1989 by MrMavis Davis, Sadana En-gineering Industries hasnow attained a brand status.

Mr Mavis Davis, who has estab-lished a name for himself in the brick-making field, is also a well-known in-vestor. When brick and cement pro-duction become popular, Sadana suc-ceeded in manufacturing machines

that help to reduce costs of pro-duction.

Now Sadana is the forerun-ner in the tile and tile manufac-turing machine field. The ma-chines are manufactured usingItalian technology and have agood market all over India and theGulf regions. Introducing finequality products at the right time

in the markets making use of the op-portunities around is the key to thesuccess of his business, says MrDavis. Low competition, big demand,quality products at affordable rates—these are also some other reasonsfor Sadana’s achievements, he says.

Mavis Davis

Agent In India/Sri Lanka:

“CRUZ EXPOS”, Chingam, K. P., Vallon Road, Kadavanthra,

Cochin – 682 020. India.Tel:+91-484-2320290, 4064135, Mob: +91-8893304450.www.catexpo.kz mail: [email protected]

The 5th InternationalCentral Asia Carpet&Flooring Exhibition Almaty-Kazakhstan3-6 March 2011, Atakent Exhibition Center

Main Product Themes: Carpets(had –made) Woven carpets(machine-made) Texile Floor coverings Resilient floor coverings Wood and parquet flooring Laminated coverings Fibres,yarns and textiles Tools and machines


27

By Shinin Sunny

INSURANCE

Senior citizens’ schemes thatfetch you tax benefits

eople think of tax-saving avenues during thispart of the year. Tax exemptions under Section80 C and 80 D become relevant here. There is

space for Rs 20,000 if investments in infrastruc-ture bonds are pushed to Section 80 CCF. This isthe right time to think of senior members of yourfamily. A health insurance cover that you give themwill fetch you tax benefits. Let us analyse somepopular health/medi-claim policies and see whetherthey will suit you.

Varistha Mediclaim: This is for se-nior citizens from National Insurance

Co Ltd. It covers hospitalization anddomiciliary hospitalization ex-

penses under Section I aswell as expenses for

treatment of criticalIllnesses, if

opted for, under Section II. Diseases coveredunder critical Illnesses are coronary arterysurgery, cancer, renal failure, ie failure of bothkidneys, stroke, multiple sclerosis, major or-gan transplants like kidney, lungs, pancreasor bone marrow, paralysis and blindness,which can be covered with extra premium.

The sum insured is fixed per person. Un-der hospitalization and domiciliary hospitaliza-tion cover, the sum insured is Rs 1,00,000 andunder critical illness cover Rs 2,00,000. Criti-cal Illness cover is an optional cover underthe policy. Those who do not opt for criticalillness cover are entitled to hospitalization anddomiciliary hospitalization expenses paid onreimbursement basis or as cashless hospital-ization. Those opting for critical Illness covermay opt for claim either under Section I orSection II (if not hospitalized) or under bothsections for those diseases categorizedabove as critical Illnesses but claim underSection I will be paid either on reimbursementbasis or as cashless hospitalization if it is oth-erwise admissible. If in any policy year a criti-cal illness is diagnosed and claim paid there-after, in subsequent renewals the person maymake use of cover both under Sections I andII but with the exclusion both under Sections Iand II of that particular critical illness whichhas been diagnosed and claim paid in the pre-ceding policy year.

People in the age group of 60-80 can en-ter this scheme fresh. However, for renewal,age limit will be extended up to 90 years inwhich case the premium of 76-80 age bandwill be loaded by 10% up to 85 years and 20%up to 90 years. No medical checkup is requiredif the insured was covered under any healthinsurance policy of National Insurance Com-pany or other Insurance companies uninter-ruptedly for the preceding three years. Otherpersons have to undergo the following medi-

cal checkup at their own cost: blood/urinesugar; blood pressure; echo-cardiography;eye checkup including retinoscopy.

Senior Citizen Specified DiseasesInsurance: This comes from Oriental Insur-ance Co Ltd. The minimum sum insured thatcan be selected is Rs 100,000 and the highersums insured can be selected in multiples ofRs 100,000 up to a maximum of Rs 5,00,000and covers specified diseases only. There isa compulsory co-payment of 20% on the ad-missible claim amount and discount in premiumis allowed for opting for voluntary co-pay-ment. The benefit of continuity will be extendedif the person is already insured with anymediclaim policies of the company. Cashlessservice through TPA is limited to Rs 1 lakh. Thefollowing are covered: accidental injury: 100%of sum insured; knee replacement: 70% ofsum insured; cardiovascular diseases: 50%of sum Insured; chronic renal failure: 50% ofsum insured; cancer: 50% of sum insured;hepato-biliary disorders: 50% of sum insured;chronic obstructive lung diseases; 20% of sumInsured; stroke: 20% of sum Insured); benignprostrate: 15%; orthopaedic diseases: 15%;ophthalmic diseases: 10%. The policy is avail-able to any Indian citizen who is aged 60 yearsand above and for hospitalization in India only.

Pre-acceptance tests required; physicalexamination; urine(microalbumin urea);glycocylated haemoglobin; ultrasonography(whole abdomen and pelvis); X-ray both knees(anteposterior and latrel); complete eye testincluding fundus etc; stress test (TMT).

Senior Citizen Specified DiseasesInsurance: In this plan from United India In-surance Company the sum assured can bebetween Rs 50,000 and Rs 3,00,000. The policywill pay to the insured person a daily cashallowance as given below from the third dayonwards for the period of hospitalization in

To page 28

Premium comparative rate chart for senior citizens

Age Bajaj National New India Oriental Star Health United India

Allianz Insurance Insurance

1 lakh 2 lakh 1 lakh 2 lakh 1 lakh 1.5 lakh 1 lakh 2 lakh 1 lakh 2 lakh 1 lakh 2 lakh

61-65 7909 12357 5072* 7507* 4671* 6940* 5460* 10556* 4908 9326 4098 7868

66-70 11863 18536 6304* 8889* 5157* 7656* 5824* 11041* 4908 9326 4872 9394

71-75 - - 6756* 9425* 5703* 8469* 6916* 13832* - - 5374 10560

76-80 - - 8360* 11136* 6248* 9282* 7401* 14560* - - 6632 13034

above 80 - - - - - - - - - - - -

Note: For more information read the company’s brochure/policy wording. These rates are inclusive of service tax (10.3%).New India Max. Sum Insured Rs.1.5 Lakh. * Included other loading @ 10%

Schedule 1

P

A health insurance

cover that you give the

senior members of your

family will fetch you

tax benefits.

Here are some

popular health/mediclaim

policies that may suit you.


28

The following diseases or the disease-led conditions also formexclusion in the policy.

Diabetes Hypertension Diabetes & Hypertension

Diabetic Retinopathy Cerebro Vascular accident Diabetic Retinopathy

Diabetic Nephropathy HypertensiveNephropathy Diabetic Nephropathy

Diabetic Foot /wound Internal Bleed/ Haemorrhages Diabetic Foot

Diabetic Angiopathy Coronary Artery Disease Diabetic Angiopathy

Diabetic Neuropathy Diabetic Neuropathy

Hyper / Hypoglycaemic Hyper / Hypoglycaemicshocks shocks

Coronary Artery Disease

Cerebro Vascular accident

Hypertension Nephropathy

Internal Bleeds/Haemorrhages

Schedule 3

Since the pre- and post-hospitalization covers are beyond the scope of this article pleaserefer the product brochure for details. No claim will be payable in respect of the followingdiseases/conditions contracted during the period starting from the first day of inception of thecover for the first time.

Sl. No Name of Disease/Ailment/Surgery Waiting Period

1 Any skin disorder 18 months

2 All internal & external begining tumors, cysts,polyps of any kind, including benign breast lumps 18 months

3 Begining Ear, Nose, Throat disorders 18 months

4 Begining Prostate Hypertrophy 18 months

5 Cataract & age related eye ailments 18 months

6 Diabetes mellitus 18 months

7 Gastric/ Duodenal Ulcer 18 months

8 Gout & Rheumatism 18 months

9 Hernia of all types 18 months

10 Hydrocele 18 months

11 Hypertension 18 months

12 Hysterectomy for Menorrhagia/ Fibromyoma, Myomectomy and Prolapse of uterus 18 months

13 Non Infective Arthritis 18 months

14 Piles, Fissure and Fistula in Anus 18 months

15 Pilonidal Sinus, Sinusitis and related disorders 18 months

16 Prolapse Inter Vertebral Disc unless arising from accident 18 months

17 Stone in Gall Bladder & Bile duct 18 months

18 Stones in Urinary Systems 18 months

19 Unknown Congenital internal disease/defects 18 months

20 Varicose Veins and Varicose Ulcers 18 months

21 Age related Osteoarthritis & Osteoporosis 48 months

22 Joint Replacements due to Degenerative Condition 48 months

Schedule 2

From page 27

connection with admitted claims subject to amaximum stated below on payment of addi-tional premium. The age at entry can be 61years to 80 years and taking a mediclaim policyfor the first time.

Senior Citizens Mediclaim Policy:Under this policy from the New India Insur-ance Co Ltd, the sum insured per person is Rs1 lakh or Rs 1.5 lakh. Limited cover for hospi-talization in Government ayurvedic/homoeopathic and unani hospitals. Senior citi-zens holding a current mediclaim policy canon renewal migrate to senior citizen mediclaimpolicy. A point to note is that pre-existing con-ditions are covered after 18 months of con-tinuous insurance with the company and fur-ther pre-existing conditions like hypertensionand diabetes mellitus and their complicationsare covered after 18 months of continuousinsurance but only on payment of an addi-tional premium. Cumulative bonus is allowedon every claim free (renewal) year at 5% perannum to a maximum of 30%. The policy is

available for people between the age of 60and 80 years. Pre-acceptance tests required;CBC; blood sugar (fasting); blood sugar (PPS);SGPT; SGOT; cholesterol; triglycerides; serumcreatinine; urine routine; ECG; X-ray chest PAview; physical clinical checkup; eye checkupfor cataract and glaucoma; pap smear test.

Silver Health: Under Bajaj Allianz G I C’sSilver Health, the sum insured can range be-tween Rs 50,000 and Rs 5,00,000. A USP ofthis plan is that pre-existing diseases are cov-ered up to 50% from the second year of thepolicy. Flat benefits of 3% on admissible hos-pitalization expenses are paid towards pre-and post-hospitalization expenses. With Sil-ver Health, the member has access to cash-less facility at a wide network of 2,400 hospi-

tals across India (subject to exclusions andconditions). In case of admission in non-net-work hospitals, the expenses incurred wouldbe reimbursed within 14 days from the sub-mission of all documents. And 20% of co-pay-ment of the admissible claim is to be paid bythe member if treatment is taken in a hospitalother than a network hospital. However waiverof co-payment is available on payment of ad-ditional premium. The entry age for this plan is46-70 years. Renewal of the plan is possibleup to an age of 75.

Senior Citizens Red Carpet Plan: Un-der this plan from Star Health and Allied Insur-ance Ltd, the minimum sum insured Rs1,00,000 and maximum Rs 200,000. Treatmentis possible at networked hospitals only. All pre-existing diseases are covered from the firstyear, except those for which treatment oradvice was recommended by or receivedduring the immediately preceding 12 monthsfrom the date of proposal. Diseases for whichtreatment or advice was recommended by orreceived during the immediately preceding 12

months from the date of proposal will be cov-ered from the second year onwards. The ageat entry is between 60 and 69. Renewals areguaranteed beyond 69. The greatest attrac-tion of this plan is that no pre-insurance medi-cal test is required.

(See Table 1, 2, 3)

Other general exclusions to keep in mindare: injury or disease directly or indirectlycaused by or arising from or attributable towar, invasion, act of foreign enemy, war-likeoperations (whether war be declared or not)or by nuclear weapons/materials; circumci-sion (unless necessary for treatment of a dis-ease included hereunder or as may be ne-cessitated by any accident); vaccination, in-oculation or change of life or cosmetic or of

aesthetic treatment of any description; hairtransplant; plastic surgery other than as maybe necessitated by an accident or as a part ofany illness/disease; surgery for correction ofeyesight, cost of spectacles, contact lenses,hearing aids etc; convalescence, general de-bility. ‘run-down’ condition or rest cure; con-genital external diseases or defects or anoma-lies; sterility, any fertility, sub- fertility or as-sisted conception procedure; venereal dis-eases; intentional self-injury/suicide; all psy-chiatric conception procedures; venereal dis-eases; intentional self- injury/suicide; all psy-chiatric and psychosomatic disorders and dis-eases/accidents due to and or use, misuse orabuse of drugs/alcohol or use of intoxicatingsubstances or such abuse or addiction etc;

all expenses arising out of any conditiondirectly or indirectly caused by, or associatedwith, human T-cell lymphotropic virus type III(HTLD-III) or lymohadinopathy-associated vi-rus (LAV) or the mutants derivative or varia-tions deficiency syndrome or any syndromeor condition of similar kind commonly referredto as AIDS, HIV and its complications includingsexually transmitted diseases; expenses in-curred at hospital or nursing home primarilyfor evaluation/diagnostic purposes which arenot followed by active treatment for the ail-ment during the hospitalized period; expenseson vitamins, tonics, mineral water and allieditems unless forming part of treatment for in-jury or disease as certified by the attendingphysician; naturopathy treatment, unprovenprocedure or treatment; experimental or alter-native medicine and related treatment includ-ing acupressure, acupuncture, magnetic andsuch other therapies etc; expenses incurredfor investigation or treatment irrelevant to thediseases diagnosed during hospitalization orprimary reasons for admission; private nurs-ing charges, referral fee to family doctors,outstation consultants/surgeons’ fees etc;external and/or durable medical/non-medical

equipment like ambulatory devices, ie walker,crutches, belts, collars, caps, splints, slings,braces, stockings etc of any kind; CPAP, CAPD,

infusion pump, diabetic footwear, glucometer/thermometer, nebulizer and similar related items

etc and also any medical equipment which issubsequently used at home etc; all non- medi-

cal expenses including personal comfort andconvenience items or services such as tele-

phone, television, ayah/barber or beauty ser-vices, diet charges, babyfood, cosmetics,

napkins, toiletry items etc, guest services andsimilar incidental expenses or services etc;

change of treatment from one system of medi-cine to another unless necessitated and

agreed/allowed by the TPA/company; treat-ment of obesity or condition arising therefrom

(including morbid obesity) and any other weightcontrol programme, services or supplies etc;

any treatment required arising from theinsured’s participation in any hazardous ac-

tivity such as scuba diving, motor racing, para-chuting, hang gliding, rock or mountain climb-

ing, other allied similar activities etc; any treat-ment received in convalescent home, conva-

lescent hospital, health hydro, nature care clinicor similar establishments; any stay in the hos-

pital for any domestic reason or where noactive regular medical treatment is given by

the specialist/physician; outpatient diagnos-tic, medical or surgical procedures or treat-

ments, non-prescribed drugs and medical sup-plies. massages, steam bathing, shirodhara

and like treatment under ayurvedic treatment;any kind of service charges, surcharges, ad-

mission fees/registration charges, file chargesetc levied by the hospital; doctor’s home visit

charges, attendant/nursing charges duringpre- and post-hospitalization period; treatment

which is continued before hospitalization andcontinued even after discharge for an ailment/

disease/injury other than the one for whichhospitalization claim is made/admissible.

Schemes fetching tax benefits


29

2010 a year of awards for Sobha Developers

Union Finance Minister Pranab Mukherjee presents the award to Dr V A Joseph, MD

and CEO of South Indian Bank, in the presence of Mr Avik Sirkar, Editor-in-Chief,

Amrita Bazr Patrika Group, and Mr Venkat Chary, Chairman, MCX.

SIB bags yet another ‘Best Bank’ awardUnion Finance Minister Pranab

Mukherjee presented ‘India’s Best Bank2010’ award in the ‘Business World-Pricewater House Coopers Best BanksSurvey 2010’ to South Indian Bank (SIB)recently. Dr V A Joseph, Managing Di-rector and Chief Executive Officer ofSIB, received the award at a functionheld in Mumbai. This is the third time ina row that SIB is bagging the ‘best bank’award. In November last Kerala ChiefMinister V S Achuthanandan presentedit with the ‘Best Bank’ (in the ‘PrivateSector-Traditional Banks’ Category’)award of the State Forum of Bankers’Clubs, Kerala. In the ‘Financial ExpressAwards for India’s Best Banks 2009’by the global management consultancyErnst & Young, SIB had bagged the‘Best Bank’ award in the ‘TraditionalBanks’ category.

“This coveted award speaksstrongly about the corporate metamor-phosis SIB has undergone by effect-ing rebranding, achieving asset qual-ity, implementing banking technologyand recruiting young and qualified per-

sonnel. This also reflects thecommitmentto excellence of our teammembers in these turbulent times when

even global financial institutions have

been in trouble”, saidDr Joseph.

According to SIB, it has crossed

Rs 44,000 crore in total business and

has seen consistent improvement over

the years in its asset quality on ac-

count of higher recoveries and low

delinquencies. The net NPA had im-

proved to 0.38% as on September 30,

2010, from 0.43% of the correspond-

ing previous year. Moreover, the NPA

provision coverage has stood at

70.54% which is well above the RBI

stipulation of 70% ensuring lower pro-

vision in future.

The ‘Vision 2013’ of the bank en-

visages a total business of Rs 75,000

crore, a network of 750 CBS

branches, 750 ATM centres and an

employee headcount of 7,500 to attain

ROA of 1.2% by FY2013.The bank is

poised to achieve Rs 48,000-crorebusiness this fiscal.

The year 2010 saw infrastructure developmentgiant Sobha Developers bagging a slew of awards. Ninefrontline companies and organizations presented the

company with awards as recognition for its achieve-

ments in the construction field and merit in security steps.

On December 8, the Food Court built by Sobha De-

velopers for Infosys Technologies Limited at Hinjewada

in Pune was selected for the Best of Best Award of the

Builders Association of India and in November it got the

Economic Times’ Acetech Award for Excellence in Inte-rior Design for the Infosys Global Education Centre.

The other awards and recognitions were: a specialmention in the category of Recreational ArchitectureAwards announced by Architecture + Design Magazineand Spectrum Foundation for construction of the Banga-lore Food Court Terminal Buildings in February; BaerTechnologies Services’ the Best Contractor, Working WithSafe Practices at the Site Award in March; ConstructionSource India’s Best Real Estate Developer for IT Infra-

structure Award; Lead of American Communications Pro-fessionals’ three different awards in July; Silver Awardin real estate category; Best in-house Gold in the Asia-Pacific Region and 93rd position in Worldwide 100 TopAnnual Reports; Construction World’s India Top 10 Build-ers Award in August; Indian Concrete Institute’s BirlaSuper Endowment Award for the outstanding concretestructure in Karnataka in September and the Indian Con-crete Institute Award for the Global Education Centre inMysore Infosys Campus.

RNP approach shownat Cochin airport

Airbus’ Quovadis RNP subsidiaryand IndiGo have successfully demon-strated, using an Airbus A320, the first

‘required navigation performance’ (RNP)flight of any commercial airliner in India

at Cochin International Airport, thenation’s seventh busiest airport.

Specially developed by Quovadis,the RNP procedure for this airport was

validated using Airbus flight simulators.Following this successful flight by

IndiGo, Jet Airways will also demonstratethis procedure at the airport using a

Boeing 737-800 soon. Together, all op-erators with ‘RNP-capable’ aircraft will

benefit from RNP approaches at theCochin airport once the new procedureshave been officially published by the au-thorities.

“RNP approaches are a great wayto achieve savings while improvingsafety,” says Mr Paul-Franck Bijou, Chief

Executive Officer of Quovadis. “RNPnavigation has the necessary flexibilityto optimize and segregate trajectoriesfrom non-RNP traffic, terrain and ob-stacles”.

The new procedure for India, whichhas been jointly financed by Airbus andthe French Civil Aviation Authority(DGAC), brings the following benefits toboth local authorities and airlines at theCochin airport: fully managed approachon contained trajectories; a much shorterflight path saving 40nm for operators oneach approach, equating to approxi-mately 1,000lb fuel saved per landing,whilst reducing noise emissions andeasier air traffic management especiallyin areas with reduced or no radar cov-erage.

“We are looking forward to flyingcommercially RNP APCH at the Cochinairport in the very near future,” says MrAditya Ghosh, President of IndiGo.



30FUNDING

Kerala has good prospects for

attracting VC/PE funds consid-

ering the abundant availability of

a variety of agricultural raw ma-

terial resources. The opportuni-

ties are in the following sectors:

spices; plantation products;

processing of rubber, coconut,

value-added cashew, pineapple,

mushroom, strawberry, cocoa,

tapioca, seafood and meat; flo-

riculture; dairy farming and pro-

cessing; forest/wood-based in-

dustries and agro exports.

T

30


By A T Pillai

he growth potential of the agro/food processingsector in India has not been fully exploited. This ismainly attributed to small-scale operations, inabil-

ity of entrepreneurs to take high risks and lack ofawareness of or information on business and fund-ing opportunities. Involvement of a resourceful ex-ternal partner can possibly improve productivity andmarketing and bring about consequent high earningson investments made. The infusion of funds fromventure capital (VC) and private equity (PE) compa-nies is an option to accelerate the growth of agro/food processing and other agribusiness activities inthe country.

PE and VC firms raise capital from high net worthindividuals and institutional investors and then investthis capital in profitable enterprises, but expect highreturns, usually 20%-25%. VC/PE funds target suc-cessful family-driven private limited companies. Thesefunds prefer to invest 20% to 35% of the equity ormore depending on the nature of business and eq-uity support required by the promoters. The equityinvestments are made after a due diligence study.Both VC and PE funds are temporary in nature rang-ing from five to seven years after which they exit. Bythat time a VC/PE-supported company will have sta-bilized and reached a comfortable position.

VC and PE funding companies work more or lesson a similar pattern. While VC companies focus onstart-up and early-stage firms, PE companies fundmostly established companies looking for funds for

expansion. The advantage of VC/PE investment isthat it brings in strategic advisory firms to providesupport and ensures proper utilization of capital forthe growth of the company.

VC and PE firms are registered with the Securityand Exchange Board of India (SEBI) and are wellregulated and tracked. PE/VC funds are much differ-ent from those of traditional banks and their monitor-ing mechanism is also different.

The main selection criteria for investmentsare: growth potential of the sector; strong technol-ogy base of the company; integrity and reputation ofthe promoting group; strong market demand for theproducts; potential to earn high return on investment;a well-articulated business plan; strong exit strat-egy; investment will be in private limited/unlisted pub-lic limited companies.

India has witnessed a tremendous rise in PE andVC financing since 2004. Indian companies are nowcreating partnerships with PE/VC firms. The focus ofinvestment used to be the information technology,infrastructure and healthcare sectors, but the firmnow fund other sectors as well.

In recent years, agribusiness companies haveattracted VC and PE funds from Indian and globalinvestors. As the lifestyle of Indian society is fastchanging because of economic prosperity, investorssee great potential for earnings in the agribusinesssector. Companies that have benefited from thesefunds recently include those involved in milk process-ing, rice processing, seed production, edible oil, fruit

and vegetable processing, quick service restaurants(QSRs) etc. It is learnt that many agro-based propos-als are in the pipeline to secure equity funds. Secur-ing these funds is worth if the investment size is Rs12 crore or more, considering the high administrativecost involved. There is no upper limit. However, someVC funds invest in small deals as well.

Kerala has good prospects for attracting VC/PE

funds considering the abundant availability of a vari-

ety of agricultural raw material resources. The op-

portunities are in the following sectors: spices; plan-

tation products; processing of rubber, coconut, value-

added cashew, pineapple, mushroom, strawberry,

cocoa, tapioca, seafood and meat; floriculture; dairy

farming and processing; forest/wood-based indus-

tries and agro exports.

There are other opportunities as well. Existing

companies interested in scaling up their operations

or setting up new agribusiness ventures have

to prepare business plans for submission to VC/

PE funding agencies. The resource potential in

Kerala is unlimited and entrepreneurs should make

the best use of the equity funding support available

from VC/PE firms. This is a good opportunity to at-

tract foreign direct investment (FDI) in Kerala as most

of the agro-products in the State have export pros-

pects.

(The author is an agri-business consult-ant and can be contacted at: [email protected].)


31THE ENVIRONMENT

IOC’s eco-friendly and winningmix of business and pleasure

The 3.29-acre

plot that IOC

acquired about

10 years ago is

an ideal location

for people mainly

on travel as it is

environment-

friendly. Here is a

place where you

will find every-

thing—almost—

you want and

need for your

rest.

Passline News Service

fter a tedious long journey with your family you wish tohave some rest and fill your car with petrol. You are just5 km from Angamaly, at a place called Pongam. Beside

the bus stop at Pongam on NH 47 you notice an Indian OilCorporation (IOC) petrol station, Jubilee Retail Outlet (JRO)with a vast parking space nestled in elegant environs. Its al-lure is unmistakable. You murmur to yourself: I have comehome to the place of my dream.

After fuelling the vehicle youpark it there. (Parking for light ve-

hicles is free of charge; for big ones like buses a fee of Rs 100is charged).

You then want to relieve yourself. There are comfort sta-tions for both women and men. You may quench your thirst,can have something to eat and then have a short nap. You canalso enjoy yourself by watching butterflies, cute birds, petanimals. No problem, your kids can enjoy the icecream or softdrinks at the pizza hut or play or rest at thechildren’s park while adults may take their mealat the hotel, or take rest at the dormitory cots.

The 3.29-acre plot that IOC acquired about10 years ago is an ideal location for people mainlyon travel as it is environment-friendly. Here is aplace where you will find everything—almost—you want and need for your rest.

The new concept of converting barren landsinto eco-parks was conceived by IOC SeniorDivisional Retail Sales Manager (SDRSM) V RMenon and endorsed by Chief Manager (RetailSales) Soman Mathews about six months ago.The objective is to help enrich the quality of life

of the community and to preserve the ecological balance andheritage through strong environmental conscience. This is thefirst such outlet by IOC in India.

The first priority was to protect the degenerating multicol-ored little species—butterflies—which proffer hues of coloursto nature and to your eyes simultaneously and cool the heartsof onlookers as these cute ones perch and fly up from differ-ent varieties of host plants planted suiting the habits and tastesof the caterpillars. Butterfly gardening is a conservation-cum-educational programme. “Since most of the butterfly host plantsare confined to natural patches of vegetation, it is important toconserve such types of vegetation which is usually foundalong roads, rivers and open landscapes. As we conserve,we are indirectly conserving a variety of native plants andanimals. Butterflies require specific eco-climatic conditions.High temperature keeps butterflies away from the plants. Sowe can enjoy them only at dawn or dusk’’, says Mr AlexanderMathews, Business Manager of the retail outlet.

Besides butterflies, chirping parrots, cooing doves, cock-ing guinea hens and mooing rabbits and swans etc add glitterand glamour to the park.

On the environmental side, waste management is a prob-lem everywhere in the world. Passersby can see assorteddustbins placed everywhere to carry non-biodegradable andbiodegradable wastes. Later some agencies collect them tothe processing units. The food waste is converted there intovermin-compost to be used for the multiple medicinal or herbalplants growing there. ‘We have a plan to plant vegetable sap-lings there,” says Mr Mathews.

Apart from this, there is a biogas plant, a rainwater har-vesting system and a wastewater treatment plant which ca-ter to the water needs of the pump, a hotel and a park. Thebiogas serves the fuel needs of the hotel and saves nearly Rs150 a day on this account.

IOC consults Kerala Forest Research Institute (KFRI) forguidance.

A


32MANAGING

If you wish to plan for a year sow seeds...

If you wish to plan for ten years plant trees...

If you wish to plan for a lifetime develop men ...

(Kuan Chung Tzu)

he primary focus during the days ofideating on larger issues of manpowerwas to reach back to the basic skill-

need-inequality general assessment of em-ployer needs with regard to their manpower.Though we realized it early on, employerneeds kept changing on the dynamic envi-ronment shaped by global business vitalitiesposed by opportunities, competitiveness andchallenges created by it. The sustained yetsometimes growing disparities between em-ployer requirement and campus producehave been a potential threat to the idea of agiven surplus of employable manpower inthe country. A report in 2005 projects Indiaas the one among the few countries havingsurplus manpower by the year 2020.

Over the last few years, we have wit-nessed seamless efforts by corporates onmaking their employee intake to a workablesuitability by enforcing large amounts of timeand other resources. The idea is to correctlyidentify opportunities and build a coherentroadmap, which should result in effectiveimplementation and hence optimize the op-portunities which were not realized.

Let us check these following patterns.The number of students not attending pri-mary schools in India is 8 million.

The percentage of surplus population inIndia by 2020 is estimated at 8%. Though thenumbers do reveal much for many it could be

hiding lots. On one side we are talking about8 million children not getting even primary edu-cation, on the other a surplus by 2020. It isquite intriguing to think these as two sides ofthe same coin!

It should not remain a mere fascinationof some statisticians on the surplus man-power our country would have which canbe an advantage for a growing economy.Without a proper roadmap, policy for educa-tion, skills development etc it would remain adream for us to achieve the benefit of thesurplus manpower. When we talk of employ-able workforce we mean ‘the number ofpeople capable of work and among those,those willing to work. Moreover, such man-power should have the necessary educa-tion, skills and opportunity to work.

The probable future risk of having eithersurpluses or shortages, or both, in particularkinds of manpower skills can then be re-duced by good planning so the balance be-tween demand and supply can be achievedand then maintained through continuous re-adjustments and reassessment of both de-mand and supply sources. It is agreed thatpopulation growth at some point can propeleconomic growth of a nation, but then a popu-lation without ‘employable skills’ could alsobecome a burden on reasons of unemploy-ment. The risk we are running into is quitehuge; so is the opportunity.

Without proper planning, policies and ex-ecution the risk of surplus turning to just an-other overpopulated country looks probable.

The importance of manpower planningthen is not to plan for having adequatelytrained labour only, but to create suitable op-portunities for them to use their skills. Badplanning can bring about low economic pros-perity with overpopulation, unemploymentand underemployment.

It may be mistakenly thought that the over-populated countries must have an abun-dance of labour. The fact is not that, becausehaving an abundance of non-skilled work-ers may also mean having a shortage in semi-skilled or skilled workers, or in both. Surplusin some skills and shortage in others may befound to equally create a situation of imbal-ance.

By 2020, there will be a global shortageof 56.5 million skilled people and India willhave a surplus of 42 million of working age.With right actions in education, training, re-training, skills development in varied sectorsand deployment of continuous assessmentof the progress of creating an employablesurplus would benefit the nation and radi-cally change our growing economy to opti-mum levels in the future.

(The author is the founder and CEO ofOrange i, Human Resource Mentors.www.orangeimentors.com)

T

at some point can pro-

pel economic growth of

a nation, but then a

population without ‘em-

ployable skills’ could

also become a burden

on reasons of unem-

ployment.

By Sundaresh G


33


33

CMS: sprucing up for silver jubilee

H

C K V NAMBIAR

M P GOPALAKRISHNAN

By Dr S Sree Kumar

istory often records only the deeds, theoutward acts largely, but every act

springs from an ideal which is often left un-recorded. The CMS Group of Institutions isan exemption to this general attitude.In its motto—‘Challenge Meets Suc-cess’—is enshrined the radical ide-alism and inventiveness of a groupof ‘expatriate’ Malayalees ofCoimbatore, Tamil Nadu, and theircontinuous struggle to overcome thechallenges that came in their way.

The CMS Educational and Chari-table Trust, established in 1988, wasthe progeny of the Coimbatore MalayaliSamajam which represented and still repre-sents the vast majority of the Malayalees ofCoimbatore. At the initial stages, the trust hadnothing substantial to build on except a mod-erate capital and plenty of self-confidence.But it had a clear vision which saw educa-tion not only as a vehicle for progressing in amultilingual and multicultural situation but alsoas a crucial instrument for survival in theknowledge society of the future. Hence inthe very year of its inception, the trust startedCMS College of Science & Com-merce.

There was something strikinglymodern in the very name given tothe college. Instead of naming theinstitution ‘College of Arts and Sci-ence’, as was the usual practicethen, the trust named it ‘College ofScience & Commerce’. Perhaps itwas for the first time that a collegeis named ‘College of Science & Commerce’.This drastically different approach to mod-ern education was a significant pointer thatthe trust was willing to traverse roads lesstravelled by. Moreover, the trust clearly fore-saw that if our country has to progress intothe 21st century, we need science and com-merce more than anything else.

The achievements of CMS College ofScience & Commerce for the past 23 yearsstand testimony to the vigour and restlessrefashioning, which are characteristic fea-tures of the trust. From an institution that of-fered just three undergraduate (UG) courses,the college has grown into one that offers17 UG and 14 postgraduate (PG) courses. In1988, the college had fewer than 50 stu-dents in make-shift classrooms at Ganapathy,Coimbatore. By 2007 it had more than 3,500students on an expansive 36-acre campuswith state-of-the-art infrastructure atChinnavedampatti, a suburb of Coimbatore.Further, the college has become an autono-mous institution, accredited at the ‘A’ level byNAAC and with ISO 9001: 2000 certification.

To rest on laurels won may be a temp-tation for lesser souls but not for people withpassionate convictions and workaholic tem-perament. By 2007 it became apparent thatthe CMS College of Science & Commerce had

reached its peak. With students’ strengthequalling that of a university, diversificationbecame a necessity to circumvent the stag-nation that befalls many institutions of higherlearning at some time or other. It was herethat the sagacity of the Chairman of the trust,Mr M P Gopalakrishnan, and the Secretary,

Mr C K V Nambiar, came into play.Both had the foresight to considerhigher education not as a luxury butas something essential for national,social and economic development.

Mr Gopalakrishnan was born inCoimbatore as the son of ManjappaliAmbattu Padmanabhan (Mala,Kuzhur) and Muthiyal JanakikkuttyAmma (Mannarkadu, Nattukal). As

his father was an accountant in ACC ofMadukkarai, Coimbatore, Mr Gopalakrishnanhad his schooling at Mani H S S and his col-lege education at Government Arts College,Coimbatore. At the age of 23, he became theyoungest chartered accountant ofCoimbatore. Thereafter his career graph tookan upward trajectory making him not only asuccessful chartered accountant but also acorporate consultant and director of severalcompanies. Keenly interested in social and

cultural activities, he is the Vice-President of ArulmiguSiddhapudur Ayyappa Temple, amember of the Kerala Club ofCoimbatore and also an execu-tive committee member of theCoimbatore Malayali Samajam. Butthe crowning glory came his waywhen the Governor of Tamil Nadunominated him as a member tothe Syndicate of Bharathiar Uni-

versity in recognition of his service renderedto the cause of education.

In Mr Velayudhan Nambiar, popularlyknown in Coimbatore as C K V Nambiar, thetrust was lucky to get another right man inthe right place at the right time. Born as theson of Vayalot Krishnakurup and Devaki(Thalasseri, Panniyannur Amsam Desam), MrNambiar had his schooling at St Joseph HighSchool and college education at ThalasseriBrannan College. He reached Coimbatore asan assistant in LIC and chose the city as his‘Karma Bhoomi’. Over the years he had carveda niche for himself in the social and culturallife of Coimbatore. He is intimately connectedwith many social organizations ofCoimbatore. Mr Nambiar is the Vice-Presi-dent of the Coimbatore Malayali Samajam;Chairman of CMS Matriculation School,Maniakaranpalayam; Member of the Manag-ing Committee of CMS Matriculation HigherSecondary School, Coimbatore; Life Mem-ber of Sree Narayana Mission, Coimbatore,a Trustee of Sree Narayana Guru Polytech-nic College at Madukkarai and Sree NarayanaGuru College, Chavadi. He is a Life Memberof Sree Ayyappa Seva Sangam,Siddhapudur, Coimbatore, and also a mem-ber of Kerala Club and Kerala Cultural Cen-tre. During his lengthy tenure as the Secre-

tary of Coimbatore Malayali Samajam, heworked ceaselessly for the establishmentof CMS College of Science and Commerce.

The first step these two stalwarts, MrGopalakrishnan and Mr Nambiar, took to di-versify the CMS Educational & CharitableTrust was to make the CMS Institute of Man-agement Studies a stand-alone institution. Thesuccess of this venture prompted them tostart one more B-school, CMS Academy ofManagement and Technology in 2009. Again,in the same year the trust started an engi-neering college to meet the accelerating de-mand for technical education. CMS Collegeof Engineering and Technology has showntremendous progress in a short time and hasbecome a popular destination for those whoaspire for technical education. Thus with their

mobilizing spirit, undying commitment and clearvision these two indispensable and resoluteleaders of the Malayali diaspora ofCoimbatore have taken the trust success-fully to heterogeneous areas of higher edu-cation.

In another year’s time the CMS Educa-tional & Charitable Trust will be celebratingits silver jubilee of service to humanity. Timehas taken away many of the founding fa-thers of the trust. But the spirit that made thetrust what it is today lives on thanks mainlyto people like Mr Gopalakrishnan and MrNambiar.

Who else can better represent the tire-less striving and fierce conviction of ‘Chal-lenge Meets Success’?

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January 15-February 14 , 2011 PASSLINE January 15-February 14 , 2011 PASSLINE

35

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Printed and Edited by Varghese Paul for Keethara Publications Pvt Ltd. 6802, Convent Road, Kochi-35 Tel 3043572 Email:[email protected] and Printed at Ayodhya Printers Pvt Ltd., Cochin-26 Design & Layout by johnson

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