20130730 ac 002101

7/27/2019 20130730 Ac 002101

1/1

VIVEAT SUSAN PINTOMumbai, 29 July

The advertising world canthrow up strange possibilities.Just when most had thoughtthat Martin Sorrells WPPwould remain unchallenged asthe worlds numero uno adver-tising & marketing communi-cations group, came the bigsurprise foes Maurice Levy,chief executive,Publicis Groupe andhis counterpart, JohnWren of Omnicom,were joining hands.

Simply put, the sec-ond (Omnicom) andthird-ranked (Publicis)

advertising and mar-keting networks werecoming together. Asthe chief executive of aTop Ten ad agency inIndia said, In one fellswoop, Maurice andJohn have overtaken Martin.Who could have thought some-thing like this could happen?

Yet, it has. Predictably,agencies which are part of thePublicis and Omnicom groupsare elated. Arvind Sharma,chairman, India sub-conti-nent, Leo Burnett, part ofPublicis Groupe, says: We arehappy to be part of the largestcommunications combine inthe world. Its a moment to cel-ebrate.

Madhukar Kamath, man-aging director and chief exec-utive officer, DDB MudraGroup, and Josy Paul, chair-man & chief creative officer,

BBDO India, were not available

for comment. Pratap Bose,chief operating officer, DDBMudra, said it was too early tocomment about the merger.

However, as the globalpecking order of ad & market-ing networks had changed,what would WPP, specificallyits maverick promoter, Sorrell,68, do?

Not known to tolerate any-thing but the best, Sorrell is

expected to mount anoffer for theInterpublic Group(IPG). IPG, holdingcompany for agencybrands such asMcCann Worldgroup,Lowe & Partners,

DraftFCB, has been atakeover target forsome time now. And,following Publicis andOmnicom's merger,speculation that WPPwill go after IPG has

gained momentum.More so because all along it

was speculated that Levy'sPublicis would buy IPG. A yearand a half earlier, this specula-tion almost reached a crescen-do that Publicis was indeedclose to acquiring IPG globally.When questioned about this inDecember 2011, Publicis chiefoperating officer Jean-YvesNaouri, number two after Levy,who was visiting India then,had said: There is no truth toit. With Publicis now joininghands with Omnicom, personsin the know say, the field iswide open as far as IPG is con-cerned. The question is, will

the latter blink?

Another theory doing therounds is of Sorrell possiblylooking at the Paris-headquar-tered Havas Group as atakeover target before traininghis guns on IPG. Ranked num-ber sixth in the pecking orderof global networks, Havas hasalso been on the hit list of thebig three groups for long. With37 per cent of Havas equitycontrolled by French busi-nessman and corporate raiderVincent Bollore, also its chair-man, speculation has been rife

that the latter has been looking

to cash out at the opportunetime. The Frenchman did justthat last year, when he soldmedia group Aegis, part of theHavas network, to Japanesemajor Dentsu.

So, WPP might not have iteasy, with IPG refusing to blinkeasily and Dentsu as a poten-tial bidder for Havas remain-ing assets, its advertising agen-cies. The next six months arelikely to be crucial, then, forWPP because it could decidewhich way the once infallible

group could head.

> IN BRIEF

L&T wins its biggestforeign orderLarsen & Toubro on Monday won, as part of aconsortium with four other global companies, its

biggest ever civil construction order worth ~8,250crore to build a metro rail project in Riyadh, SaudiArabia. The total value of the order is around~35,000 crore. BSREPORTER >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Probe reporthits Plethico sharesPlethico Pharmaceuticals shares fell 20 per cent toa 52-week low of ~108.95 on BSE on Mondayafter media reports, which it denied, said theenforcement directorate was investigating thecompany. BSREPORTER>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Mahindra Holidays Q1 net up 11%Mahindra Holidays & Resorts Indias net profitrose 11 per cent to ~21.01 crore for the quarterended June 30, mainly on higher occupancy,from~18.96 crore in the year-ago period. Total incomealso rose to ~180.29 crore from ~157.44 crore forthe year-ago period. PTI>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Arvind Ltds standalone Q1 netupIn the first quarter ended June, Arvind Ltdsstandalone net profit grew 75 per cent at ~79 crorefrom ~45 crore in the year-ago period. BSREPORTER>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Madras Cements Q1 net fallsMadras Cements net profit fell 44 per cent to ~69crore in the first quarter ended June from ~123crore in the year-ago period. BS REPORTER>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Bharti Infratel Q1 netupTelecom tower company Bharti Infratels net profitrose 68 per cent to ~358 crore during the Junequarter from ~213 crore in the year-ago period onhigher sales from infrastructure leasing.BSREPORTER>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Every fifth vehicle dealerto see lossA study conducted by J D Power Dealer Satisfactionshows one in every five automotive dealers isexpected to make a loss, up from just nine per centin the last financial year. Only about 44 per cent areexpecting to make a profit, down from 62 per cent inthe previous year, said the study. BSREPORTER>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Ultratech Q1 netprofitdown 13%The countrys largest cement maker Ultratech onMonday registered a 13.5 per cent dip in netprofit in the first quarter at ~673 crore on lowersales and higher raw material expenses. PTI >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Colgate Palmolive Q1 net up 58%Colgate Palmolive India on Monday reported a58 per cent increase in net profit at ~185.22 crorefor the first quarter ended June 30 on a nine percent growth in volume. PTI>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Sesa Goa Q1 profit down 57%Sesa Goas consolidated net profit fell 57 percent to ~414.30 crore for the June quarter, as itsiron ore mining operations remained closeddue to ban in Goa and Karnataka. PTI .

STOCKSIN THE NEWS

* OVER PREVIOUSCLOSE

>Wipro

Q2 dollar revenues togrow 2-4% againstexpectations of 1.5-3%

415

400

385

370Jul 29Jul 22 2013

~382.80 PREVIOUSCLOSE~408.50 CLOSE

6.71% UP*

>Natco Pharma

Gets US court nod tomarket Copaxone

600

560

520

480Jul 29Jul 22 2013


20% UP*

> JKCement

Q1 net profit down 55%year-on-year at ~31 crore

220

205

190

175Jul 29Jul 22 2013


10.53% DOWN*

> Syndicate Bank

Q1 net profit up 3% year-on-year at ~452 crore

115

105

95

85Jul 29Jul 22 2013


6.39% DOWN*

> Force Motors

Q1 net profit up 38%year-on-year at~14 crore

275

260

245

230Jul 29Jul 22 2013


7.37% UP*

Omnicom-Publicis merger: What

will WPP do now?The curious case of VikashMetal & PowerDIGBIJAYMISHRAPurulia, 29 July

What once was a state-of-the-art steel plant of Vikash Metaland Power in Poradiha villagein this district of West Bengal isnow a ghost of itself. The plant,which used to employ 5,000people at one point, is guardedby policemen to prevent whatsremaining from being stolen.

A little flashback might helpunderstand what happened. Inits annual report for 2011-12, theKolkata-based steel maker said

it was a victim of robbery at thePoradiha plant. Among whatwas taken away were a factoryshed, heavy machinery used tomake steel rods and stocksworth crores of rupees.

For the year ended June 30,2012, the company clocked in arevenue of ~476 crore and a lossof ~179 crore. Over half the losswas an exception item, lossdue to robbery, according to thereport. At the moment, thecurious case of Vimal Patni,promoter of Vikash Metal, isone of the most talked aboutstories in the area.

The plant is under the juris-diction of Santuri police stationand Sekhar Mitra, officer-in-charge, extends some help tounderstand what happened.The plant was closed inOctober 2011 but the story goesback further. Since early 2011,promoters had cut down on

production. Workers were told

not to work inside the plant but

only lurk around the facility,said Mitra.According to him, some

miscreants caught stealingfrom the plant were found tobe company workers. We car-ried out raids and made somerecovery but investigationrevealed many thieves werecomforted by the promotersand were propelled by them tocarry out wrongful activities.

Locals claimed the pro-moters had lost interest in thefacility.

Interestingly, the promot-er group held nearly 59 percent in the company at theend of December 2010 butbrought it down to around 15per cent, according to theDecember 2012 quarter filing.It was the last shareholdingpattern filing by VikashMetal. Moreover, around 68per cent of the shares are

pledged with lenders.

The lead bankers for Vikash

Metal are Bank of India, UnionBank of India and IDBI Bankand they had, about a monthago, put out a possession noticeat the plant with the intent oftaking over the property soon.The notice has been kept safein the police station, said Mitra.

The promoter group con-sists of Vimal Kumar Patni, 63,and sons Vikash Patni andAkash Patni. The companycould not be reached for com-ments. We are putting out ourmen and agency sourcedguards at the plant, but itrequires fees and despite sev-eral communications made tocompany officials, they haventpaid a single penny. This clear-ly shows they do not care aboutthe plant, added Mitra.

A local resident said,There are two other plants,Mark Steel and Vision Spongein the vicinity but they are not

facing any problems.

The companys factory in Poradiha village in Purulia district of

West Bengal is guarded by policemen to prevent whats

remaining from being stolen PHOTO: SUBRATA MAJUMDER

Investor groups target

Ambuja after Holcim dealDEV CHATTERJEE & CHANDAN KISHORE KANTMumbai, 29 July

The role of the independent directorsof Ambuja Cements has come underthe scanner after a deal to buy parent

company Holcims stake in ACC has beenpanned for being anti-minority sharehold-ers by almost all investor groups and insti-tutional investors.

The transaction was unanimouslyapproved by the board, which, investorassociations say, is not in the interest ofminority shareholders of Ambuja, and theindependent directors, at the very least,should have voiced their concern and put iton record. Investors should write to theindependent directors stating their angst.Investors should file complaints with thestock exchanges and Sebi (markets regula-tor Securities and Exchange Board of India),as this will add to the complaints record,said Shriram S of Ingovern Proxy Advisory.

Investors should vote against the trans-action when it comes up for shareholderapproval through a postal ballot. Majority ofminority investors will need to approve thetransaction, with the promoter getting novote, he said. When contacted, ShaileshHaribhakti, an independent director on theboard of Ambuja Cements, said if the com-pany had to buy shares of ACC, then itwould have to pay for it. Though there were

several options before the board, this wasthe best possible deal for Ambuja," he said.Other independent directors refused tocomment on the transaction.

Onne var der Weijde, managing directorof Ambuja Cements, told BusinessStandard: There were probing questionsabout what's happening. There was a gooddialogue with them. It did not take longtime to convince them. I wanted to makesure that they really understand the trans-action and its benefits. I wanted to makesure they have the right advice and havetime to ask questions. By guiding andexplaining to them, I think it was a veryappealing business case, which i had to pres-ent. I had to convince and demonstrate to

the independent directors that this was forgood value. And, ultimately, I did it. Andthey approved the deal unanimously.

The independent directors on the boardof Ambuja Cements are: DCB BankChairman Nasser Munjee, economistOmkar Goswami, chartered accountantsRajendra Chitale and Shailesh Haribhaktiand corporate lawyer Haigreve Khaitan.

Under the scheme, Ambuja Cementswill first acquire from Holder InvestmentsMauritius Ltd a 24 per cent stake in HolcimIndia for a cash consideration of ~3,500 crorefollowed by a merger of Holcim India intoAmbuja Cements. The intra-group transac-tions will result in Ambuja Holding 50.01 percent stake in ACC.

N INDEPENDENT DIRECTORS IN SPOTLIGHTN

Indian Hotels boardviolates exchange normsSWARAJ BAGGONKAR & SAMIE MODAK

Mumbai, 29 July

The Indian Hotels Co Ltd (IHCL), the own-er of the Taj Group of Hotels, has beenunable to fill up vacant board positions,leading to a violation of the listing agree-ment clauses. The Mumbai-based com-pany, which operates in the mid-to-luxu-ry hotel space, has not found newindependent directors to fill in spots leftvacant last year due to resignations.

As a result, the total strength of theboard of IHCL has declined to 11 direc-tors from 14 last year. One of the clausesmandates companies to have independ-ent directors not less than 50 per cent ofthe total strength of the board if the chair-man is a non-executive director.

An IHCL spokesperson said: Theboard currently comprises 11 directors:four executive and seven non-executive.Five of these are independent, includingGuy Crawford who was inducted recent-ly as a non-executive, independent direc-tor as one step towards compliance. Weare in the process of appointing a sixthindependent director.

Cyrus Mistry was appointed addition-al director on the board last year, desig-nated as the non-executive chairman inplace of Ratan Tata, who retired inDecember. The independent direc-torsstrength on IHCL stands at 45 percent against 50 per cent required.Corporate governance and proxy adviso-ry firm Stakeholders Empowerment

Services (SES) stated: As on date, theboard has five independent directors, twonon-independent non-executive direc-tors and four executive directors. Thechairman of the board is a promoter non-executive director. Clause 49(I)A of thelisting agreement mandates that 50 percent of the board should be independentin case the chairman of the board is a pro-moter director. Since only 45 per centdirectors on the board are independent,the company is non-compliant with thelisting agreement. Further, the companyhas been non-compliant for more thansix months, the period typically allowedfor regaining compliance. A stockexchange can take disciplinary action,which includes suspension of tradingagainst a company that fails to meet thelisting agreement.

ONGC to produce gas fromfirst deepwater field soonKALPANAPATHAK

Mumbai, 29 July

Come August, state-run Oil and Natural

Gas Corporation (ONGC), would beginnatural gas production from its firstdeepwater field, G-1, located in theKrishna-Godavari Basin on the easterncoast. A senior ONGC official told

Business Standard: We are ready to pro-duce from ourG-1 field. By August, two gas wells willflow. Next year, we would flow oil aswell, the official said.

Initially, production would be about1.1 million standard cubic metres a day(mscmd). The gas produced would besold to GAIL India at $4.75 a millionBritish thermal unit (mBtu), while oilwill be sold at $50 a barrel, putting theassets net present value at ~1,437 crore.While oil production will peak at 1,200cubic metres a day (9,000 barrels) in the

next two years, gas will peak at 2.6mscmd. The fields life is 15 years, theofficial said. Initially, ONGC had plannedto start production from the G-1 field in

April 2006, at a cost of ~1,200 crore.But owing to delays, the project hasseen cost over-runs. Today, the projectscost today stands at ~2,735 crore. Weintegrated the development of the neigh-bouring GS-15 field in the project.GS-15 began production in August 2011and has since been producing 1,90,000cubic metres of gas a day and 9,400 bar-rels of oil a day.

Last week, ONGC had signed a mem-orandum of understanding withReliance Industries Ltd to avail of RILsoffshore and other infrastructure on theeast coast. Worldwide, the practice isto use infrastructure available in anyarea. This is what the arrangement withReliance Industries would be, the offi-cial added.

Independent directors blamed for failing to protect minority shareholders interest

With the ad world upended, speculation on response of the dethroned No 1

INDIAIMPACTPUBLICIS-OMNICOMPART-1

STOCK SLIPShare price on BSE in ~

200

190

180

170Jul 23, 2013 Jul 29

1,250

1,230

1,210

1,190

1,245.50

196.851,198.34

171.45

ACC(LHS)

AmbujaCements

(RHS)

WEAK BOARD| The independent directors' strength

on Indian Hotels' board, thechairman of which is a promoternon-executive director, stands at 45per cent for the last six months

| Companies must have independentdirectors not less than half of the totalstrength of the board in case thechairman is a promoter director

| In case of vacanices, they must befilled within six months, corporategovernance norms say

GMR Infra brings in chairmansyounger son as managing directorBS REPORTER

Bangalore, 29 July

In an out-of-turn move, theboard of GMR Infrastructurehas appointed Kiran KumarGrandhi as managing direc-tor (MD). Grandhi, theyoungest son of GMR Groupchairman G M Rao, will takeover with immediate effectfrom B V N Rao.

The decision to appointGrandhi as the MD of the~10,000-crore infrastructuredeveloper is a fallout of themove by the GMR HoldingsBoard to bring in Grandhi asthe corporate chairman ofthe board, which will givehim direct responsibilitiesover corporate strategies andfinance, and hence the roleof MD, as well.

B V N Rao, a close associ-ate of G M Rao, will be made

business chairman (urbaninfrastructure and highways)with responsibilities forhighways, EPC division, spe-cial economic zone and GMRVaralakshmi Foundation, inaddition to his currentresponsibilities for corporateaffairs, legal and procure-

ment. The highways and SEZbusiness con-tributearound fiveper cent to theGroups rev-enues.

The moveto bring in Grandhi, 38, as

the corporate chairman of

the holding board and MD ofthe GMR Infrastructurecomes at a time when thecompany is grappling withhigh leverage of 3.7 times,under a debt of close to~40,000 crore.

The company, whichmanages its flagship DelhiInternational Airport,besides a clutch of powerprojects and highways, hasbeen looking to exit some ofits assets. Grandhi, who hasbeen with GMR Group since1996, was one of the key per-sonnel to oversee GMRs flag-

ship projectand expansionof DelhiInternationalAirport,including thelandmark

Terminal-3 project.

KIRAN KUMAR GRANDHI'S ACHIEVEMENTS| Played a key role in the development

of Terminal 3 project at DelhiInternational Airport

| Instrumental in bagging twointernational projects for the group Sabiha Gokcen International Airport inIstanbul, Turkey, and Ibrahim NasirInternational Airport in Maldives

| Led the development (from bidding tocommissioning) of Indias firstprivate-public partnershipairport project in Hyderabad

No threatto UltraTechKumar Mangalam Birla, chairman of theAditya Birla Group that owns Indias largestcement firm UltraTech Cement, whileanswering shareholders questions on thedevelopment at Holcim, said: There issome internal arrangement. It will in noway be increasing the competition. LastWednesday, the Swiss giant (UltraTechsmain rival in India) tweaked its ownershipstructure in ACC and Ambuja. As a result,Holcims stake in ACC is proposed to betransferred to Ambuja. BS REPORTER

Holding c ompany Revenues ($bn )

Omnicom (Publicis) 14.223.0

WPP 15.615.6

IPG 7.07.0

Dentsu 4.24.2

Havas 2.32.3

Publicis 8.8

Source: Company/agencies

WHERE THE HOLDING COMPANIES STAND......Before the merger After the merger

Employees (2012) Revenue by geography (2012)Omnicom Publicis WPP

114,490 58,000

71,100

Americas

59%

EMEA30%

NorthAmerica48%

Europe30%

Europe25%

APCA11%

APCA13%

UK12%

Africa,Middleeast 3% *Asia-Pacific,

Africa, LatinAmerica andMiddle eastSource: Companies/agencies

LatinAmerica7%

NorthAmerica34%

*29%

Kiran Kumar Grandhi also anointed corporate chairman of GMR Holdings Board

The company isgrappling with a highleverage of 3.7 times,under a debt of close to~40,000 crore

Niyamgirivotes withinForestRights& allied ActsSAHILMAKKARNew Delhi, 29 July

Even as Vedanta Resourcesmining plans in theNiyamgiri hills hang fire, alook at the Forest Rights Actand the Panchayats(Extension to the ScheduledAreas) Act, or PESA, of 1996,show the necessity of priorrecommendation from gramsabhas or the panchayatsbefore grant of licence or

mining lease for minor min-erals in scheduled areas.This, despite the fact that

the Union or state govern-ments have the first right overnatural resources even if thesaid land was not fully inhab-ited. Similar recommenda-tions are also mandatory forthe exploration of minerals.

Under the Forest Act, thetraditional rights and tradi-tions of the local communityhave to be protected, said asenior bureaucrat fromOrissa, requesting anonymi-ty, adding, Their entire liveli-hood depends on it.

Ravikant, a SupremeCourt lawyer, said under nocircumstances could theUnion or state governmentsforcefully acquire tribal land,adding the administrationwould have to first providelivelihood to tribals and hon-

our their customary rights.

20130730 ac 002101

Documents