This story first appeared in DNA Money edition on Friday, May 24, 2013.
The Singh family on Thursday said Daiichi Sankyo’s allegation of concealment and misrepresentation regarding drug research at Ranbaxy Laboratories is false and baseless.
On Wednesday, Daiichi Sankyo said it is weighing legal options to sue the former promoter-shareholders of the New Delhi-based generics drugmaker.
The Singh brothers — Shivinder & Malvinder — had sold Ranbaxy to Daiichi in 2008 for $4.6 billion. Daiichi bought a 51% stake — including 34.8% that the Singhs held — in June 2008.
The Singh family claimed that Daiichi Sankyo purchased their interests in Ranbaxy in 2008 after a long negotiation process, as is typical of deals of this magnitude, and after conducting full due-diligence.
“At every step of the way during the negotiation process, Daiichi Sankyo and its representatives were made aware of the on-going FDA and Department of Justice
investigations. They were also given full access to the documents at Ranbaxy pertaining to the FDA and DoJ investigations,” the Singh family said in a statement.
They added that Daiichi Sankyo went into the deal after satisfying itself with its due diligence and with the benefit of legal advice.
“The belated suggestion, made years after the fact, that information was concealed from and/or misrepresented to Daichii Sankyo is false and designed to divert attention away from Daiichi Sankyo’s own failures,” they said in the statement.
Sunday, 26 May 2013
FDA import alert a Rs 550 crore hit for Wockhardt
This story first appeared in DNA Money edition on Friday, May 24, 2013.
An ‘import alert’ by the US Food and Drug Administration (FDA) on one of its plants is likely to cause a sales loss of $100 million or over Rs 550 crore, Wockhardt said.
The FDA has expressed concern on the drugmaker’s export-oriented facility in Aurangabad.
The Wockhardt management, however, said it should be able to restore most of that ($100 million impact on revenues) within six to nine months by shifting production elsewhere. “That is a worst-case scenario,” said Habil Khorakiwala, chairman.
Shares of Wockhardt fell 20% on Thursday to their lowest level in more than seven months, post the import alert published by USFDA for the Aurangabad unit.
Interestingly, the company’s shares had corrected sharply by over 20% earlier in April when FDA had sought clarifications on the company’s injectables facility in Aurangabad as it was not satisfied with the processes/systems there.
Calling it a routine matter, the company spokesperson has then said that there was nothing more to disclose.
Analysts familiar with the development had said that the company was issued FDA 483 letter for the Aurangabad unit which would be followed by a warning letter, if FDA is not satisfied with the response.
“However, it’s not something to be worried about as the said unit doesn’t contribute more than 3-4% of Wockhardt’s US revenues,” Bhavika Thakker, research analyst, IIFL had said.
Typically, in an FDA 483 letter scenario, once observations are given by the USFDA, the company is given one month time to rectify and submit their response.
Analysts had also said, in case the facility receives a warning letter, it would only affect new approvals in injectibles and not affect current revenue stream materially. The Aurangabad unit currently does not materially contribute to the company’s revenues as it does not include Toprol XL, Flonase or any high value product.
An ‘import alert’ by the US Food and Drug Administration (FDA) on one of its plants is likely to cause a sales loss of $100 million or over Rs 550 crore, Wockhardt said.
The FDA has expressed concern on the drugmaker’s export-oriented facility in Aurangabad.
The Wockhardt management, however, said it should be able to restore most of that ($100 million impact on revenues) within six to nine months by shifting production elsewhere. “That is a worst-case scenario,” said Habil Khorakiwala, chairman.
Shares of Wockhardt fell 20% on Thursday to their lowest level in more than seven months, post the import alert published by USFDA for the Aurangabad unit.
Interestingly, the company’s shares had corrected sharply by over 20% earlier in April when FDA had sought clarifications on the company’s injectables facility in Aurangabad as it was not satisfied with the processes/systems there.
Calling it a routine matter, the company spokesperson has then said that there was nothing more to disclose.
Analysts familiar with the development had said that the company was issued FDA 483 letter for the Aurangabad unit which would be followed by a warning letter, if FDA is not satisfied with the response.
“However, it’s not something to be worried about as the said unit doesn’t contribute more than 3-4% of Wockhardt’s US revenues,” Bhavika Thakker, research analyst, IIFL had said.
Typically, in an FDA 483 letter scenario, once observations are given by the USFDA, the company is given one month time to rectify and submit their response.
Analysts had also said, in case the facility receives a warning letter, it would only affect new approvals in injectibles and not affect current revenue stream materially. The Aurangabad unit currently does not materially contribute to the company’s revenues as it does not include Toprol XL, Flonase or any high value product.
Dentsu acquires Capital 18's stake in Webchutney
An edited version of this story first appeared in DNA Money edition on Friday, May 24, 2013.
The Dentsu India Group has acquired 80% stake in Webchutney from Capital18 (venture capital arm of Network18) for an undisclosed sum. With around 200 employees, Webchutney is one of India’s leading digital agencies working in the areas of web design, social media, mobile and experiential digital advertising.
Rohit Ohri, executive chairman, Dentsu India Group, said, that partnership with Webchutney is another step in building the network of the future. "We’re now going to be able to put world class digital solutions in the centre of our offering to our clients," said Ohri.
Webchutney is Dentsu's first acquisition in the digital space. The integrated communication solutions provider had earlier acquired stake in Taproot India as well.
Though financial terms related to this deal were kept under wraps, Network18 informed that this divestment was in line with its strategy of monetising its investments and claimed the investment has generated a return of over 300% to the company.
Network18 held 70.06% stake in the company, through its investment arms Capital18 Limited Mauritius which held 49.42% stake and Capital18 Fincap Pvt Ltd which held 20.64% stake.
In the works for a while now, earlier media reports had pegged the deal size to be between Rs 40 crore and Rs 60 crore. For the fiscal 2012, Webchutney had registered a profit of Rs 6.35 crore on total revenue of Rs 21.55 crore.
Founded by Sidharth Rao and Sudesh Samaria in 1999, Webchutney will continue to operate independently under the management control of its current leadership.
The Dentsu India Group has acquired 80% stake in Webchutney from Capital18 (venture capital arm of Network18) for an undisclosed sum. With around 200 employees, Webchutney is one of India’s leading digital agencies working in the areas of web design, social media, mobile and experiential digital advertising.
Rohit Ohri, executive chairman, Dentsu India Group, said, that partnership with Webchutney is another step in building the network of the future. "We’re now going to be able to put world class digital solutions in the centre of our offering to our clients," said Ohri.
Webchutney is Dentsu's first acquisition in the digital space. The integrated communication solutions provider had earlier acquired stake in Taproot India as well.
Though financial terms related to this deal were kept under wraps, Network18 informed that this divestment was in line with its strategy of monetising its investments and claimed the investment has generated a return of over 300% to the company.
Network18 held 70.06% stake in the company, through its investment arms Capital18 Limited Mauritius which held 49.42% stake and Capital18 Fincap Pvt Ltd which held 20.64% stake.
In the works for a while now, earlier media reports had pegged the deal size to be between Rs 40 crore and Rs 60 crore. For the fiscal 2012, Webchutney had registered a profit of Rs 6.35 crore on total revenue of Rs 21.55 crore.
Founded by Sidharth Rao and Sudesh Samaria in 1999, Webchutney will continue to operate independently under the management control of its current leadership.
Optimism has now reached fast-moving consumer goods companies: Mark Patterson
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| Mark Patterson |
Mark Patterson plays key roles in GroupM, the world’s No.1 media investment management operation which serves as the parent company to WPP’s media agencies.As CEO for Asia Pacific and chairman of China operations, Patterson oversees GroupM’s business across a humongous region. He tells why India and China are now growth-drivers in the region. Excerpts from the interview:
Could you share your views on the advertising industry in the Asia-Pacific (APAC) region?
It’s really difficult to give an overall APAC situation. There is small single-digit growth in some markets, mega growth or high double-digit growth in a few other markets and everything else in between. That spectrum and diversity make it very difficult to identify what’s common between them because they are all so uncommon.
How do India and China compare with other regional markets?
India and China certainly fit in the scale of growth bucket. For our business and most other businesses, they are the engines or drivers of growth. It is like... the more we put in, the more we get from these markets. It’s a question of prioritising and there is no disrespect to other markets.
How does GroupM plan to grow in India?
We have been having a significant scale for some time. In India, we had to be braver, take more risks, be smarter about our growth strategy. When you have a certain scale, there is natural organic growth. We’ve reinvented ourselves several times over in the last few years. Being here for over a decade now, we have always had the ability to continue to challenge, develop and innovate, and to shape and lead the market. I think India is unique in that regard and we had to do a lot more differently here than in some other markets.
What were the focus areas of discussion during your India visit?
We spent time talking about MashUp (a joint venture with television production company Optimystix) which is a unique Indian proposition to deliver industrial-scale sustainable engagement online videos. Our mobile play with Madhouse, which is a Chinese company, is something that, in a way, brings China and India together, which is very unique.
Discussions largely focused on continuously diversifying and extending new services to other markets where they aren’t available.
Will you also be looking at some inorganic growth?
While we have been very acquisitive over the years, it doesn’t have to be that way always.
Our recent initiative MashUp is a great example of using partnerships as a strategy to deliver certain offerings in the market. In fact, we have another 4-5 such partnerships currently under discussion. We will work on delivering new services and continue to offer integrated broader solutions to clients.
You met top clients. What did they say?
Our discussion brought out one thing that’s common – cautious optimism. And that has now reached the fast-moving consumer goods (FMCG) companies. That’s sort of the key phrase across, something I would not really like to disagree with in most markets, to be honest.
I’ve spent a lot of time in China where the growth rate is still great, but it’s not what they were and there is still a degree of uncertainty. There is, sort of, this basic pessimism in Australia, while Japan seems to be gathering optimism.
Generally, people are getting to shorter-term outlook and clients are looking month to month, quarter to quarter, at best. Nobody is prepared to go beyond and make a prediction whether this is going to be a good year. The basic question is — how good will it be?
The risk with making a prediction is that you can always go wrong. But what I also found out is that the mood can change quite quickly; I could be in a particular market where four months hence things will have gone one way or the other for whatever reasons. It could be a 10-20% shift in sentiment rather than a 5%.
Any thoughts on agency-media relationships in the context of changing market dynamics in India?
The relationship we have with media partners is crucial on so many levels. The way we contract and work with media partners is changing as much as the way we contract and work with clients. If we have our people going on that side (media and clients), the circles all overlap and so can help down the line. One of the advantages of our network is the fact that we have scale, our people go out into other parts of business, but we always have that connection. In the end, it’s the relationship that works in this business.
Dish TV subscription revenues grow 15%
This story first appeared in DNA Money edition on Thursday, May 23, 2013.
Dish TV, India's top direct-to-home (DTH) company, has reported a 6.5% year-on-year rise in operating profit for the quarter ended March at Rs 120 crore and a 7.6% increase in standalone operating revenues at Rs 555.4 crore.
The company, a market leader with a 24% share, recorded 15.3% on-year growth in subscription revenues at Rs 500.1 crore.
Operating profit margin for the quarter stood at 21.6%. Reporting first full year of positive free cash flow this fiscal, Dish TV's net loss for the January-March quarter was down to Rs 43.6 crore against a loss of Rs 49.02 crore a year ago. The company said losses continued to be influenced by depreciation and write-off policy.
On future potential, Subhash Chandra, chairman, Dish TV India, said, “In the media sector, digitisation, though not fully up to speed, holds big potential for the industry. DTH platforms, in particular, look forward to a level-playing field, contributing to meaningfully higher ARPUs and stickier subscriber base over time. Dish TV’s industry leading initiative, to hike acquisition and pack price is likely to be a catalyst to achieve that.”
The company added 0.2 million net subscribers in the March quarter, touching a total of 10.7 million net subscribers. Its subscriber acquisition cost at Rs 1,996 was down compared with Rs 2,201 in preceding December quarter. Higher winbacks reduced average churn for the quarter to a low of 0.8% per month compared with 1% in the previous quarter.
Consolidated total income was up 10.66% to Rs 2,166.80 crore in fiscal 2013 from Rs 1,957.93 crore in the previous fiscal. Consolidated net loss halved to Rs 66 crore from Rs 133.14 crore in the previous fiscal.
Jawahar Goel, managing director, Dish TV, said, “Fiscal 2013 saw most players in the Indian DTH industry evolve to the next level. Under Dish TV’s leadership, the industry pulled off a significant increase in the acquisition price over the last several months, thereby reducing the effective cash burn per subscriber. While the resultant decline in industry gross additions is marginal, it is expected to be well compensated by quality of subscribers. There was no respite though, from the multiple taxation which the DTH industry is reeling under. Uncertainty on the rollout of Goods & Services Tax (GST) continues to be an overhang on the earnings potential of the industry.”
The ARPU for the quarter at Rs 157 was down compared with Rs 160 in the immediately preceding quarter. “However, on a like-to-like basis, ARPU for the quarter would have been Rs 160, considering that revenue is recognised over a 90-day period in the fourth quarter compared with 92 days in the third quarter. On the expenses front, a 5.1% year-on-year increase in content cost for the fiscal remained well within the guided range of 10-12% hike,” said Goel.
Dish TV, India's top direct-to-home (DTH) company, has reported a 6.5% year-on-year rise in operating profit for the quarter ended March at Rs 120 crore and a 7.6% increase in standalone operating revenues at Rs 555.4 crore.
The company, a market leader with a 24% share, recorded 15.3% on-year growth in subscription revenues at Rs 500.1 crore.
Operating profit margin for the quarter stood at 21.6%. Reporting first full year of positive free cash flow this fiscal, Dish TV's net loss for the January-March quarter was down to Rs 43.6 crore against a loss of Rs 49.02 crore a year ago. The company said losses continued to be influenced by depreciation and write-off policy.
On future potential, Subhash Chandra, chairman, Dish TV India, said, “In the media sector, digitisation, though not fully up to speed, holds big potential for the industry. DTH platforms, in particular, look forward to a level-playing field, contributing to meaningfully higher ARPUs and stickier subscriber base over time. Dish TV’s industry leading initiative, to hike acquisition and pack price is likely to be a catalyst to achieve that.”
The company added 0.2 million net subscribers in the March quarter, touching a total of 10.7 million net subscribers. Its subscriber acquisition cost at Rs 1,996 was down compared with Rs 2,201 in preceding December quarter. Higher winbacks reduced average churn for the quarter to a low of 0.8% per month compared with 1% in the previous quarter.
Consolidated total income was up 10.66% to Rs 2,166.80 crore in fiscal 2013 from Rs 1,957.93 crore in the previous fiscal. Consolidated net loss halved to Rs 66 crore from Rs 133.14 crore in the previous fiscal.
Jawahar Goel, managing director, Dish TV, said, “Fiscal 2013 saw most players in the Indian DTH industry evolve to the next level. Under Dish TV’s leadership, the industry pulled off a significant increase in the acquisition price over the last several months, thereby reducing the effective cash burn per subscriber. While the resultant decline in industry gross additions is marginal, it is expected to be well compensated by quality of subscribers. There was no respite though, from the multiple taxation which the DTH industry is reeling under. Uncertainty on the rollout of Goods & Services Tax (GST) continues to be an overhang on the earnings potential of the industry.”
The ARPU for the quarter at Rs 157 was down compared with Rs 160 in the immediately preceding quarter. “However, on a like-to-like basis, ARPU for the quarter would have been Rs 160, considering that revenue is recognised over a 90-day period in the fourth quarter compared with 92 days in the third quarter. On the expenses front, a 5.1% year-on-year increase in content cost for the fiscal remained well within the guided range of 10-12% hike,” said Goel.
Daiichi weighs options to sue Ranbaxy Labs promoters
This story first appeared in DNA Money edition on Thursday, May 23, 2013.
Daiichi Sankyo, the Japanese parent of Ranbaxy Laboratories, is weighing legal options to sue the former promoter-shareholders of the New Delhi-based generics drugmaker.
The Singh brothers -- Shivinder & Malvinder -- had sold Ranbaxy to Daiichi in 2008 for $4.6 billion. Daiichi bought a 51% stake -- including 34.8% that the Singhs held -- in June 2008.
In a statement, the company said it believes “certain former shareholders” of Ranbaxy concealed and misrepresented critical information concerning the US Department of Justice and Food and Drug Administration (FDA) investigations.
“Daiichi Sankyo is currently pursuing its available legal remedies and cannot comment further on the subject at this time,” the company said.
“Daiichi Sankyo continues to support Ranbaxy in its efforts to address and correct the conduct of the past which led to the investigations by the US Department of Justice and the FDA. These efforts include significant changes to Ranbaxy’s management, culture, operations and compliance,” it said.
Arun Sawhney, CEO and managing director, said: “Ranbaxy is a different company today.
The steps we have taken over the recent years reflect the wide-ranging efforts of the current board and management to address certain conduct of the past and ensure that Ranbaxy moves forward with integrity and professionalism in everything we do. We are fully committed to upholding the high standards that patients, prescribers and all other stakeholders expect.”
The comments follow a detailed excoriation of Ranbaxy’s past practices by the Forbes magazine in its latest issue.
“All Ranbaxy products currently in the global market are safe and effective,” Sawhney said.
The company, he said, has made investments of over $300 million (Rs 1,650 crore) in its manufacturing facilities to install state-of-the-art technologies.
“We have also instituted a rigorous new code of conduct for all Ranbaxy employees, with clear accountability for compliance,” he said.
Sawhney said Ranbaxy has successfully launched several new generic equivalents across the world recently, and maintains a robust pipeline of important new products.
“We look forward to continuing to enrich lives globally with quality and affordable medicines.”
Daiichi Sankyo, the Japanese parent of Ranbaxy Laboratories, is weighing legal options to sue the former promoter-shareholders of the New Delhi-based generics drugmaker.
The Singh brothers -- Shivinder & Malvinder -- had sold Ranbaxy to Daiichi in 2008 for $4.6 billion. Daiichi bought a 51% stake -- including 34.8% that the Singhs held -- in June 2008.
In a statement, the company said it believes “certain former shareholders” of Ranbaxy concealed and misrepresented critical information concerning the US Department of Justice and Food and Drug Administration (FDA) investigations.
“Daiichi Sankyo is currently pursuing its available legal remedies and cannot comment further on the subject at this time,” the company said.
“Daiichi Sankyo continues to support Ranbaxy in its efforts to address and correct the conduct of the past which led to the investigations by the US Department of Justice and the FDA. These efforts include significant changes to Ranbaxy’s management, culture, operations and compliance,” it said.
Arun Sawhney, CEO and managing director, said: “Ranbaxy is a different company today.
The steps we have taken over the recent years reflect the wide-ranging efforts of the current board and management to address certain conduct of the past and ensure that Ranbaxy moves forward with integrity and professionalism in everything we do. We are fully committed to upholding the high standards that patients, prescribers and all other stakeholders expect.”
The comments follow a detailed excoriation of Ranbaxy’s past practices by the Forbes magazine in its latest issue.
“All Ranbaxy products currently in the global market are safe and effective,” Sawhney said.
The company, he said, has made investments of over $300 million (Rs 1,650 crore) in its manufacturing facilities to install state-of-the-art technologies.
“We have also instituted a rigorous new code of conduct for all Ranbaxy employees, with clear accountability for compliance,” he said.
Sawhney said Ranbaxy has successfully launched several new generic equivalents across the world recently, and maintains a robust pipeline of important new products.
“We look forward to continuing to enrich lives globally with quality and affordable medicines.”
Myths make advertising exciting and desirable
These Q&As first appeared in DNA Money edition on Wednesday, May 22, 2013.
Portfolio Night 11, a global event to nurture young talent in the advertising industry by giving them an opportunity to showcase their ideas to creative directors of the country is taking place today evening at the JWT India office in Mumbai. Ashish K Tiwari spoke to four of the 30 jury panelists, who would judge the work at the Mumbai leg of the event which is being simultaneously held in 20 cities globally. JWT, a unit of WPP, the world's biggest communications company, hosting the Mumbai event.
I look for the work, the passion, the hunger, the madness inside, the look in the eyes, the truth about the individual. A portfolio is about the work, but it is also about the person.
What are your views on the various myths people have about advertising and the industry in general?
Myths are important. They play an important role in building an aura around the industry. Myths add to the conversation and make advertising exciting and desirable. We need more myths. Myths are the advertising agency for advertising.
What is the myth that you would like to bust for those waiting to enter the industry?
I'm not in the business of busting myths. I'm in the business of creating them. Myths add sizzle to people, brands and life. It gives people something to share and pass on. All I can say to the newcomers is follow the myths. Think for yourself. Find out for yourself. Seek your own truth. That's the reason you are here in the first place.
Did you have a myth on advertising before joining the industry? What was it and how did you develop that myth?
I was clueless when I joined advertising. I had no myths about the industry. But I had a myth about myself. I thought I was creative. People told me I wasn't. So I spent my early years trying to prove that I am creative. I'm still trying. I have lots more to discover. My myth is my fuel. My myth makes me me.
How did it get busted when you actually got into advertising?
I was fortunate that people didn't believe the myth about me. The myth that I was creative. But then one day I met this amazing man called Suresh Mullick. He publicly acknowledged me as being creative. He called me 'Youth of India'. I tried to live up to his belief about me. In time I lived out my own myth.
Any other observations that you'd like to share with the people looking to make a career in advertising?
I'd ask the freshers one question -- What's the myth you have about yourself? Your myth will give you energy. It will drive you, keep you hungry. And even if the creative directors who are judging you at Portfolio Night don't acknowledge your myth about yourself, it's okay. Go your way. Your myth will take you to where you belong. You can be great if you focus, believe and follow your myth.
The ideation process, the freshness in thinking.
What are your views on the several myths people have about advertising and the industry in general?
The biggest myth is that you can express yourself the way you feel like. In reality there is a method to this madness and yet there is some madness to the method.
What is that myth that you would like to bust for those wanting to enter the industry?
The myth that I want to break is that advertising is not rocket science. End of the day this is serious selling of a product creatively.
Did you have a myth on advertising before joining the industry?
The myth that I had been told about, is that you get to hang out with fancy models. This is definitely not the truth. I've tried to break the myth by telling people that it's sheer hard work but they refuse to believe me.
How did it get busted when you actually got into advertising?
I think it got busted when I found that we spent more time running to client's office, running to media houses to deliver artworks, running to slide makers for big presentations. So I never got to see the fancy models that I could run after.
Any other observations you'd like to share with the people looking to make a career in advertising?
It is an exciting business because you're addressing and solving different things every week. This sheer variety is unlikely to come to you on a weekly basis in any other business. So if you have the passion, this is a great business to be in.
What are the key aspects you would look for in a portfolio?
When I look at a portfolio, I am usually most impressed by great craft, or at least the promise of great craft. At the same time, I look for simple, imaginative ideas that answer a particular need. It’s important that the work is in good taste. Creativity is most important. Yet there shouldn’t be a logical flaw in the way the idea is conceived.
What are your views on the various myths people have about advertising?
Many of the old myths about advertising are not relevant anymore. The world’s more transparent now. People know more about everything. I think people realise that advertising is not like they show it in Mad Men.
What is that myth that you would like to bust for those waiting to enter the industry?
That it’s just about great work. Nothing else matters. And great work requires a tremendous amount work, not just talent.
Did you have a myth about advertising before joining the industry?
I did not have a myth. I wanted to get into architecture. Advertising was the second choice. But that was then.
Any other observation that you’d like to share with the people looking to make a career in advertising?
1. Be nice to others. In today’s collaborative world, you need to be a great team player.
2. Don’t be too disillusioned by your talent. It is only 5% of the reason for your success.
3. Never be attached to your ideas. It is better to pre-empt the death of your favourite idea, and be prolific.
4. Concentrate most on your key craft. But read up, learn and stay interested in other disciplines.
What are the key aspects that you would look for in a portfolio?
First, I would ask every aspiring young chap to showcase only 10 best pieces of work in the portfolio. This would force the candidate to be a judge of their own work first and help understand their point of view on advertising. Next, I would look for original ideas.
What are your views on the various myths people have about advertising and the industry in general?
Creative arts are amplified by mythology and the legends that supposedly live these myths. And this just goes to prove that people are really interested in this profession and the industry by spreading these myths through the oldest form of communication ever -- word of mouth.
What is that myth that you would like to bust for those waiting to enter the industry?
The myth that advertising is rocket science. I believe that common sense and a curious mind is all that you really need.
Did you have a myth on advertising before joining the industry? What was it and how did you develop that myth?
The myth that advertising is difficult if you don’t have training in the visual arts or creative writing.
How did it get busted when you actually got into advertising?
When I started believing in my ideas I lost all unnecessary doubts and just took the plunge.
Any other observations?
Stay hungry. Believe in your ideas. Never give up on an idea. And the best revenge is a better idea.
Portfolio Night 11, a global event to nurture young talent in the advertising industry by giving them an opportunity to showcase their ideas to creative directors of the country is taking place today evening at the JWT India office in Mumbai. Ashish K Tiwari spoke to four of the 30 jury panelists, who would judge the work at the Mumbai leg of the event which is being simultaneously held in 20 cities globally. JWT, a unit of WPP, the world's biggest communications company, hosting the Mumbai event.
Myths make advertising exciting and desirable
Josy Paul, chairman and chief creative officer, BBDO India
What are the key aspects you would look for in a portfolio?
I look for the work, the passion, the hunger, the madness inside, the look in the eyes, the truth about the individual. A portfolio is about the work, but it is also about the person.
What are your views on the various myths people have about advertising and the industry in general?
Myths are important. They play an important role in building an aura around the industry. Myths add to the conversation and make advertising exciting and desirable. We need more myths. Myths are the advertising agency for advertising.
What is the myth that you would like to bust for those waiting to enter the industry?
I'm not in the business of busting myths. I'm in the business of creating them. Myths add sizzle to people, brands and life. It gives people something to share and pass on. All I can say to the newcomers is follow the myths. Think for yourself. Find out for yourself. Seek your own truth. That's the reason you are here in the first place.
Did you have a myth on advertising before joining the industry? What was it and how did you develop that myth?
I was clueless when I joined advertising. I had no myths about the industry. But I had a myth about myself. I thought I was creative. People told me I wasn't. So I spent my early years trying to prove that I am creative. I'm still trying. I have lots more to discover. My myth is my fuel. My myth makes me me.
How did it get busted when you actually got into advertising?
I was fortunate that people didn't believe the myth about me. The myth that I was creative. But then one day I met this amazing man called Suresh Mullick. He publicly acknowledged me as being creative. He called me 'Youth of India'. I tried to live up to his belief about me. In time I lived out my own myth.
Any other observations that you'd like to share with the people looking to make a career in advertising?
I'd ask the freshers one question -- What's the myth you have about yourself? Your myth will give you energy. It will drive you, keep you hungry. And even if the creative directors who are judging you at Portfolio Night don't acknowledge your myth about yourself, it's okay. Go your way. Your myth will take you to where you belong. You can be great if you focus, believe and follow your myth.
Advertising is not just about hanging out with fancy models
Piyush Pandey, executive chairman and creative director-South Asia, Ogilvy & Mather India
What are the key aspects you would look for in a portfolio?
The ideation process, the freshness in thinking.
What are your views on the several myths people have about advertising and the industry in general?
The biggest myth is that you can express yourself the way you feel like. In reality there is a method to this madness and yet there is some madness to the method.
What is that myth that you would like to bust for those wanting to enter the industry?
The myth that I want to break is that advertising is not rocket science. End of the day this is serious selling of a product creatively.
Did you have a myth on advertising before joining the industry?
The myth that I had been told about, is that you get to hang out with fancy models. This is definitely not the truth. I've tried to break the myth by telling people that it's sheer hard work but they refuse to believe me.
How did it get busted when you actually got into advertising?
I think it got busted when I found that we spent more time running to client's office, running to media houses to deliver artworks, running to slide makers for big presentations. So I never got to see the fancy models that I could run after.
Any other observations you'd like to share with the people looking to make a career in advertising?
It is an exciting business because you're addressing and solving different things every week. This sheer variety is unlikely to come to you on a weekly basis in any other business. So if you have the passion, this is a great business to be in.
Never be attached to your ideas
Ravi Deshpande, chairman and chief creative officer, Contract Advertising
What are the key aspects you would look for in a portfolio?
When I look at a portfolio, I am usually most impressed by great craft, or at least the promise of great craft. At the same time, I look for simple, imaginative ideas that answer a particular need. It’s important that the work is in good taste. Creativity is most important. Yet there shouldn’t be a logical flaw in the way the idea is conceived.
What are your views on the various myths people have about advertising?
Many of the old myths about advertising are not relevant anymore. The world’s more transparent now. People know more about everything. I think people realise that advertising is not like they show it in Mad Men.
What is that myth that you would like to bust for those waiting to enter the industry?
That it’s just about great work. Nothing else matters. And great work requires a tremendous amount work, not just talent.
Did you have a myth about advertising before joining the industry?
I did not have a myth. I wanted to get into architecture. Advertising was the second choice. But that was then.
Any other observation that you’d like to share with the people looking to make a career in advertising?
1. Be nice to others. In today’s collaborative world, you need to be a great team player.
2. Don’t be too disillusioned by your talent. It is only 5% of the reason for your success.
3. Never be attached to your ideas. It is better to pre-empt the death of your favourite idea, and be prolific.
4. Concentrate most on your key craft. But read up, learn and stay interested in other disciplines.
A curious mind is what you need
Senthil Kumar, National Creative Director, JWT India
What are the key aspects that you would look for in a portfolio?
First, I would ask every aspiring young chap to showcase only 10 best pieces of work in the portfolio. This would force the candidate to be a judge of their own work first and help understand their point of view on advertising. Next, I would look for original ideas.
What are your views on the various myths people have about advertising and the industry in general?
Creative arts are amplified by mythology and the legends that supposedly live these myths. And this just goes to prove that people are really interested in this profession and the industry by spreading these myths through the oldest form of communication ever -- word of mouth.
What is that myth that you would like to bust for those waiting to enter the industry?
The myth that advertising is rocket science. I believe that common sense and a curious mind is all that you really need.
Did you have a myth on advertising before joining the industry? What was it and how did you develop that myth?
The myth that advertising is difficult if you don’t have training in the visual arts or creative writing.
How did it get busted when you actually got into advertising?
When I started believing in my ideas I lost all unnecessary doubts and just took the plunge.
Any other observations?
Stay hungry. Believe in your ideas. Never give up on an idea. And the best revenge is a better idea.
Zee offers 1:21 bonus of redeemable pref shares
This story first appeared in DNA Money edition on Thursday, May 23, 2013.
Zee Entertainment Enterprises Ltd offered a novel bonus to shareholders as part of its celebration for the completion of 20 years of the Zee brand as it reported a 10.7% year-on-year growth in net profit for the fourth quarter at Rs 180.4 crore.
The Q4 performance was driven by strong advertising and subscription revenues, which grew 15.5% and 13% at Rs 479.2 crore and Rs 454.6 crore, respectively.
Net profit for the full fiscal rose 21.6% at Rs 718.2 crore, while advertising revenues increased 24% at Rs 1,963.9 crore and subscription revenues 22.6% at Rs 1,623.4 crore.
Subhash Chandra, chairman, Zee, said, “The recent policy initiatives by the government and further reforms should help boost business sentiment and improve the investment climate. Despite the backdrop of a slowing economy in the last fiscal, television media industry has continued on its growth path.”
The company’s board has recommended a cash dividend of Rs 2 per share to celebrate the completion of 20 years of brand Zee.
In a unique approach to rewarding shareholders, the company board also announced distribution of Rs 2,000 crore through bonus issue of redeemable preference shares.
Atul Das, chief strategy officer, Zee, said that equity shareholders will be issued 21 preference shares of Rs 1 each for every one equity share held by a shareholder.
“It carries a dividend coupon of 6% per annum, which implies that every year on this amount shareholders will get 6% dividend and it has a tenure of eight years. Fourth year onwards, every year the company will redeem one-fifth of the nominal value of these preference shares,” said Das.
So for instance, taking Rs 2,000 crore as an approximate number, fourth year onwards Rs 400 crore will be paid back to the shareholders.
“It’s a committed pay to the shareholders. It’s basically setting out the agenda that the investor will receive the payouts every year till the tenure of these shares gets over,” said Das.
Consolidated operating revenues for Q4 rose 11% at Rs 964.3 crore. Operating profit for Q4 rose 51.4% at Rs 242.3 crore, while Ebitda margin stood at 25.1%. Operating profit for the full last fiscal rose 29% at Rs 954.3 crore, while total revenues rose 21.7% to Rs 3,699.6 crore.
Punit Goenka, managing director and chief executive officer, Zee, said the fiscal 2013 has been good — both on operating as well as financial parameters.
“Zee gained viewership share with improvement across genres, both in national and regional languages, which led to outperformance in advertising growth relative to industry.
We have also seen steady improvement in our sports business over the last three years.
While investment in sports continues, performance has improved substantially with better monetisation from subscription.”
The company board has also approved enhancement of FII investments in the company beyond the current limit of 49% up to the maximum sectoral limit allowed under applicable foreign direct investment regulations, subject to appropriate approvals.
Zee Entertainment Enterprises Ltd offered a novel bonus to shareholders as part of its celebration for the completion of 20 years of the Zee brand as it reported a 10.7% year-on-year growth in net profit for the fourth quarter at Rs 180.4 crore.
The Q4 performance was driven by strong advertising and subscription revenues, which grew 15.5% and 13% at Rs 479.2 crore and Rs 454.6 crore, respectively.
Net profit for the full fiscal rose 21.6% at Rs 718.2 crore, while advertising revenues increased 24% at Rs 1,963.9 crore and subscription revenues 22.6% at Rs 1,623.4 crore.
Subhash Chandra, chairman, Zee, said, “The recent policy initiatives by the government and further reforms should help boost business sentiment and improve the investment climate. Despite the backdrop of a slowing economy in the last fiscal, television media industry has continued on its growth path.”
The company’s board has recommended a cash dividend of Rs 2 per share to celebrate the completion of 20 years of brand Zee.
In a unique approach to rewarding shareholders, the company board also announced distribution of Rs 2,000 crore through bonus issue of redeemable preference shares.
Atul Das, chief strategy officer, Zee, said that equity shareholders will be issued 21 preference shares of Rs 1 each for every one equity share held by a shareholder.
“It carries a dividend coupon of 6% per annum, which implies that every year on this amount shareholders will get 6% dividend and it has a tenure of eight years. Fourth year onwards, every year the company will redeem one-fifth of the nominal value of these preference shares,” said Das.
So for instance, taking Rs 2,000 crore as an approximate number, fourth year onwards Rs 400 crore will be paid back to the shareholders.
“It’s a committed pay to the shareholders. It’s basically setting out the agenda that the investor will receive the payouts every year till the tenure of these shares gets over,” said Das.
Consolidated operating revenues for Q4 rose 11% at Rs 964.3 crore. Operating profit for Q4 rose 51.4% at Rs 242.3 crore, while Ebitda margin stood at 25.1%. Operating profit for the full last fiscal rose 29% at Rs 954.3 crore, while total revenues rose 21.7% to Rs 3,699.6 crore.
Punit Goenka, managing director and chief executive officer, Zee, said the fiscal 2013 has been good — both on operating as well as financial parameters.
“Zee gained viewership share with improvement across genres, both in national and regional languages, which led to outperformance in advertising growth relative to industry.
We have also seen steady improvement in our sports business over the last three years.
While investment in sports continues, performance has improved substantially with better monetisation from subscription.”
The company board has also approved enhancement of FII investments in the company beyond the current limit of 49% up to the maximum sectoral limit allowed under applicable foreign direct investment regulations, subject to appropriate approvals.
Thomas Cook to put its commercial spaces on sale
This story first appeared in DNA Money edition on Tuesday, May 21, 2013.
Travel and tour operator Thomas Cook (India) Ltd (TCIL) is selling some of its commercial spaces to raise money for working capital requirements.
The company is understood to have roped in international property consultant (IPC) Jones Lang LaSalle (JLL) as advisor for the office space transactions.
“We are always on the lookout for opportunities that may arise due to changes in the market for this domain,” said Madhavan Menon, MD of TCIL.
He, however, did not share details of the office spaces that may be sold and the kind of money that is being sought to be raised.
TCIL is understood to own around 32 properties or 1.26 lakh square feet (sq ft) of office space across the country. In addition, it reportedly owns over 60,000 sq ft and 43,000 sq ft in Mumbai and Delhi, respectively.
According to JLL’s monthly real estate monitor (May 2013), prime office space in a metro like Mumbai would typically cost anywhere between Rs 21,000 and Rs 30,000 per sq foot. In cities like Hyderabad, it is Rs 5,500-6,000 per sq foot. In Pune, it is Rs 4,750-5,000. Office space in Kolkata costs around Rs 18,000 per sq foot. In Delhi, the per sq foot rate is around Rs 31,500.
TCIL’s south Mumbai property itself is estimated to be worth up to Rs 250 crore.
In May last year, Fairbridge Capital (Mauritius) had acquired a 76.69% stake in TCIL from its erstwhile UK-based parent.
In February this year, TCIL diversified into executive search industry by acquiring a 74% stake in Ikya Human Capital Solutions, a staffing solutions company, for Rs 256 crore.
Travel and tour operator Thomas Cook (India) Ltd (TCIL) is selling some of its commercial spaces to raise money for working capital requirements.
The company is understood to have roped in international property consultant (IPC) Jones Lang LaSalle (JLL) as advisor for the office space transactions.
“We are always on the lookout for opportunities that may arise due to changes in the market for this domain,” said Madhavan Menon, MD of TCIL.
He, however, did not share details of the office spaces that may be sold and the kind of money that is being sought to be raised.
TCIL is understood to own around 32 properties or 1.26 lakh square feet (sq ft) of office space across the country. In addition, it reportedly owns over 60,000 sq ft and 43,000 sq ft in Mumbai and Delhi, respectively.
According to JLL’s monthly real estate monitor (May 2013), prime office space in a metro like Mumbai would typically cost anywhere between Rs 21,000 and Rs 30,000 per sq foot. In cities like Hyderabad, it is Rs 5,500-6,000 per sq foot. In Pune, it is Rs 4,750-5,000. Office space in Kolkata costs around Rs 18,000 per sq foot. In Delhi, the per sq foot rate is around Rs 31,500.
TCIL’s south Mumbai property itself is estimated to be worth up to Rs 250 crore.
In May last year, Fairbridge Capital (Mauritius) had acquired a 76.69% stake in TCIL from its erstwhile UK-based parent.
In February this year, TCIL diversified into executive search industry by acquiring a 74% stake in Ikya Human Capital Solutions, a staffing solutions company, for Rs 256 crore.
The Great Summer Escape to 'cool' spots spells travel boom
This story first appeared in DNA Money edition on Monday, May 20, 2013.
Rising mercury levels this summer are bringing glad tidings to the Indian travel and tourism industry. Forget the earlier doom-and-gloom predictions: firms in this sector are now confident of posting a 25% on-year growth this calendar year on the back of people’s penchant to travel to cooler climes to escape the scorching heat.
Citizens are travelling to Indian and overseas destinations far and wide, sources said.
Industry estimates suggest that the number of Indians travelling overseas is set to rise from around 1.5 crore at present to 5 crore by 2020.
A resurgent economy, upwardly mobile lifestyles and increasing discretionary income are driving travel and tourism, said industry experts.
Madhav Pai, director – leisure travel (outbound), Thomas Cook (India), said, “Irrespective of price hikes, Indians are travelling like never before. Clearly, travel is now a ‘must-do’ element in the Indian summer agenda.”
Karan Anand, head-relationships, Cox & Kings, said, “Domestic travel certainly continues to be the mainstay, growing at 30% annually. Outbound is not far behind with an on-year growth of close to 25%.”
Moderate to high growth rates are in evidence everywhere. For instance, Australia’s Tourism Forecasting Council predicts 1.75 lakh arrivals from India in 2013/14, a 9% increase over 2012.
From 41,000 Indian visitors in 2000, Australia received around 1.60 lakh visitors in 2012. Nishant Kashikar, country manager-India, Tourism Australia, said, “Arrivals from India are expected to perform well, with an average annual financial year growth rate of 7.2% through to 2020-21.”
Such figures are encouraging travel and airline companies to offer the world to travellers, in the form of early bird offers, complimentary stays, companion offers, kids-stay-free opportunities, free transfers, discounted sightseeing tours and promotional airfares.
Some of these are for overseas destinations, but they are priced more or less at the same level as that of domestic attractions.
These are driving a good chunk of Indian travellers to short-haul destinations in regions like the South-east Asia, Asia-Pacific and the Middle East.
Other higher priced packages, like the Rs 99,999-per-person week-long tours of Cox & Kings, target destinations like Switzerland, Italy, east European countries, Spain and France.
Of course, there are many takers because such packages include return economy class air ticket, taxes, visa charges, overseas travel insurance, accommodation with breakfast, sightseeing and inter-city train travel on the European Rail Network, said Anand.
If not A, then B, or C – that seems the resolve of Indian travellers these days, said Ashwini Kakkar, executive vice chairman, Mercury Travels. “The recent flash sales announced by a few carriers proved to be a boon for travellers who had already planned their holidays. And, thanks to declining petrol prices, those who were left out are now driving down to the destination with family. They are all holidaying as per their convenience.”
Summer’s momentum is expected to continue beyond the season with a brief pause in June when schools and colleges open. For, a different kind of travellers – double-income-no-kids couples and singles – undertake post-summer journeys. “Monsoon is a time when destinations like Goa and Kerala aggressively promote themselves,” said Pai.
Post-summer airfares are expected to drop, said Anand. “Any such drop would entice consumers to book during the traditional ‘off season’ like the monsoon. Our Drizzlers offering had shown interesting uptake in 2012, and we hope to replicate this success even more emphatically in 2013.”
Within India: Kashmir, Himachal Pradesh, the North East, the Andamans and other hill stations.
Outside India: South Africa, Canada, the Philippines, Australia and New Zealand are catching outbound travellers’ attention.
Europe and the US continue to be preferred destinations for the Indian traveller
Iceland, Greenland, Morocco, Canary Islands, Galapagos and Ecuador are on the travel radar this year.
Singapore, Malaysia, Thailand, Hong Kong, Macau, Dubai and Mauritius remain popular short-haul destinations
Rising mercury levels this summer are bringing glad tidings to the Indian travel and tourism industry. Forget the earlier doom-and-gloom predictions: firms in this sector are now confident of posting a 25% on-year growth this calendar year on the back of people’s penchant to travel to cooler climes to escape the scorching heat.
Citizens are travelling to Indian and overseas destinations far and wide, sources said.
Industry estimates suggest that the number of Indians travelling overseas is set to rise from around 1.5 crore at present to 5 crore by 2020.
A resurgent economy, upwardly mobile lifestyles and increasing discretionary income are driving travel and tourism, said industry experts.
Madhav Pai, director – leisure travel (outbound), Thomas Cook (India), said, “Irrespective of price hikes, Indians are travelling like never before. Clearly, travel is now a ‘must-do’ element in the Indian summer agenda.”
Karan Anand, head-relationships, Cox & Kings, said, “Domestic travel certainly continues to be the mainstay, growing at 30% annually. Outbound is not far behind with an on-year growth of close to 25%.”
Moderate to high growth rates are in evidence everywhere. For instance, Australia’s Tourism Forecasting Council predicts 1.75 lakh arrivals from India in 2013/14, a 9% increase over 2012.
From 41,000 Indian visitors in 2000, Australia received around 1.60 lakh visitors in 2012. Nishant Kashikar, country manager-India, Tourism Australia, said, “Arrivals from India are expected to perform well, with an average annual financial year growth rate of 7.2% through to 2020-21.”
Such figures are encouraging travel and airline companies to offer the world to travellers, in the form of early bird offers, complimentary stays, companion offers, kids-stay-free opportunities, free transfers, discounted sightseeing tours and promotional airfares.
Some of these are for overseas destinations, but they are priced more or less at the same level as that of domestic attractions.
These are driving a good chunk of Indian travellers to short-haul destinations in regions like the South-east Asia, Asia-Pacific and the Middle East.
Other higher priced packages, like the Rs 99,999-per-person week-long tours of Cox & Kings, target destinations like Switzerland, Italy, east European countries, Spain and France.
Of course, there are many takers because such packages include return economy class air ticket, taxes, visa charges, overseas travel insurance, accommodation with breakfast, sightseeing and inter-city train travel on the European Rail Network, said Anand.
If not A, then B, or C – that seems the resolve of Indian travellers these days, said Ashwini Kakkar, executive vice chairman, Mercury Travels. “The recent flash sales announced by a few carriers proved to be a boon for travellers who had already planned their holidays. And, thanks to declining petrol prices, those who were left out are now driving down to the destination with family. They are all holidaying as per their convenience.”
Summer’s momentum is expected to continue beyond the season with a brief pause in June when schools and colleges open. For, a different kind of travellers – double-income-no-kids couples and singles – undertake post-summer journeys. “Monsoon is a time when destinations like Goa and Kerala aggressively promote themselves,” said Pai.
Post-summer airfares are expected to drop, said Anand. “Any such drop would entice consumers to book during the traditional ‘off season’ like the monsoon. Our Drizzlers offering had shown interesting uptake in 2012, and we hope to replicate this success even more emphatically in 2013.”
Popular destinations
Within India: Kashmir, Himachal Pradesh, the North East, the Andamans and other hill stations.
Outside India: South Africa, Canada, the Philippines, Australia and New Zealand are catching outbound travellers’ attention.
Europe and the US continue to be preferred destinations for the Indian traveller
Iceland, Greenland, Morocco, Canary Islands, Galapagos and Ecuador are on the travel radar this year.
Singapore, Malaysia, Thailand, Hong Kong, Macau, Dubai and Mauritius remain popular short-haul destinations
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