The new Companies Act, 2013

The new Companies Act, 2013, will come into force from April 1,2014. However, many sections are yet to be notified.
Experts say the new law will bring more transparency in corporate governance, while allowing flexibility to companies in exceptional situations. Initially, the government faced a lot of criticism on the implementation and lack of clarity in the law. The draft rules and, eventually, notification of final rules by ministry of corporate affairs (MCA) in recent months have helped ease the scenario to a large extent, they say.
                                                       Replacing the 58-year-old legislation, the new law would have stricter norms for independent directors, auditors, key appointments and standards of conduct. While there is a mandatory provision on spending for CSR, companies can explain if they want to digress from the norm. From Tuesday, companies with a net worth of more than Rs 500 crore or revenue of more than Rs 1,000 crore or net profit of more than Rs 5 crore will have to mandatorily spend two per cent of their average net profit over the three preceding years on CSR activities.
                                                     Also, companies must file returns on public deposits within three months and reconstitute their boards, with at least one woman and two independent directors (IDs) within a year.

Louis Philippe plans exclusive jeans stores; to open 30 odd units over next 3 years

Louis Phillipe, the country's leading menswear brand with a legacy of 25 years in the country, is planning to launch exclusive jeans stores. The Madura Fashion & Lifestyle (An Aditya Birla Nuvo enterprise) owned Louis Phillipe launched its jeans brand - LP Jeans last year and has seen encouraging response from the consumers.

Speaking at the sidelines of inaugural press conference of the Louis Philippe Cup, here in New Delhi, Jacob John, Brand Director, Louis Philippe, told  "Encouraged by the tremendous response that we have received from our one year old brand LP Jeans, we are increasingly going to focus on this category. We are optimistic that LP Jeans will be a big growth driver for us in coming years."

"We are looking at opening 10 exclusive LP Jeans stores this year and about 30 odd stores over next three years," he further stated.

Apart from this, Louis Philippe will also be focusing on its semi-casual sports brand LP Sports for which it is targeting 20 stores this fiscal and a total of 100 stores over next three years. The brand introduced LP Sports in the year 2008 and saw huge traction as well, according to John.
John maintained that the mother brand Louis Philippe will continue to grow but exponential growth will come from newer categories such as smart-casuals, footwear and accessories. He said that the footwear category, though difficult to operate in, would also be a focus area. The brand has been operating three exclusive footwear stores in the country as on date.

Louis Philippe contributes 30% to the overall turnover of Madura F&L and with a y-o-y growth of 25%, is looking at a turnover of Rs 1,200 cr in FY 2013-14.

John further informed that Louis Philippe will be looking at opening into new cities on the lines of its launches in Bhatinda, Patiala, Varansai, Gorakhpur, Trichur, Kottayam, Baroda and Surat. The brand is currently present in 100 cities and will be opening in 100 more towns - a combined figure for FY 2013-14 and next fiscal.

Godrej to convert 'Ezee' into a premium clothes washing brand

  Godrej Consumer Products Limited (GCPL) is aiming to transform its winter wears wash brand 'Ezee' into a premium clothes washing brand.
Ezee, which is a market leader in the liquid wash segment with a 75 per cent market share, is expanding it into a product which can be used round the year.
"We are looking for a category growth. Now we are focusing to convert Ezee from a product used specially for winter wears during a season to a round the year product," said GCPL COO Sunil Kataria to .
According to him, the company would try to expand its footholds in the Western and Southern region, where it has less presence due to lack of winters.
"Now we are projecting it as a liquid wash brand which can be used to wash the premium clothes of silk, chiffons and with delicate fabrics," he added.
GCPL would soon run a campaign highlighting Ezee's benefits over traditional washing powder and detergent bar.
"We would highlight the fact Ezee does not have any soda and it is much safer than the traditional method of washing," said Kataria on the sidelines of a function where Ezee was distributing woolen clothes to the poor children of the city.
Ezee, as part of its corporate social responsibility has collected around 21,000 winter wears from various residential societies, schools and through donation boxes put at Dunkin Donuts and Godrej group's retail venture Godrej Nature's Basket.
The woolen clothes are distributed through an NGO which would distribute it to underprivileged children of the NCR so that they combat the winter and attend their schools.
According to Kataria, by the next year, the company would try to expand it to more cities in the Northern region, which are more cold during the winters.

Bangalore-based Anu Solar to open 2,000 solar product stores in India

 Solar powered electronic products will now be available at retail stores across the country. These stores will sell varied products ranging from solar water heaters to solar powered calculators, caps with fans that run on solar power, solar power storing batteries and inverters.
Bangalore-based Anu Solar pvt ltd, a leading manufacturer and seller of solar products, will open 2,000 stores across India on franchisee basis.

"These will be called 'one-stop experience stores' as the store and all the office equipments will also run on solar power, in order to show the public, the use and benefits of solar power," said T J Joseph, managing director, Anu Solar.
The government wants to encourage the use of solar energy but currently there are no private retailers for solar products.

The ministry of new and renewable energy has been promoting private entrepreneurs to open 'Akshay Urja shops' to sell and promote solar products but since 2002, only 300 shops have been established across the country and a good number of them are not functioning and there is no shop in the capital.
"We want the public to experience the power of solar and also raise awareness for the same," said Joseph. For Delhi, Joseph said there was an expression of interest from a client who plans to open 40 retail stores.

The company plans to make at least 20 stores operational by the end of the year, including one each in Bangalore and Madurai by September. With an investment of around Rs. 25 lakh per store, the turnover expected is Rs. 6 crore per year per store. By the end of the current financial year, the company hopes to open 50 stores.

These stores will sell a variety of products at MNRE subsidised rates. "As we are channel partners with MNRE, we provide government-approved subsidy on all products," said Joseph.

Solar photovoltaic cells, solar power storing batteries, inverters, solar water heaters are some of the products which the company will propagate the most and major sales will depend on them.
But to raise awareness and draw the interest of the consumers, the company has planned to put on display some interesting stuff like caps with fans that will run once you are out in sun, toys and calculators that can be recharged by solar power, bags with solar powered mobile charging points etc.
There is a 5-year unconditional warranty on all the products except solar power storing batteries for which the warranty period is 3 years. Anu solar will train the staff and will provide after-sales service on all the products.

 

CAG becomes member of UN audit panel

New Delhi, Nov. 3:  

The Comptroller and Auditor General of India Shashi Kant Sharma has been elected to the coveted United Nations Board of Auditors for a six-year term. India defeated the Philippines with a convincing margin in the election to the panel. India got the support of China and Pakistan in the elections.

A statement from the CAG’s office said out of the 186 votes cast, India got 124 votes and the Philippines got 62.

India will replace China beginning July 1, 2014. The CAG of India will now get access for audit of the UN organisations, including the UN Headquarters. “He, along with other two members of the board will also be responsible for audit of UN bodies like UN Peacekeeping Operations, UN Development Programme, UNICEF, UN High Commissioner for Refugees, UN Environment Programme, UN Human Settlements Programme, UN Women and UN Framework Convention on Climate Change,” the release said.

It added that Sharma took keen interest for the post and canvassed the Ambassadors and High Commissioners and briefed them about the Indian Auditors. India was earlier in the Board for six years from 1993.

The United Nations Board of Auditors audits the accounts of the United Nations organisation and its funds and reports its findings and recommendations to the UN General Assembly through the Advisory Committee on Administrative and Budgetary Questions. The Board of Auditors is completely independent and is solely responsible for the conduct of the audit.

The General Assembly appoints three members to the Board of Auditors. The members of the Board have joint responsibility for the audits. The present members of the Board of Auditors are from Britain, Tanzania and China.

Delhi entrepreneur finds success in a mug of beer

Why would an apparel retail professional with a textiles degree raise a mug of beer and say cheers? "Destiny is not a matter of chance; it's a choice. It took 20 years of working with lifestyle and sportswear companies to realise that I was destined to become an entrepreneur. By chance, I met another professional-turned-entrepreneur who came from the world of beer. The idea of beer clicked and we launched The Beer Cafe in Delhi," explains 43-year-old Rahul Singh. The venture kick-started in 2010 with an initial investment of Rs 1 crore with partner Pradeep Gidwani but Singh bought the brand a year later.

Betting His Life On It
This may sound dramatic, but Singh mortgaged his house against a bank loan to see him through the first phase of his business. It was a huge gamble and, fortunately, it paid off. "You have to work like your life depends on it because, sometimes, it does," remembers Singh.
The biggest challenge while launching The Beer Cafe was finding the right location. "I wanted it closer home in Gurgaon and was able to jump the queue and get a store at Ambience Mall. So, the first Beer Cafe opened in April 2012." The diverse and eclectic mix of customers from the Delhi-NCR region looking to unwind after a hard day's work saw the cafe buzzing very soon. Ecstatic with the response, Singh quickly rolled out five more beer cafes in the first year of operation, four in Delhi and one in Chandigarh.

What's So Special?
The Beer Cafe serves 50 varieties of beer from 17 countries along with Indian and Italian cuisine. The outlets have special RFID (radio frequency identification)-activated PYOB (Pour Your Own Beer) cards, draught beer taps and beer tanks. The RFID-activated card is prepaid and works on any of The Beer Cafe locations in the country. All one needs to do is pick a pre-cooled beer mug and use the card to pay for it. The beer enthusiast is only charged for the amount of beer he pours (minus the froth).





















       Rahul Singh, owner of The Beer Cafe

Store Dynamics
The Beer Cafe has six outlets in Delhi/NCR (Connaught Place, Vasant Kunj, Kirti Nagar, Saket, two in Gurgaon) and one in Chandigarh. The plan is to launch 13 more locations this year (four more in Delhi, four in Punjab and five in Mumbai, Thane and Pune). All Beer Cafe outlets are COCO (company-owned, company-operated) and Singh has no plans to take the franchise route.
The Beer Cafe prefers heavy footfall locations as it's not an indulgence- or an occasion-based restaurant but more impulse-led. Malls, high streets around other cafes and commute points like the airport and metro stations are preferred locations. The average store size is 1,200-1,500 sq ft and the investment is between Rs 60 and Rs 80 lakh. A large part of the investment goes into technology and equipment. Break-even takes 15-24 months.

Revenue Model
Around 65-70 per cent of the revenue comes from beer. Of this, 50 per cent of sales are from draught beer. About 20-25 per cent is from food sales and 5-10 per cent comes from the sale of other beverages. The average spend is Rs 1,000 plus taxes (inclusive of beer).
The Beer Cafe received its first round of VC funding of Rs 25 crore within a year of operation from Mayfield, a California-based venture capitalist. "They believed in the concept as much as we did and were convinced of its potential to grow. The fund is being utilised to roll out outlets and setting up a robust backend team. In phase two, we will enter small towns. We think there is a huge potential there," says Singh. The first year brought in Rs 5 crore in revenue. Singh says he expects the figure to quadruple this year. "The target is to cross Rs 300 crore in top line in the next three years."
 













     The Beer Cafe, Vasant Kunj, Delhi

Burps & Bumps
The biggest challenge was the regulatory system. Beer, with an alcohol content of 5 per cent, is considered liquor in India, and lack of a uniform excise policy makes things difficult. Compliance and paperwork is both time-consuming and complicated. The multiple licences (tourism, music, food safety, fire, pollution and health) is also a huge challenge.
Taxes and other levies are another knotty issue. "Being a low-on-alcohol beverage, beer should not be taxed as hard liquor. WHO recommends that countries wean people away from hard liquor and move towards healthier alternatives like beer and wine. The regulatory authorities in India should align themselves with global standards," says Singh.
Beer is the third-largest beverage consumed in the world, after water and tea. Industry estimates put India's per capita annual beer consumption at 1.5 litres, whereas it is 35 litres in China, which is by far the largest consumer of beer (20 per cent more than the USA in second place). With beer consumption in India growing in double digits, The Beer Cafe feels it is on the right track.

The story of Jumboking

"My family was flabbergasted when I told them I wanted to sell vada paav with my MBA degree," laughs Dheeraj Gupta. But his dream paid off and it's the young entrepreneur who is laughing all the way to the bank. Gupta is the owner of the Jumboking brand of vada paav in India and is now on the verge of opening his 54th outlet.
But becoming the 'king' of vada paav wasn't a cake walk. Hailing from a business family, it was a foregone conclusion that Gupta would become a businessman. Soon after he acquired an MBA degree from a Pune institute, he decided to brand Indian mithai overseas. Unfortunately, the idea didn't catch on and Gupta learnt an expensive lesson.

Big Bite
Then, he ran into a franchisee of Burger King while on a trip to London and he figured he would take another bite out of the food business. "I was reading up on entrepreneurship and was particularly inspired by a book on the founder of McDonald's," recalls Mumbai-based Gupta.

So he decided to promote the vada paav as the Indian equivalent of the burger and set about researching the market. "Mumbai and Thane consume over 2 million vada paavs every day. At a market price of Rs 10 apiece, that's a market of over Rs 700 crore per annum in these two cities alone. It is a very large but unorganised market, and this is where branding the vada paav as 'Jumboking' came in," Gupta reveals. He figured that branding the product and serving it in a hygienic setting, with a transparent kitchen and stainless steel equipment would do the trick. It didn't.
With Rs 2 lakh borrowed from his father and a spot near Malad railway station which belonged to the family, Gupta took the plunge in 2001. He operated the outlet with his wife and four employees, but in the first six months, experienced a turnover of only Rs 3,000-4,000 a day. "It was very frustrating as we were unable to convince customers that we were hygienic and different," remembers Gupta. 

Second Time Lucky
Not one to give up, he decided to have a second go at the vada paav -- this time serving it in a wrapper just like the McDonald's burger it was modelled after. Sales doubled, and Gupta launched his second store in Malad after 18 months and the third one in Andheri. The fourth store became Jumboking's first franchised store and, ever since, the brand has followed the franchise model. Next, Gupta infused further innovations, with automation, wrapping, using round bread, a bigger and flatter vada instead of the traditional round one, and a variety of flavours.

Revenue Model
Jumboking has 53 stores in eight cities including some metros and smaller cities. The company runs a 100-per cent franchise system. Products across all outlets are standardised as as they are manufactured in a central kitchen and transported to the outlets, where the vada paav is assembled using standardised equipment.
Jumboking is essentially a vada paav brand and the product and its variations contribute 80 per cent to the total sales. The balance comes from beverages like colas and lassi. The average spend at a Jumboking store is Rs 25-30 per customer.



 














Dheeraj Gupta, Founder, Jumboking
An average Jumboking store measures 200-250 sq ft and the investment per store is Rs 12 lakh, plus a property deposit. The stores earn an ROI starting at 33 per cent and break even in three years. Gupta's strategy of sticking only to railway-connected locations in Mumbai has paid handsome returns since the vada paav is targeted at the working class. "The idea is to choose areas where people are constantly 'on the go' and looking for a quick snack rather than a full meal."
Jumboking has had two rounds of funding so far. "We are now a profitable company and are not looking at raising funds in the near term. We will be closing this year with a turnover of Rs 30-35 crore," says Gupta.
Thinking out of the box comes naturally to this innovator, who has tempted the palate with versions of the vada paav like schezwan, tandoori paneer, corn palak and butter grilled vada paav. Creating a Vada Paav Day (August 23, the day Jumboking launched) is an effort to create hype around the humble snack.

Guru Gyaan
* If you don't have the money to advertise, don't waste your money on single advertisements in newspapers. That won't work. Instead, give something back to your customers. At Jumboking, our first main marketing initiative was to hand out railway passes to our customers.
  
* Location hunting is crucial. We focused on railway lines -- one each on the east and west. We have perfected this strategy to a science.
* We decided to focus on a single product instead of offering a range of snacks. We passed up on samosas to improve our cost-efficiency on the vada paav.
* Dream big, don't be afraid. Get a team in place that will be able to share your dream.

* Share your business plan with a mentor. I was lucky to meet a mentor who asked to me wind up my sweets business. On that dull day, when you think of winding up, you need that one person who will say 'let's keep going'.
  
* Do not hanker after aggressive growth on an annual basis. This results in disappointment when you don't meet your goals.