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Showing posts from July, 2017

The way forward on GST

IMA’s recently concluded CEO Strategy Roundtable in Goa received insightful perspectives on the Goods and Services Tax (GST) from Chandramowli Srinivasan, Finance Director of SKF and S Subramaniam, CFO of Titan. Unlike presentations with lots of charts, containing arrows and circles that are frequently hard to grapple with, our panellists shared their points of view without visual aids in the simplest possible terms. They looked at challenges ahead and how the GST story was likely to unfold. At the very basic level, GST would subsume lots of indirect taxes thereby making life simpler specifically for the manufacturing sector. However, it is still a policy in the making with new notifications from tax authorities popping up from time to time. This clearly complicates ERP systems used by companies to administer their accounting processes, with new patches being offered by service providers every few days. In a way, everybody seems to be learning on the job. The objective  The way I see it…

Post Retirement

A bigger purpose
Our identities in life, as our relationships, are usually shaped by the things we do at work. We enjoy the authority and challenge that these bring and our work becomes the primary focus of our lives. Clearly, everybody enjoys a leisurely break but a permanent one can be daunting. Retirement comes with a set of challenges that few are prepared for, often because we are so busy with the management of situations, frequently crises, at work that there is really no opportunity to plan properly for a post retirement situation. Therefore, when it happens, we are at sea about what to do.  Most commonly, senior executives look to remain involved in some sort of professional capacity such as an advisory role, independent directorship or even full time consulting. This is logical because we are ordinarily more comfortable in a corporate work environment having spent our best years there. It gives us a sense of respect and possibly purpose. Essentially, we can then claim we have…

Company Boards

Company Boards – Still Evolving In a recent piece on independent directors, we tried to caution aspirants that the risks of assuming board responsibilities remain unreasonably high and the consequent rewards trivial. However, for those brave hearts that seek new challenges and learning, this paper shares some perceptions on the functioning of boards and how individual contributions might make them a little more effective. Boards generally divide their time between compliance and strategic matters. Their role encompasses three elementary issues – to establish policy, make strategic decisions and oversee the company’s performance. Policies could include, for instance, those concerned with foreign exchange/treasury exposures, human resources and stock options or a crisis management manual. Clear policies help management to be consistent – for example the board could take a call on acceptable levels of un-hedged risks or compensation over and above statutory obligations in the event of an…

Independent Directors

Neither fame nor glory
Murray Steele, who teaches Strategy at Canfield University’s School of Management, also serves on the board of several companies as a non-executive director. Mr Steele begins his lecture to a class of aspiring independent directors with the question, “So you want to be an independent director”? Then he goes on to painstakingly explain that you must understand finance and accounting, be a strong leader, have industry knowledge, understand corporate governance, be able to sort disputes and comprehend tricky people issues. Finally, he clarifies that the risks of doing so are unreasonably high and the rewards trivial. Be that as it may, in recent times, there has been a flurry of activity amongst people pursuing board appointments and companies seeking to recruit them. One of the reasons is the Companies Act 2013, which mandates that boards should contain independent directors. Shalini Khullar, having recently undertaken a course designed to train her to act as a boar…

Credit and Growth

Credit positive Following a briefing few months ago at the CEO Forum in Bangalore a client from the construction machinery sector explained to me that, contrary to some of the data I had shared, his business simply couldn’t be better. The Government’s push on infrastructure spending such as that concerned with roads and railways was substantial and, consequently, so was demand for engineering equipment. However, this cannot take away from the fact that other industries such as real estate and housing are in dire straits. Markets, which were in any event moderating, collapsed completely following the November scrapping of currency notes. Industry specialists do not believe that a recovery will happen anytime in a hurry. In some ways therefore, the outlook for the economy and business would seem to vary depending on who is asking.
Data produced by the CSO suggests industrial output rising by around 5%, with better scores in Services at 8%. Agriculture has done unusually well at 4.7% and …