Industrial Analysis On Perfomance Of Stock Exhange

INDUSTRIAL WORKOUT

MES COLLEGE OF ENGINEERING, DEPT OF MANAGEMENT SCIENCE, KUTTIPURAM.

INDUSTRIAL ANALYSIS ON

PERFORMANCE OF STOCK EXCHANGE BY, ANJANA ASHOKAN DEEPA K MUHAMMED SADATH P CRISTI ISSAC PALMATTAM MUSTHAFA SHAHNAS ALI SHAMNAZ Fousia c

INDUSTRIAL MENTOR:- JYOTHI madam To: prof. k.m. thomas

CONTENT PERFORMANCE OF STOCK EXCHANGE

Page 1

INDUSTRIAL WORKOUT

1. INTRODUCTION 2. HISTORY OF STOCK EXCHANGE 3. STOCK MARKET ANALYSIS 4. PERFORMANCE OF STOCK EXCHANGE 5. COMPARISON AMONG VARIOUS INDUSTRIES 6. COMPARISON OF GDP AND INFLATION TOWARDS INDUSTRY 7. GOVERNMENT CONTROL OVER INDUSTRIES 8. COMPENSATION PACKAGE IN INDUSTRIES 9. TRAINING AND DEVELOPMENT IN THE INDUSTRY

PE RFO RM ANCE OF ST OCK EX CH ANG E WELCOME TO PRESENTATION- ANJANA ASHOKAN

PERFORMANCE OF STOCK EXCHANGE

Page 2

INDUSTRIAL WORKOUT INTRODUCTION & HISTORY- MUSTHAFA STOCK MARKET ANALYSIS - DEEPA AND CRISTI PERFORMANCE OF STOCK EXCHANGE AND COMPARISON AMONG FIVE INDUSTRIESMUHAMMED SADATH P COMPARISON OF GDP AND INFLATION TOWARDS INDUSTRY & GOVERNMENT CONTROL OVER INDUSTRIES- ANJANA A COMPENSATION SHAHNAZ ALI

PACKAGE

IN

INDUSTRIES-

TRAINING AND DEVELOPMENT IN THE INDUSTRYSHAMNAS

Introduction Stock exchange or bourse is a mutual organization which provides facilities for stock brokers and traders, in trading companies stocks and other securities, issue of redemption of securities & other financial tools like payment of income & dividends. the securities PERFORMANCE OF STOCK EXCHANGE

Page 3

INDUSTRIAL WORKOUT traded on a stock exchange includes share issued by companies , unit trust & other pooled investment & bonds. Usually there is a central location at least for record keeping but traders link to a physical place. electronic networks run modern market are providing great speed & cost of transportation the demand & supply in the stock market is attracted by no: of factors that affect the price of stock.

HISTORY OF STOCK EXCHANGE The working of stock exchanges in India started in 1875. BSE is the oldest stock market in India. The history of Indian stock trading starts with 318 persons taking membership in Native Share and Stock PERFORMANCE OF STOCK EXCHANGE

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INDUSTRIAL WORKOUT Brokers Association, which we now know by the name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent recognition from the Government of India. National Stock Exchange comes second to BSE in terms of popularity. BSE and NSE represent themselves as synonyms of Indian stock market. The history of Indian stock market is almost the same as the history of BSE. The 30 stock sensitive index or Sensex was first compiled in 1986. The Sensex is compiled based on the performance of the stocks of 30 financially sound benchmark companies. In 1990 the BSE crossed the 1000 mark for the first time. It crossed 2000, 3000 and 4000 figures in 1992. The reason for such huge surge in the stock market was the liberal financial policies announced by the then financial minister Dr. Man Mohan Singh. The up-beat mood of the market was suddenly lost with Harshad Mehta scam. It came to public knowledge that Mr. Mehta, also known as the big-bull of Indian stock market diverted huge funds from banks through fraudulent means. He played with 270 million shares of about 90 companies. Millions of small-scale investors became victims to the fraud as the Sensex fell flat shedding 570 points. To prevent such frauds, the Government formed The Securities and Exchange Board of India, through an Act in 1992. SEBI is the statutory body that controls and regulates the functioning of stock exchanges, brokers, sub-brokers, portfolio managers investment advisors etc. SEBI oblige several rigid measures to protect the interest of investors. Now with the inception of online trading and daily settlements the chances for a fraud is nil, says top officials of SEBI. Sensex crossed the 5000 mark in 1999 and the 6000 mark in 2000. The 7000 mark was crossed in June and the 8000 mark on September 8 in 2005. Many foreign institutional investors (FII) are investing in Indian stock markets on a very large scale. The liberal economic policies pursued by successive Governments attracted foreign institutional investors to a large scale. Experts now believe the sensex can soar past 14000 mark before 2010. The unpredictable behavior of the market gave it a tag – ‘a volatile market.’ The factors that affected the market in the past were good monsoon, Bharatiya Janatha Party’s rise to power etc. The result of a cricket match between India and Pakistan also affected the movements in Indian stock market. The National Democratic Alliance led by BJP, during 2004 public elections unsuccessfully tried to ride on the market sentiments to power. NDA was voted out of power and the sensex recorded the biggest fall in a day amidst fears that the Congress-Communist coalition would stall economic reforms. Later prime minister Man Mohan Singh’s assurance of ‘reforms with a human face’ cast off the fears and PERFORMANCE OF STOCK EXCHANGE

Page 5

INDUSTRIAL WORKOUT market reacted sharply to touch the highest ever mark of 8500. India, after United States hosts the largest number of listed companies. Global investors now ardently seek India as their preferred location for investment. Once viewed with skepticism, stock market now appeals to middle class Indians also. Many Indians working in foreign countries now divert their savings to stocks. This recent phenomenon is the result of opening up of online trading and diminished interest rates from banks. The stockbrokers based in India are opening offices in different countries mainly to cater the needs of Non Resident Indians. The time factor also works for the NRIs. They can buy or sell stock online after returning from their work places. The recent incidents that led to growing interest among Indian middle class are the initial public offers announced by Tata Consultancy Services, Maruti Udyog Limited, ONGC and big names like that. Good monsoons always raise the market sentiments. A good monsoon means improved agricultural produce and more spending capacity among rural folk. The bullish run of the stock market can be associated with a steady growth of around 6% in GDP, the growth of Indian companies to MNCs, large potential of growth in the fields of telecommunication, mass media, education, tourism and IT sectors backed by economic reforms ensure that Indian stock market continues its bull run

PERFORMANCE OF STOCK EXCHANGE

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Stock Exchanges are an organised marketplace, either corporation or mutual organisation, where members of the organisation gather to trade company stocks and other securities. The members may act either as agents for their

customers,

or

as

principals

for

their

own

accounts.

Stock exchanges also facilitate for the issue and redemption of securities and other financial instruments including the payment of income and dividends. The record keeping is central but trade is linked to such physical place because modern markets are computerised. The trade on an exchange is only by members and stock broker do have a seat on the exchange. List of Stock Exchanges In India •

Bombay Stock Exchange

•

National Stock Exchange

•

Regional Stock Exchanges

•

Ahmedabad Stock Exchange

•

Bangalore Stock Exchange

•

Bhubaneshwar Stock Exchange

•

Calcutta Stock Exchange

•

Cochin Stock Exchange

•

Coimbatore Stock Exchange

•

Delhi Stock Exchange

•

Guwahati Stock Exchange

•

Hyderabad Stock Exchange

•

Jaipur Stock Exchange

•

Ludhiana Stock Exchange

•

Madhya Pradesh Stock Exchange

•

Madras Stock Exchange

•

Magadh Stock Exchange

•

Mangalore Stock Exchange

•

Meerut Stock Exchange

•

OTC Exchange Of India

•

Pune Stock Exchange

•

Saurashtra Kutch Stock Exchange

•

Uttar Pradesh Stock Exchange

•

Vadodara Stock Exchange

ROLE OF STOCK EXCHANGE 

Raising capital for business .



Mobilizing saving for investment.



Created investment opportunities for small industries.



Govt capital – raising for development project.



Listing requirements.



Requirements by the stock exchange.

STOCK MARKET ANALYSIS Stock Market Analysis helps the investors in formulating their investing/trading techniques prior to the opening of the market. This helps them to confirm their conviction on trades. Stock Market Analysis deals with the performance of the stocks in particular and the indexes in general. Stock Market Index typically gives the overall performance of the market or of a specific sector. It is based on the statistical compilations of the prices of the representative set of stocks and reflects a composite value of its component stocks. There are many factors affecting the collective mood of the stock market. Stock Market is a dynamic one which changes with every information due to change in perception of the investors. Stock Market believes in supremacy of the market and considers that demand-supply mechanism leads to efficient price discovery. It also considers that the market discounts/considers everything and presumes every investor to be rational who invest by considering all the informations (economic and political (domestic and international) scenario, weather condition, company specific news, international relations, monetary and fiscal policies, international Stock Market behavior

and

many

more)

available

to

him.

Stock Market Analysis is a prerequisite for any investor for extracting profit out of the sock market. But most of the investors don't have the time and knowledge for analyzing the market. So, they take the help of professional Stock Market Analysts who guide them through the financial jungle to a profitable outcome. Stock Market Analysis is basically of two types :• Fundamental Analysis • Technical Analysis Fundamental Analysis: Fundamental Analysis tries to measure the intrinsic value of a stock by going through its financial, economic, quantitative and qualitative factors. It also considers the macroeconomic factors (both

domestic and international) that could have an effect on the value of the stock . Some of the company or industry specific factors are Sales figure of the company (Quarterly, Yearly, etc.), Earnings of the Company, Assets and Liabilities of the Company, Management Efficiency of the Company, Company's competitive position among its industry rivals. Fundamental Analyst s rely on the balance sheets of the company for arriving at its book value. This helps them to compare the actual value of the stock in the secondary market with that of the book value in order to evaluate whether the stock is overvalued or not. When the Market Value of a stock exceeds its Face or Intrinsic value then it signifies that the expectations of the investors are higher than the real value of the company. Hence, a correction in its price is evident. Fundamental Analysis studies the fundamental strength of the company which is effective in gauging the long run scenario of the stock price rather than the short run fluctuations. Fundamental Analyst look at the following aspects for judging the fundamental strength of the company :• Balance Sheet • Return on Assets • Net Income • Revenue • Cash Flow Balance Sheet Financial position of a company is reflected through its Balance Sheet where the detailed numerical of the assets and liabilities are recorded. It is always desirable for a company to have Assets > Liabilities which reflects its sound financial condition. Return on Assets It measures the profitability of a company. Return on Assets = (Net Income of the company for the last 1 year) / (Total Asset of the Company) This shows the company's strength from the long term perspective and is a good indicator for the long term investors. Net Income Net Income =(Total Revenue of the Company) – (Total Cost to the Company)

Revenue of a company comprises of income from the sales of its products, and other incomes. Cost of a company comprises operation costs, servicing of depreciation, interest payments, etc. Another business and economic jargon for Net Income is Bottom Line. Revenue Revenue of a company comprises its income from sales of its products, and other associated incomes. It indicates the demand scenario of the company's products which are also an indicator of its growth. Cash Flow Cash Flow of a Company (for a particular period of time) = (Cash Receipts of a Company) – (Cash Payments of the Company) Liquidity Position of the company can be gauged by analyzing this tool. Hence, Fundamental Analysis is a part of the Stock Market Analysis which uses the fundamental aspects of the companies and the economy for predicting the future direction of the stock in particular and the economy in general.

Technical Analysis Technical Analysis assumes that the historical price movements of stock s give indications about its future performances. It uses charts and other statistical tools to identify the pattern of the stock and index movements and accordingly predict its future activities. Technical Analyst s are not concerned about the intrinsic or fair value of the company but are only interested in the historical price movements along with the volumes. They consider that the price movements are repetitive in nature because the psychological setup of the investors are seen to follow a certain pattern. Technical Analyst s analyze a wide array of variables such as Long term and Short term market trend, Volume of trade, Oscillators, Moving Averages, Crossovers, Candlesticks, Relative Strength Index , etc. which could throw an idea about the future movement of the Stock . Thus, Stock Market Analysis helps both the investors and the traders in taking calculative risk for churning out money out of the Stock Market . Technical Analysis of Indian stock market BSE Sensex Index

The BSE SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. First compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The base year of SENSEX is 1978-79 and the base value is 100. The index is widely reported in both domestic and international markets through print as well as electronic media. Technical Analysis of Indian stock market BSE Sensex Index The Index was initially calculated based on the "Full Market Capitalization" methodology but was shifted to the free-float methodology with effect from September 1, 2003. The "Free-float Market Capitalization" methodology of index construction is regarded as an industry best practice globally. All major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the Free-float methodology.Due to is wide acceptance amongst the Indian investors; SENSEX is regarded to be the pulse of the Indian stock market. As the oldest index in the country, it provides the time series data over a fairly long period of time . Small wonder, the SENSEX has over the years become one of the most prominent brands in the country.

COMPARISON OF 5 SECTORS IN INDIAN STOCK MARKET SOFTWARE SECTOR

Fig-1

CEMENT SECTOR

Fig 2 PHARMA SECTOR

Fig 3

TEXTILE SECTOR

Fig 4 TELECOMMUNICATION SECTOR

Fig 5

PERFORMANCE

OF

BSE-SENSEX

ON

OCTOBER,

NOVEMBER

&

DECEMBER PERFORMANCE DURING THE MONTH OF OCTOBER Key benchmark indices bounced back, closely mirroring their global counterparts, which rallied after central banks across the globe cut interest rate to tackle financial crisis. The market sentiment also got a boost after India's inflation rate fell below 11% for the first time since May 2008. The BSE 30-share Sensex rose 1,086.99 points or 12.49% to 9,788.06 in the week ended Friday, 31 October 2008. The BSE Mid-Cap index rose 104.34 points or 3.37% to 3,200.02 and the BSE Small-Cap index rose 103.28 points or 2.82% to 3,765.11. Both the indices underperformed the Sensex. October 2008 was a very bad month for stock market investors, as the BSE 30-share Sensex declined 3,072.37 points, or 23.89%, to 9,788.06 in the month. The barometer index is down 10498.93 points or 51.75% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11418.71 points or 53.84% below its all-time high of 21,206.77 struck on 10 January 2008. The BSE 30-share Sensex declined 191.51 points, or 2.2%, to close at 8,509.56, after slumping 1,003.68 points to 7,697.39 in afternoon trade, its lowest since 28 October 2005. Firm global markets and relaxation of creeping acquisition norms for promoters boosted the battered bourses on the special one-hour Muhurat trading session that was held on Tuesday, 28 October 2008. The BSE 30-share Sensex rose 498.52 points, or 5.85%, to 9,008.08.

Expiry of the near month October 2008 derivatives contracts caused high volatility on Wednesday, 29 October 2008. Gains in some Asian and European markets supported domestic bourses. The BSE 30-share Sensex gained 36.43 points or 0.4% to 9.044.51. Ending one of the worst months in history, the market surged on Friday, 31 October 2008, as it caught up rally in global stocks on Thursday, 30 October 2008, triggered by a steep 50 basis points rate cut by the US Federal Reserve. The BSE 30-share Sensex gained 743.55 points or 8.22% to 9,788.06. India’s largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) jumped 34.98% to Rs 1370.75 in the week. Bharti Airtel, India’s largest telecom services provider by market share, rose 21.43% to Rs 649. Net profit declined 0.9% decline in to Rs 1604.78 crore on a 36.5% increase in sales to Rs 8274.37 crore in Q2 September 2008 over Q2 September 2007. India’s largest state-run bank by net profit State Bank of India (SBI) fell 4.05% Rs 1109.50 after muted growth in consolidated net profit in Q2 September 2008. SBI reported a 10.60% rise in consolidated net profit to Rs 2378.19 crore on a 26.4% increase in consolidated total income to Rs 27083.47 crore in Q2 September 2008 over Q2 September 2007. The consolidated earnings include numbers of recently acquired State Bank of Saurashtra. ICICI Bank, India's second largest private sector lender by market capitalizations, soared 28.82% to Rs 399.35. Net profit rose 1.2% to Rs 1014.21 crore and operating income 1.3% to Rs 9712.31 crore in Q2 September 2008 over Q2 September 2007. Suzlon Energy, the world's fifth largest wind turbine maker by sales, fell 5.93% to Rs 44.45. The company suspended a Rs 1,800 crore rights issue plan because of the stock-market slide. . Foreign institutional investors (FIIs) have been pulling out their investments from India and other emerging markets to shore up resources to beat the global liquidity crunch. In India, FII were net

sellers of Rs 14272.40 crore in October 2008 so far (till 28 October 2008). FIIs have sold Indian shares amounting to Rs 51064.10 crore in calendar 2008. On the other hand, mutual funds have been buying. Their net inflow in October 2008 totaled Rs 848.20 crore (till 28 October 2008). Derivative contracts for October 2008 series expired on Wednesday, 29 October 2008, with rollovers more or less similar to previous series. Inflation, based on the wholesale price index (WPI), slipped to 10.68% in the week ended 18th October 2008, from 11.07% in the previous week.

PERFOMANCE DURING THE MONTH OF NOVEMBER Weakness in European stocks and lower US index futures pulled the market sharply lower in what was a volatile trading session. The BSE Sensex declined 511.11 points or 4.81% %, with index heavyweight Reliance Industries (RIL) plunging close to 13% on brokerage downgrade. The S&P CNX Nifty fell below the psychological 3,000 mark. Realty, banking and metal stocks dropped on profit taking after recent strong gains. Asian markets, which opened before the Indian market, surged boosted end of the uncertainty about who will lead the US economy in the midst of great financial peril. Key benchmark indices in China, Japan, Singapore, Hong Kong, and South Korea were up by between 1.76% to 4.46%. But the Taiwan Weighted fell 0.29%. The BSE 30-share Sensex plunged 511.11 points or 4.81% to 10,120.01. The Sensex surged 314.29 points at day’s high of 10,945.41 in early trade. The index slumped 579.60 points at the day's low of 10,051.52 in late trade. The market snapped gains of the last five trading sessions. From a low of 8,509.56 on 27 October 2008, the BSE Sensex had risen 2,121.56 points or 24.93% to 10,631.12 on 4 November 2008. But there has been a massive erosion in investors' wealth this year. The barometer index BSE Sensex is

down 10,166.98 points or 50.15% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,086.76 points or 52.27% below its all-time high of 21,206.77 struck on 10 January 2008. BSE clocked a turnover of Rs 4,973 crore today as compared to a turnover of Rs 4,431.22 on 4 November 2008. The BSE Mid-Cap index was down 1.5% at 3,394.61 and the BSE Small-Cap index was down 1.74% at 3,964.78. Both the indices outperformed the Sensex. The BSE Oil & Gas index (down 9.44% to 6,112.11), the BSE Metal index (down 6.88% to 5,451.74), the BSE Realty index (down 5.64% to 2,267) underperformed the Sensex. The BSE Capital Goods index (down 4.42% to 7,591.64), the BSE PSU index (down 2.82% to 4,935.52), the BSE Teck index (down 2.64% to 2,142.67), the BSE Power index (down 2.5% to 1,736.92), the BSE Auto index (down 2.28% to 2,727,82), the BSE Bankex (down 1.87% to 5,633.94), BSE FMCG index (down 1.72% to 1,927.53), the BSE Consumer Durables index (down 0.82% to 2,108.29), the BSE IT index (down 0.57% to 2,734.35), the BSE HealthCare index (up 1.18% to 2,913.22), outperformed the Sensex. The market breadth turned weak in late trade in contrast to a strong breadth earlier in the day. On BSE, 1,000 shares advanced as compared to 1,565 that declined. 73 shares remained unchanged. India’s largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) slumped 12.76% to Rs 1,269.45 after ABN Amro recommended a 'sell' on the stock and cut its target price by whopping 38% to Rs 1,150 from Rs 1,850 earlier. The scrip was the biggest loser from the Sensex pack. Telecom stocks fell on concerns that a government move to charge more for radio spectrum may impact their earnings. India’s largest telecom services provider by sales Bharti Airtel fell 4.54%.

India's second largest telecom services provider by sales, Reliance Communication slipped 9.5% after Morgan Stanley cut price estimate on the stock by 45% to Rs 280. As per reports, the government plans to increase fees telecom firms pay for using additional spectrum by up to 2% of the firms' revenue, and would also levy a one-time charge for granting additional spectrum. Metal stocks declined after recent sharp fall in metal prices on global recession worries. Hindalco Industries, Hiindustan Zinc, Sterlite Industries, Steel Authority of India fell by between 2.75% to 12.76%. Tata Steel, the world's sixth largest steel maker, was down 10.05% after ArcelorMittal on reported quarterly operating profit and sales below expectations. India's fourth largest IT exporter by sales Wipro rose 2.72% as ADR jumped 5.25%. India's second largest IT exporter by sales Infosys fell 0.91%, even as ADR rose 4.84%. India's largest IT exporter by sales Tata Consultancy Services slipped 0.5% off day’s high of Rs 548.90. The rupee strengthened 0.5% to 47.46/50 per dollar. A strong rupee affects the IT companies as they earn most of their revenues in dollar terms. Bank stocks fell following reports private sector banks are expected to cut their lending and deposit rates in the next 15 days and will support credit lines to finance companies and mutual funds. India’s largest commercial bank State Bank of India was down 3.59% after its chairman O P Bhatt said on 4 November 2008 the bank was likely to cut interest rates by up to 50 basis points. Bank of India gained 0.04% on reports it has cut its prime lending rate by 75 basis points to 13.25% with effect from Thursday, 6 November 2008. But Indian Bank fell 3,12% after early gains after the bank said yesterday it will consider cutting its lending and deposit rates by 50-75 basis points this week.

State Bank of Bikaner & Jaipur was flat at Rs 2651.70 after it cut its benchmark prime lending rate to 13.25% from 14%, effective 5 November 2008. State Bank of Travancore rose 5% after bank fixed 20 December 2008 as the record date for 10 for 1 stock split. India’s largest private sector bank by net profit ICICI Bank fell 1.62% even as the American depository receipt (ADR) spurted 7.28% overnight. India’s second largest private sector bank by net profit HDFC Bank slipped 1.46%, even as ADR jumped 7.63% on Tuesday. India’s largest home loan lender by operating income HDFC fell 8.63%. As per recent reports, public sector banks are likely to cut deposit and lending rates by 50 to 75 basis points within one week. The Reserve Bank of India (RBI) on Saturday, 1 November 2008, unexpectedly cut its main short-term lending rate viz. the repo rate to ease a growing cash squeeze, spur faltering economic growth and fend off damage from the global financial crisis. Most realty stocks plunged in late trade from their gains earlier in the day despite hopes lower interest rates will spur demand for residential properties. Realty majors, Unitech, Anant Raj Industries, Parsvnath Developers, DLF slipped by between 2.6% to 11.59%. Indiabulls Real Estate rose 5.15%. IVRCL Infrastructures & Projects rose 0.33%, extending gains for the fourth session in a row, on strong Q2 results and healthy order book. GMR Infrastructure spurted 4.26% on reports the company is set to buy a coal mine in Indonesia Gammon India surged 6.76% extending gains for the fourth day in a row, on bargain hunting after a recent sharp fall caused by poor quarterly performance.

Healthcare stocks were mixed following reports the drug regulator National Pharmaceutical Pricing Authority has issued notices to Cipla, Ranbaxy Laboratories and Piramal Healthcare among others for overcharging. Cipla, Glenmark Pharmaceuticals, and Ranbaxy Laboratories fell between 0.38% to 2.06%. Dr. Redddy’s Laboratories, Piramal Healthcare rose between 0.04% to 1.18%. The drug regulator has asked these firms to deposit Rs 1630 crore with the government exchequer besides explaining the hike. Auto stocks were mixed on reports the government may cut petrol and diesel prices to drum up support with voters ahead of key state elections later this month. Maruti Suzuki India and Hero Honda Motors rose by between 0.08% to 1.41%. Mahindra & Mahindra and Tata Motors fell by between 6.07% to 6.53%. Ashok Leyland was fell 8.96% on reports of plans to reduce monthly production target for November 2008 to 1,500 units from the average 6,800 units it clocked each month in the first six months of this fiscal. Meanwhile, Crude oil fell in New York as investors judged yesterday's 10 percent gain excessive, and on forecasts that a government report will show U.S. crude inventories swelling as demand ebbs. Crude oil for December delivery declined as much as $3.47, or 4.9 %, to $67.06 a barrel on the New York Mercantile Exchange. Airlines stocks declined on reports of Kingfisher Airlines defaulting on payment of lease rentals on aircrafts. Kingfisher Airlines tumbled 16.57%. SpiceJet and Jet Airways fell by between 4.49% to 6.39%. The government had recently scrapped customs duty on jet fuel. Shri Dinesh Mills was locked 10% upper limit at Rs 795.95 at 11:36 IST on BSE, on setting record date for 10-for-1 stock split.

GVK Power & Infrastructure clocked the highest volume of 3.69 crore shares on BSE. Suzlon Energy (3.46 crore shares), Reliance Natural resources (1.76 crore shares), IFCI (1.29 crore shares) and Reliance Petroleum (1.19 crore shares) were the other volume toppers in that order.

PERFORMANCE DURING THE MONTH OF DECEMBER Selling pressure in index heavyweights in the second half of the day's trade pulled the market lower. The 30-share main BSE index provisionally closed down 82.21 points or 0.85%, shedding 191.95 points from the day's high. Volatility was the hallmark of the day's trading session with indices swinging wildly throughout the day. The market shed more than half its value in 2008, its worst performance ever, and the outlook remained downbeat in the near term on dismal corporate earnings outlook. Volatility was high. After a firm start triggered by positive cues from the global markets, the Sensex soon slipped into the red. The market soon bounced back. It, however, pared gains soon before recovering again later in volatile trade. Fall in index heavyweight Reliance Industries (RIL) pulled the market into the red in afternoon trade. It later gained positive zone. The market weakened in mid-afternoon trade on fall in banking shares and further decline in RIL. The BSE Sensex had gained 387.24 points or 4.15% in previous two trading sessions on hopes of rate cuts and second stimulus package from the government. But hopes for hefty rate cuts were dented after a television channel quoted finance ministry officials as saying rate reductions may not be steep. The television channel also cited unnamed bankers as saying they were not in a position to cut deposit rates due to competition from the government's small savings plans. This meant they can not lower lending rates as well.

As part of the stimulus package, the government cut excise duty by 4% across the board, except on petroleum products, and announced raising of the public expenditure by Rs 20,000 crore to boost demand. The BSE 30-share Sensex lost 82.21 points, or 0.85%, to 9633.95, as per provisional closing. At the day's high of 9,825.90, the Sensex rose 109.74 points in early trade. The Sensex declined 128.24 points at the day's low of 9,578.92 in mid-afternoon trade. The market breadth, indicating the overall health of the market, was strong on BSE with 1488 shares advancing as compared with 967 that declined. 103 shares remained unchanged. The total turnover on the BSE amounted to Rs 3733 crore as compared to Rs 2711 crore by 14:30 IST on BSE. Among the 30-member Sensex pack, 21 declined while the rest advanced. Ranbaxy (up 3.29%), Tata Power (up 1.05%), and Hindalco (up 2.07%), edged higher from the Sensex pack. Grasim (down 1.43%), Jaiprakash Associates (down 1.07%), and Bhel (down 1.02%), edged lower from the Sensex pack. India's fourth largest IT exporter by sales Satyam Computer Services jumped 8.03% to Rs 173.50, extending gains for the fourth day in a row, on reports the world's largest personal-computer maker Hewlett-Packard Company is evaluating the possibility of acquiring a stake in the company. It was the top gainer from the Sensex pack. The counter saw high volumes of 2.71 crore shares. The stock had jumped 18.52% in the preceding two trading sessions on speculation of a change in management. However other IT pivotals declined on a firm rupee. India's second largest IT exporter by sales Infosys fell 0.89% to Rs 1115. India's fourth largest IT exporter by sales Wipro lost 1.04% to Rs 233. India's largest IT exporter by sales Tata Consultancy Services slipped 1.10% to Rs 477.

Rupee firmed against the dollar tracking rise in some Asian markets and due to some month-end dollar demand from importers and oil refiners. The partially convertible rupee was at 48.42/43 per dollar compared with Tuesday's close of 48.47. A firm rupee negatively impacts operating margins of IT firms as IT firms derive a lion's share from exports to the US. India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) shed 1.82% to Rs 1226.20, after global rating agency Standard & Poor's revised its rating outlook on the company to negative from stable, citing its increased debt and pressure on profitability. The stock moved in a volatile range of Rs 1217.05 and Rs 1265 in the day. Banking shares declined as hopes for hefty rate cuts by the central bank were dented after a television channel quoted finance ministry officials as saying rate reductions may not be steep India's largest mortgage lender by total income HDFC lost 2.91% to Rs 1485 and was the top loser from the Sensex pack. India's largest private sector bank by net profit ICICI Bank lost 2.46% to Rs 446.80. The bank said during trading hours today, 31 December 2008, it had bought back and extinguished overseas bonds worth $84.58 million. The bonds which it has bought back include 6.625% bonds totaling $79.58 million, and another $5 million worth of 5.75% bonds issued by an overseas branch. India's second largest private sector bank by net profit HDFC Bank fell 2.57% to Rs 992. India's biggest bank in terms of total assets and branch network, State Bank of India, slipped 0.10% to Rs 1287.75. India's top copper producer by sales Sterlite Industries fell 1.77% to Rs 260.35 after its American depository receipt slipped 1.12% overnight on the New York Stock Exchange. India's second largest cellular services provider by sales Reliance Communications (RCom) retraced from day's high of Rs 237.90 to close 0.35% lower at Rs 227.30, on profit taking. The stock had risen 7.16% yesterday, 30 December 2008, after company announced the rollout of

GSM-based cellular services, which will be available in 11,000 towns countrywide from Wednesday, 31 December 2008. The company made the announcement during trading hours on Tuesday. GSM services would be available in 24,000 towns within a few months, RCom said positioning it to better take on market leader Bharti Airtel, India's largest cellular services provider by sales. Bharti shares fell 1.23% to Rs 713.50 Realty shares slipped as hopes of a sharp interest rate cut suffered a blow. DLF (down 1.51% to Rs 281), Housing Development & Infrastructure (down 3.60% to Rs 129.90), and Indiabulls Real Estate (down 0.76% to Rs 130.70), slipped. India's largest oil exploration firm by market capitalisation ONGC fell 0.45% to Rs 668 after it acquired control over Imperial Energy with nearly 97% shareholders tendering shares in the open offer. ONGC's acquisition of Imperial pegged at 1.3 billion pounds ($1.9 billion) is seen expensive given the sharp fall in oil prices. Oil prices are now hovering at $40 a barrel as compared to $147 per barrel in July 2008 when ONGC decided to acquire Imperial, a Russia focussed oil exploration firm. Auto shares extended yesterday's, 30 December 2008 gains, on reports the government is likely to remove an additional excise duty of Rs 10,000-20,000 on large cars and sports-utility vehicles as part of the package for the automobile industry which is facing downturn in sales for want of cheap retail credit. India's biggest commercial vehicles maker by sales Tata Motors rose 0.47% to Rs 156.85. India's biggest small car maker by sales Maruti Suzuki India gained 0.25% to Rs 518.90. India's top utility vehicles maker by market share Mahindra & Mahindra advanced 1.87% to Rs 275.50. Oil slid below $39 a barrel on Wednesday, 31 December 2008, closing out its worst year ever after falling 60 percent, with a rapid reversal in the economic outlook having brought it crashing back from a mid-year record high. US crude was down 74 cents to $38.29 a barrel. Fresh sets of dismal data from the United States on Tuesday, 30 December 2008, added pessimism that oil demand in 2009 will suffer further, countering any support from Middle East tensions and hopes for another Saudi output cut.

COMPARISON AMONG FIVE INDUSTRIES AMONG

THE

DIFFERENT

INDUSTRIES

IE

TELECOMMUNICATION,

CEMENT,

PHARMACUETICALS, IT, TEXTILES BALANCE CARRIED TO BALANCE SHEET IS TAKEN.

THE FOLLOWING TABLE SHOWS THE REVENUE EARNED BY EACH

COMPANY, PROFIT BEFORE TAX, TAX PAID, PROFIT AFTER TAX, APPROPRIATION AND BALANCE CARRIED TO BALANCE SHEET.

COMPANY

REVENUE

CEMENT INDUSTRY INDIACEMENTS LTD(IN

PROFIT BEFORE

TAX

PROFIT AFTER

72.87

1598.12

1458.24

2854.16

438.92

2064.89

424.59

3757.29

6590.59

1294.87

4919.99

1634

244

1390

9293

572

8624

1972.86

349.3

40.73

308.57

1213.2

57.96

1124.28

5179

3632

545

3076

6.6

3069.4

35016.6

15993.9

1287.13

15509.1

26120.3

2547.2

2055.94

3668.79

807.98

139.95

668.03

972.23

181.88

390.35

RANBAXY

47783.22

7744.06

1566.86

6177.2

6673.25

3703.56

2162.69

ORCHID CHEMICALS

91447.76

11059.18

1396

9663.18

141822.36

3440.28

4010.17

GRASIM

8943.66

1826.98

472.62

1354.36

196.65

1158.32

VARDHMAN

2327.54

168.97

46.43

122.54

1141.4

57.77

1083.63

WELSPUN TEXTILES

26827.55

2191.08

765.22

1425.86

3050.62

167.49

2738.13

ALOK INDUSTRIES

1861.98

232.31

68.56

164.86

294.54

28.75

216.18

ARVIND MILLS LTD

1861.16

27.71

14.05

119.56

440.73

3.14

425

11761.91

2420.85

119.6

2294.9

48950411

2408.85 4257176

2414.5

185195992

12 628864

6

53299.33 67337.45

6316.49 11168.61

8 3587.94 1120.32

IT INDUSTRY TATA CONSULTANCY SERVICES INFOSYS GEOMETRIC SOFTWARE SOLUTIONS

44156.73

5635.7

1507.01

516.11

1007.61

7135.97

1478.87

20.63

15156.52

4170.68

5066

E SHEET

1782.77

CEMENTS(IN CRS) ACC LTD(IN CRS)

2459.2

BALANC

4394.72

TECH

84885.75

DIVIDEND

65588.61

LACS) ULTRA

309829.33

APPROPRIATION

PHARMACUETICALS AUROBINDO SUN PHARMACUETICALS CIPLA

TEXTILES

TELECOMMUNICATION RELIANCE COMMUNICATION BHARTI AIRTEL MTNL IDEA

10443

42571766 5868.91 38573.5

2948.27

2920.64 38573.5

10000 9000 8000 7000 6000

Series1 Series2 Series3

5000 4000 3000 2000

O N

S

AT I

C

O M M

UN

IC

TE XT

IL E

S ET IC AL

M CU

DU IN IT

PH AR

TE LE

C

EM

EN

TS

IN

DU

ST R

ST R

Y

Y

1000 0

Fig 6

INFERENCE:FROM THE TABLE IT SHOW THAT WE CAN SEE THAT THE STEADY GROWTH IN IT SECTOR AND TELECOMMUNICATION.

IT CAN BE FURTHER SHOWN IN LINE DIAGRAM IN FOLLOWING FIGURE

16000 14000 12000 10000

Series3

8000

Series2

6000

Series1

4000 2000

N N

IC

AT IO

TI LE S TE L

PH

EC O

AR

M

M U

U M C

TE X

AL S ET IC

DU IN IT

C

EM EN

TS

IN

DU

ST R

ST R

Y

Y

0

Fig 7

Role of Pharmaceutical Industry in India GDP

The Role of Pharmaceutical Industry in India GDP is immense. For the past few years the Indian Pharmaceutical Industry is performing very well. The varied functions such as contract research and manufacturing, clinical research, research and development pertaining to vaccines are the strengths of the Pharma Industry in India. Multinational pharmaceutical corporations outsource these activities and help the growth of the sector. The Indian Pharmaceutical Industry has a bright future.

Role of Pharmaceutical Industry in India GDP-Facts •

The Pharmaceutical Industry in India is one of the largest in the world

•

It ranks 4th in the world, pertaining to the volume of sales

•

The estimated worth of the Indian Pharmaceutical Industry is US$ 6 billion

•

The growth rate of the industry is 13% per year

•

Almost most 70% of the domestic demand for bulk drugs is catered by the Indian Pharma

Industry •

The Pharma Industry in India produces around 20% to 24% of the global generic drugs

•

The Indian Pharmaceutical Industry is one of the biggest producers of the active

pharmaceutical ingredients (API) in the international arena •

The Indian Pharma sector leads the science-based industries in the country

•

The pharmaceutical sector has the capacity and technology pertaining to complex drug

manufacturing •

Around 40% of the total pharmaceutical produce is exported

•

55% of the total exports constitute of formulations and the other 45% comprises of bulk

drugs

•

The Indian Pharma Industry includes small scaled, medium scaled, large scaled players,

which totals nearly 300 different companies •

There are several other small units operating in the domestic sector

Pharmaceutical Industry in India-Growth •

As per the present growth rate, the Indian Pharma Industry is expected to be a US$ 20

billion industry by the year 2015 •

The Indian Pharmaceutical sector is also expected to be among the top ten Pharma based

markets in the world in the next ten years •

The national Pharma market would experience the rise in the sales of the patent drugs

•

The sales of the Indian Pharma Industry would worth US$ 43 billion within the next

decade •

With the increase in the medical infrastructure, the health services would be transformed

and it would help the growth of the Pharma industry further •

With the large concentration of multi national pharmaceutical companies in India, it

becomes easier to attract foreign direct investments •

The Pharma industry in India is one of the major foreign direct investments encouraging

sectors Role of Pharmaceutical Industry in India GDP-CRAMS •

The Indian Pharmaceutical Industry is one of fastest emerging international center for

contract research and manufacturing services or CRAMS •

The main factors for the growth of the CRAMS is due to the international standard quality

and low cost •

The estimated value of the CRAMS market in 2006 was US$ 895 million

•

Indian already has the biggest number of US Food and Drug Administration (USFDA)

•

standardized manufacturing units outside the territory of United States

•

Around 50 more new manufacturing units are to be set up in accordance to the USFDA and

UK Medicines and Healthcare Regulatory Agency (MHRA) standards • world

With all these development India is posed to become the biggest producer of drugs in the

•

Some of the major domestic players in this sector are Paras Pharma, Bal Pharma, Unijules

Life Sciences, Flamingo Pharma, Venus Remedies, Surya Organics and Chemicals, Centaur Pharma, Kemwell, Coral Labs •

The contract manufacturing market in India pertaining to the multinational companies is

expected to worth US$ 900 million by the year 2010

Role of Pharmaceutical Industry in India GD-India Advantage •

India has the advantage of the cost, as the cost of labor, the cost of inventory is much lower

than other places •

The multinational companies, investing in research and development in India may save

upto 30% to 50% of the expenses incurred •

The cost of hiring a research chemist in the US is five times higher than its Indian

counterpart •

The manufacturing cost of pharmaceutical products in India is nearly half of the cost

incurred in US •

The cost of performing clinical trials in India is one tenth of the cost incurred in US

•

The cost of performing research in India is one eighth of the cost incurred in US.

Role of Cement Industry in India GDP The Role of Cement Industry in India GDP is significant in the economic development of the country. The cement industry in India is one of the oldest sectors in India. The industry is driven by the immense growth in the housing sector, the infrastructure development, and construction of transportation systems. Role of Cement Industry in India GDP-Facts •

The Indian cement industry is one of the booming sectors of the Indian economy

•

The infrastructure development of the country in the recent years is the demand driver for

the cement industry •

The Indian Cement Industry is experiencing the entry of many foreign players in the

Indian market •

The average monthly capacity utilization during the year 2006-07 was 94%

•

The cement dispatches in the year 2006-07 was 155 million tonnes

•

The growth of the cement sector pertaining to the total output was 10% in 2006-07

Role of Cement Industry in India GDP-Production •

India ranks second in the production of cement in the world

•

The growth rate of the production of cement during the year 2006-07 was 9.1%

•

The export of the cement in the year 2006-07 was 9.3 million tonnes

•

The cement industry in India constitutes of 365 small cement manufacturing units and 130

large cement manufacturing units •

The total installed capability of the cement manufacturing is 165 million tonnes per year

•

The large manufacturing units accounts for 94% of the total output of cement

Role of Cement Industry in India GDP-Mergers and Acquisitions •

Heidelberg Cement-Indorama Cement Ltd

?

Heidelberg Cement Company entered into an agreement for a 50% joint venture with the

Indorama Cement Ltd, situated in Mumbai, originally possessed by the Indorama S P Lohia Group. ?

Heidelberg Cement Company has two manufacturing units in India

•

Italcementi cement-Zuari Cement Limited

?

Italcementi cement company has acquired share of the famous Indian cement

manufacturer, the Zuari Cement Limited ?

The acquisition was of 50% shareholding and the deal was of about 100 million

?

It took over the plant of the Zuari Cement Limited in Andhra Pradesh

•

Holcim Cement-Gujarat Ambuja Cements (GACL)

?

Holcim Cement signed an agreement of 14.8% take over with the Gujarat Ambuja

Cements (GACL). ?

Holcim Cement Company is among the leading cement manufacturing and supplying

companies in the world. •

Lafarge India

?

Lafarge India is the subsidiary of the Lafarge Cement Company of France.

?

It was established in 1999 with the acquisition of the Tisco and the Raymond cement plants

?

Lafarge Cement presently has three cement manufacturing units in India one of them is in

Jharkhand and two other in Chhattisgarh

Role of Textile Industry in India GDP

Role of Textile Industry in India GDP has been quite beneficial in the economic life of the country. The worldwide trade of textiles and clothing has boosted up the GDP of India to a great extent as this sector has brought in a huge amount of revenue in the country. In the past one year, there has been a massive upsurge in the textile industry of India. The industry size has expanded from USD 37 billion in 2004-05 to USD 49 billion in 2006-07. During this era, the local market witnessed a growth of USD 7 billion, that is, from USD 23 billion to USD 30 billion. The export market increased from USD 14 billion to USD 19 billion in the same period.

The textile industry is one of the leading sectors in the Indian economy as it contributes nearly 14 percent to the total industrial production. The textile industry in India is claimed to be the biggest revenue earners in terms of foreign exchange among all other industrial sectors in India. This industry provides direct employment to around 35 million people, which has made it one of the most advantageous industrial sectors in the country.

Some of the important benefits offered by the Indian textile industry are as follows: •

India covers 61 percent of the international textile market

•

India covers 22 percent of the global market

•

India is known to be the third largest manufacturer of cotton across the globe

•

India claims to be the second largest manufacturer as well as provider of cotton yarn and

textiles in the world •

India holds around 25 percent share in the cotton yarn industry across the globe

•

India contributes to around 12 percent of the world's production of cotton yarn and textiles

The Role of Textile Industry in India GDP had been undergoing a moderate increase till the year 2004 to 2005. But ever since, 2005-06, Indian textiles industry has been witnessing a robust growth and reached almost USD 17 billion during the same period from USD 14 billion in 2004-05. At present, Indian textile industry holds 3.5 to 4 percent share in the total textile production across the globe and 3 percent share in the export production of clothing. The growth in textile production is predicted to touch USD 19.62 billion during 2006-07. USA is known to be the largest purchaser of Indian textiles. Following are the statistics calculated as per the contribution of the sectors in Textile industry in India GDP: •

India holds 22 percent share in the textile market in Europe and 43 percent share in the

apparel market of the country. USA holds 10 percent and 32.6 percent shares in Indian textiles and apparel. •

Few other global countries apart from USA and Europe, where India has a marked

presence include UAE, Saudi Arabia, Canada, Bangladesh, China, Turkey and Japan •

Ready made garments accounts for 45 percent share holding in the total textile exports and

8.2 percent in export production of India •

Export production of carpets has witnessed a major growth of 42.23 percent, which

apparently stands at USD 654.32 million during 2004-05 to USD 930.69 million in the year 200607. India holds 36 percent share in the global textile market as has been estimated during AprilOctober 2007

•

The technical textiles market in India is assumed to touch USD 10.63 billion by 2007-08

from USD 5.09 billion during 2005-06, which is approximately double. It is also assumed to touch USD 19.76 billion by the year 2014-15 •

By 2010, India is expected to double its share in the international technical textile market

•

The entire sector of technical textiles is estimated to reach USD 29 billion during 2005-2010

The Role of Textile Industry in India GDP also includes a hike in the investment flow both in the domestic market and the export production of textiles. The investment range in the Indian textile industry has increased from USD 2.94 billion to USD 7.85 billion within three years, from 2004 to 2007. It has been assumed that by the year 2012, the investment ratio in textile industry is most likely to touch USD 38.14 billion.

INFLATION EFFECTS ON INDIAN INDUSTRIES Cement sector on swampy ground For the cement sector, a likely slump in real estate owing to inflation will be bad news. According to a Mumbai-based analyst, “Rising inflation will result in hardening of interest rate, which will impact the demand for real estate. The real estate sector, which is already feeling the inflation heat, will see a further dip in demand impacting the demand for cement. If inflation keeps rising, there is a possibility of infrastructure projects slowing down.” Bitter sweet pill for pharma The pharma industry, which has recently stolen the limelight with the Daiichi Sankyo-Ranbaxy deal, sees inflation as a challenge. According to Percy Birdy, CFO, Glenmark Generics Limited, “ Indian pharma companies have demonstrated in the past that by focusing on internal efficiencies and controlling costs, they can maintain margins.” Also since many pharma companies export to global generics market, the weaker rupee will help them to an extent to tide over this impending inflation issue, he said. “ Having said that, India being a largely branded generics market with innumerable pharma companies operating in each and every therapeutic segment, competition is intense and so passing on cost inflation will be a challenge. This would also mean that the consumer will not bear the entire inflation burden,” he added.

No major impact on IT Although the IT sector may not be directly hit, doing business can get costlier. “Inflation can have a sociological impact on the cost of labour. Also, IT industry does not borrow much and so it will not see the impact on the cost of capital but it can impact the dead funds,” Deepak Ghaisas, CEO, India operations and chief financial officer, i-flex Solutions, said. “The inflation will not impact the IT service industry as compared to the other industries. But we will see the cost of entire business going up as the cost of setting up a development center will eventually go up with the prices of steel and cement rising,” said Harit Shah, an analyst with Angel Broking

Compensation of pharmaceutical industry As pharmaceutical companies step up their focus on retaining key sales staff, they are considering ways to leverage variable compensation, such as incentive, reward and recognition programs, as a strategic tool to maximize ROI in top talent and motivate their sales forces to support corporate strategies. Pharmaceutical companies traditionally have attracted and retained high-performing sales staff through offerings of competitive, total-compensation packages. These packages are usually comprised of base pay, benefits, bonuses and recognition programs – typically contests and awards (C&As). However, in recent years companies have balanced this goal with budgetary constraints by devising variable pay schemes, which account for a larger percentage of compensation, and offer increasing pay for higher performance. For example, across European countries, the proportion of variable pay compared to fixed pay varies by a factor of almost three-fold, thereby influencing the leverage that is achieved from individual bonus schemes in these countries. Today in the United States, industry emphasis is shifting from recruitment to retention activities. The costly effects of voluntary attrition among sales representatives, which results in recruiting and training costs, lost time in the territory and diminished client relationships, is estimated by the Hay Group to be $100,000 per individual. It’s now more important than ever that pharmaceutical companies take steps to ensure that their existing sales force remains productive, motivated and committed by developing and refining strategic incentive and reward programs. Furthermore, with an overall decrease in the total number of sales representatives, it’s imperative that pharmaceutical firms retain their best sales staff through an on-going process of adjusting variable pay practices. These steps are crucial to enabling the alignment of retention goals with other critical business objectives.

Compensation package of Indian IT Industry Management Level Indian IT industry is witnessing a high growth rate. The sector is recruiting more and more technical and professional people. The growth rate of recruitment in the sector has been observed as 14.5%. With the immense recruitments and high attrition rate, organizations focus on higher competitive packages. The average

increase

in

the

salary

during

2006

was

reported

as

16%.

The compensation package for an employee is based on various factors such as his/her educational level, relevant experience in the industry, job’s position in the hierarchy, skills and attributes and job related technicality. The average salary offered as per the experience level of the candidate is as follows: Dataquest-IDC has recently reported following as the top 20 highest salary payers in Indian IT sector. o

HCL Infosystems Limited

o

Hexaware Technologies

o

RMSI Private Limited

o

Cadence Design Systems

o

Tata Consultancy Services

o

Aztecsoft Limited

o

Nucleus Software

o

Induslogic

o

Kanbay International Inc

o

Cybage Software Private Limited

Entry Level Indian IT industry provides a lucrative compensation package provided for entry level jobs. Top players like TCS, Wipro, Infosys, Sasken, IBM, Accenture and other multinationals and locally owned organizations are providing most competitive packages to attract and retain talented human resource.

Indian IT sector offers various job openings to fresh engineers or diploma holders. The candidate aspiring to join an IT organization should posses certain technical and non-technical skills and attributes. Attainment of qualified degree or diploma certificate from a reputed institute/university would be an added advantage. The desired skills are: •

Effective Communication Skills

•

Sound Technical Knowledge

•

Strong Commitment Level

•

Strong Analytical Skills

•

Ability to meet deadlines

Besides the pay packages, employees are also given certain monetary and non-monetary benefits such as allowances, accommodations, respective positions, perks, incentives, insurances, etc. These benefits differ from organization to organization.

Compensation Package of Telecom industry Management Level

Telecommunication provides for excellent growth opportunities. In the global competitive environment experienced people have an upper hand in selecting an organization. Organizations need to offer most competitive

packages

and

heavy

perks

to

attract

and

retain

the

talentedworkforce.

Effective communication skills, good analytical skills and sound technical knowledge are must to have a respectable position in telecommunication sector. Organizations such as Idea Cellular, Tata Teleservices, Reliance Communications, Bharti Airtel, Nokia, Siemens, ericcson, Motorola, etc are advancing their technologies

and

providing

most

competitive

compensation

packages

People

working

in

telecommunication sector are asked to work at stretch and in pressure. Also, the level of experience determines one’s level of compensation package and position in the industry.

Entry Level The sector is offering openings in banking, insurance, capital market, venture capital, mutual funds, bonds, commodities markets, etc. Compensation provided to fresh management graduates is also very lucrative. The sector is open for CA, CS, accountants, MBA in finance and commerce graduates. Effective Communication Skills Sound Technical Knowledge Strong Commitment Level Strong Analytical Skills

Apart from pay packages marketing people also get high incentives and perks. The industry provides for special allowances such as annual bonus, house rent allowances, mobile allowances, transportations, travel leaves, paid vacations, etc.

Compensation package of Textiles For the two tranches of performance shares, the Company will record compensation expense on a variable basis over the 30-month period ending January 1, 2008. The amount and timing of such charges could vary significantly depending upon fluctuations in the Company's Class A Common Stock price per share and/or the probability of achieving the stock price performance hurdles under the agreement. Further, with respect to the second tranche of performance shares, the entire amount of any unrecognized stock compensation expense could be accelerated and charged in the period that the Company's Wet Seal division achieves sales per square foot and merchandise margin targets based on a trailing

12

months,

anytime

prior

to

January

1,

2008.

If all of the performance share stock price hurdles are attained, the Company will record non-cash compensation charges of at least $20.0 million over the 30-month period ending January 1, 2008. The Company cannot presently determine whether the price hurdles will be achieved, the amount of the periodic

charges

or

the

timing

of

the

charges

for

the

reasons

explained

above.

California based The Wet Seal Inc is a leading specialty retailer of fashionable and contemporary apparel and accessory items. Currently, it operates a total of 397 stores in 46 states, the District of Columbia and Puerto Rico, including 306 Wet Seal stores and 91 Arden B. stores.

TRAINING It is a learning process that involves the acquisition of knowledge, sharpening of skills, concepts, rules, or changing of attitudes and behaviors to enhance the performance of employees. Training

is

activity

leading

to

It’s

not

what

you

want

in

life,

but

it’s

It’s

not

where

you

want

to

go,

but

it’s

skilled

knowing knowing

how how

behavior. to to

reach get

it

there

It’s not how high you want to rise, but it’s knowing how to take off. It may not be quite the outcome you were aiming for, but it will be

an

outcome.

It’s not what you dream of doing, but it’s having the knowledge to

do

it

It is a learning process that involves the acquisition of knowledge, sharpening of skills, concepts, rules, or changing of attitudes and behaviours to enhance the performance of employees.

Training is activity leading to skilled behavior. It’s

not

It’s It’s It's

what

not

you

where

not

how not

you

high a

want want

you set

in want of

life, to

but

go, to

but

rise,

goals,

it’s

knowing

how

to

it’s

knowing

how

to

but but

it’s it’s

knowing more

how like

reach get

to

take a

it

there off. vision

It’s not the goal you set, but it’s what you need to achieve it Training is about knowing where you stand (no matter how good or bad the current situation looks) at present, and where you will be

after some point of

time.

Training is about the acquisition of knowledge, skills, and abilities (KSA) through professional development.

Role of Organization in Training and Development An organization has a very close relationship with the trainee and the trainer because it is the first contact

for

both.

The demand for the training in the organization increases when the To

hire

new

people

To

Expand

–

To

increase

certain

To enhance

the

–

When

training the

number

performance of

as

a

means

company

wants

of

(in

staff

of

organization wants: training

to

increase

position)

by

new its

a

recruits headcount

certain

date

employees

Organization’s name to be a part of training unit Demand for training also increases when there is change in the nature of job, change in taste of consumer, change in methods of product development, etc. The organization goes through the following steps for the transfer of training to the field. Importance Of Training and Development

Typical topic of Employee Training Communications: The increasing diversity of today's workforce brings a wide variety of languages and customs. Computer skills: Computer skills are becoming a necessity for conducting administrative and office tasks. Customer service: Increased competition in today's global marketplace makes it critical that employees understand and meet the needs of customers. Diversity: Diversity training usually includes explanation about how people have different perspectives and views, and includes techniques to value diversity Ethics: Today's society has increasing expectations about corporate social responsibility. Also, today's diverse workforce brings a wide variety of values and morals to the workplace.

Human relations: The increased stresses of today's workplace can include misunderstandings and conflict. Training can people to get along in the workplace. Quality initiatives: Initiatives such as Total Quality Management, Quality Circles, benchmarking, etc., require basic training about quality concepts, guidelines and standards for quality, etc. Safety: Safety training is critical where working with heavy equipment , hazardous chemicals, repetitive activities, etc., but can also be useful with practical advice for avoiding assaults, etc. Sexual harassment: Sexual harassment training usually includes careful description of the organization's policies about sexual harassment, especially about what are inappropriate behaviors.

General Benefits from Employee Training and Development There are numerous sources of online information about training and development. Several of these sites (they're listed later on in this library) suggest reasons for supervisors to conduct training among employees. These reasons include: Increased job satisfaction and morale among employees Increased employee motivation Increased efficiencies in processes, resulting in financial gain Increased capacity to adopt new technologies and methods Increased innovation in strategies and products Reduced employee turnover Enhanced company image, e.g., conducting ethics training (not a good reason for ethics training!) Risk management, e.g., training about sexual harassment, diversity training.