Blog Posts by Deepak Shenoy

  • No Sugar

    With arrears of nearly Rs 6,800 crore, a state relief package of Rs 2,100 crore and a soft loan of Rs 1,200 from the Centre is indeed much-needed respite for the private sugar mills of Uttar Pradesh (UP). But UP’s sugar policy perpetuates the malaise, and until that is addressed, the mills will keep needing lifelines like these. The state plays cane politics—sugar farmers are a key votebank—by fixing a state-advised price (SAP) at which mills must buy sugar cane, and thus will have to pay to keep the mills afloat. The SAP, at R280 per quintal, is much higher than the Fair and Remunerative Price (FRP) of Rs 220 per quintal fixed by the Centre.  This has led to a situation where the effective cane cost, in FY15, was higher than the ex-mill price of sugar. And, in any case, the relief may fall way short any real impact, given how mills will have to pay back loans first, and that would leave them and the farmers precious little.

    The Rangarajan Committee had recommended that cane prices be

    Read More »from No Sugar
  • The tech CEO whose resignation letter went viral has found a new job

    Max Schireson(YouTube)
    Max Schireson

    Max Schireson is the former CEO of MongoDB, the database software startup last reported to be worth $1.6 billion. 

    Although MongoDB grew its revenue 30X and raised $220 million during his four years there, most people remember him as the man behind a resignation letter that went totally viral last year, when he stepped down from the CEO position to spend more time with his family. The impassioned letter got attention for its candor about the modern demands and realities of work-life balance. 

    But roughly 11 months after freeing himself from a grueling work life, Schireson announced on Thursday that he's back in a full-time position at VC firm Battery Ventures.

    "I have been doing less work, but I am ready to ramp up that part of my life a bit. I’m starting a job as an Executive in Residence at Battery Ventures," Schireson wrote in a blog post.

    In his new job, Schireson said he'll be helping Battery Ventures find attractive startups, while working with

    Read More »from The tech CEO whose resignation letter went viral has found a new job
  • Thousands of gallons of oil spilled in Mississippi River

    COLUMBUS, Ky. (AP) — Part of the Mississippi River was closed as crews investigated an oil spill caused by the collision of two tow boats, the U.S. Coast Guard said Thursday.

    The collision Wednesday evening near Columbus, Kentucky, damaged at least one barge carrying clarified slurry oil. The cargo tank was ruptured, causing thousands of gallons of oil to spill into the river, the Coast Guard said.

    No injuries were reported.

    The river is closed from mile markers 938 to 922, Petty Officer Lora Ratliff said.

    The barge was carrying approximately 1 million gallons, but the breach was only in one area, affecting just one of its six tanks, Ratliff said. That tank holds 250,000 gallons, and Lt. Takila Powell said a little more than 120,000 gallons spilled into the river.

    The Coast Guard said it was working with the barge owner, Inland Marine Services, and an oil spill response organization. Inland Marine Services referred calls to its public relations person, Patrick Crowley, who did not return

    Read More »from Thousands of gallons of oil spilled in Mississippi River
  • Asian stocks mixed in choppy trade; US jobs data eyed

    Asian stocks traded mixed on the final trading day of the week, mirroring the lead from Wall Street overnight. Market volatility was high in early trade as investors awaited the nonfarm payrolls report for August that may play a crucial role in the Federal Reserve's decision about when to lift interest rates.

    China's stock market remains closed for a second day as the country commemorates the end of World War Two. The absence of China-induced market volatility could bode well for sentiment in the region. However, neighboring Hong Kong markets will reopen for trade today after being shut on Thursday.

    Overnight, major U.S. indexes ended mostly higher. The Nasdaq Composite (^IXIC) shed 0.4 percent, while the blue-chip Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) and S&P 500 (CME:Index and Options Market: .INX) ticked up 0.1 percent each.

    Nikkei sags 0.9%

    Japan's Nikkei 225 (Nihon Kenzai Shinbun: .N225) index fell into the red after briefly notching up

    Read More »from Asian stocks mixed in choppy trade; US jobs data eyed
  • Explaining Accounting Conservatism

    Accounting conservatism is a principal that requires accounting rules be applied with high degrees of verification.

    Accountants practicing conservatism must favor solutions that reflect the least favorably on a company’s bottom line. If an accountant has two solutions to choose from when facing an accounting challenge, the one that yields inferior numbers should be selected.

    For example, accounting conservatism requires overestimating a company’s allowance for doubtful accounts and losses. If a company’s sales staff believes that a group of receivables will have a bad debt percentage of 4%, but management believes that number will be closer to 6%, then accounting conservatism goes with the 6% estimate, which is the position that records the least income and largest expense.

    In accounting conservatism, losses and expenses are recorded as they’re incurred and profits require high degrees of verification before they can be claimed. Strict criteria for claiming profits are a common form of

    Read More »from Explaining Accounting Conservatism
  • Spectrum policy: Sharing’s fine, allow trading next

    India has over 970 million wireless subscribers and over 300 million internet subscribers today. We have a proactive government at the Centre that has laid an ambitious roadmap for a digital future. And wireless service is still at the core of all subscriber growth. It is imperative that adequate and rationally-priced spectrum is made available to the sector.

    Against this background, the government’s decision of allowing spectrum sharing is a welcome move. This comes at a time when the debates around call-drops, quality of service, consumer experience, and spectrum availability have become more pronounced. Thus, it is the opportune time to examine how spectrum sharing will contribute to the future of seamless wireless connectivity in India, as well as a reality check on the benefits these guidelines are likely to accrue for all players in the ecosystem.

    India and its telecom market are both truly unique behemoths. Many global parallels do not hold true in the Indian context, spectrum

    Read More »from Spectrum policy: Sharing’s fine, allow trading next
  • Letters to the editor

    Realty bites

    This in reference to the report “Builders in trouble as unsold flats continue to pile up” (September 3, FE). The burgeoning inventories of the realty sector point to shrinking demand owing to a lack of disposable income among the people, and the non-availability of reasonably-priced loans. Despite the large realty inventories, housing prices are still not affordable to consumers, barring a few high net-worth individuals. The high level of the inventories are putting pressure on the profit margins of the builders, leading to default in servicing the borrowings from banks, which, in turn, are pushing up the level of bad assets of banking industry. To resolve the issue, the government and Reserve Bank must look for sector-specific relaxations in the norms relating to non-performing assets, as well as implementing affordable rates of interest and relaxed repayment schedules for builders and developers to enable them to service the bank borrowings without defaults. Likewise, in

    Read More »from Letters to the editor
  • Pulses can restore India’s nutrition needs

    India’s score on food security is nothing short of scandalous. Despite growing income and political stability—factors which are primary drivers of universal food availability—food security continues to be a major concern. The latest Global Food Security Index has ranked India at 66th position, much below China, which is at 38th position. The study also emphasises the low quantities of quality protein in India’s food supply. The average per capita consumption of quality protein in India is 37 gm, compared to 47 gm in neighbouring Pakistan and 38 gm in Sri Lanka.

    As countries rise up in the development hierarchy, food consumption as a share of household expenditure goes down. In high income countries, typically, this is around 20%. At an all-India level, the share of food to total household expenditure stands at almost 55% and the share of food to total income is 39% (ICE 360 Survey 2014). In fact, an analysis of the composition of food to non-food share of household expenditure over a

    Read More »from Pulses can restore India’s nutrition needs
  • SINGAPORE (Reuters) - Gold held declines from a two-day losing streak on Friday, ahead of a crucial U.S. jobs report as traders waited for clues about the timing of a Federal Reserve rate hike.

    FUNDAMENTALS

    * Spot gold (XAU=) was little changed at $1,125.31 an ounce by 0040 GMT, after losing about 1 percent in the last two sessions. The metal fell to a one-week low of $1,121.35 on Thursday.

    * U.S. gold (GCcv1) was also firm at $1,124.90.

    * Bullion came under pressure on Thursday as the dollar ticked higher after European central bankers cut economic growth targets and left interest rates unchanged.

    * The greenback also gained on U.S. weekly jobless claims data that signalled strength in the labour markets, the day before Friday's August jobs report, which may be crucial for Fed policymakers considering raising interest rates.

    * Strong economic data could prompt the Fed to raise rates

    Read More »from Gold retains two-day decline ahead of U.S. jobs data
  • Presence of PE is a must to tax FIIs\/FPIs

    The controversy on FIIs/FPIs—with 68 cases and Rs 603 crore for levy of minimum alternate tax (MAT)—has been put to rest with the finance minister affirming the recommendations of AP Shah committee’s report that MAT shall not apply to FIIs/FPIs for the period prior to April 1, 2015.

    Section 381 of the Companies Act, 2013 (earlier Section 591-594 of the Companies Act, 1956), specifies that only foreign companies are required to create a balance sheet and profit and loss account in such form containing such particulars as prescribed. Section 2(42) defines foreign company to mean any body corporate incorporated outside India which (1) has a place of business in India whether by itself or through an agent physically or through electronic mode and; (2) conducts any business activity in India in any other manner.

    Thus, for the applicability of MAT on FIIs/FPIs—being a company or body corporate—the existence of permanent establishment (PE) is a must. FIIs/FPIs do not have any office or

    Read More »from Presence of PE is a must to tax FIIs\/FPIs

Blog Posts by Deepak Shenoy

  • No Sugar

    With arrears of nearly Rs 6,800 crore, a state relief package of Rs 2,100 crore and a soft loan of Rs 1,200 from the Centre is indeed much-needed respite for the private sugar mills of Uttar Pradesh (UP). But UP’s sugar policy perpetuates the malaise, and until that is addressed, the mills will keep needing lifelines like these. The state plays cane politics—sugar farmers are a key votebank—by fixing a state-advised price (SAP) at which mills must buy sugar cane, and thus will have to pay to keep the mills afloat. The SAP, at R280 per quintal, is much higher than the Fair and Remunerative Price (FRP) of Rs 220 per quintal fixed by the Centre.  This has led to a situation where the effective cane cost, in FY15, was higher than the ex-mill price of sugar. And, in any case, the relief may fall way short any real impact, given how mills will have to pay back loans first, and that would leave them and the farmers precious little.

    The Rangarajan Committee had recommended that cane prices be

    Read More »from No Sugar
  • The tech CEO whose resignation letter went viral has found a new job

    Max Schireson(YouTube)
    Max Schireson

    Max Schireson is the former CEO of MongoDB, the database software startup last reported to be worth $1.6 billion. 

    Although MongoDB grew its revenue 30X and raised $220 million during his four years there, most people remember him as the man behind a resignation letter that went totally viral last year, when he stepped down from the CEO position to spend more time with his family. The impassioned letter got attention for its candor about the modern demands and realities of work-life balance. 

    But roughly 11 months after freeing himself from a grueling work life, Schireson announced on Thursday that he's back in a full-time position at VC firm Battery Ventures.

    "I have been doing less work, but I am ready to ramp up that part of my life a bit. I’m starting a job as an Executive in Residence at Battery Ventures," Schireson wrote in a blog post.

    In his new job, Schireson said he'll be helping Battery Ventures find attractive startups, while working with

    Read More »from The tech CEO whose resignation letter went viral has found a new job
  • Thousands of gallons of oil spilled in Mississippi River

    COLUMBUS, Ky. (AP) — Part of the Mississippi River was closed as crews investigated an oil spill caused by the collision of two tow boats, the U.S. Coast Guard said Thursday.

    The collision Wednesday evening near Columbus, Kentucky, damaged at least one barge carrying clarified slurry oil. The cargo tank was ruptured, causing thousands of gallons of oil to spill into the river, the Coast Guard said.

    No injuries were reported.

    The river is closed from mile markers 938 to 922, Petty Officer Lora Ratliff said.

    The barge was carrying approximately 1 million gallons, but the breach was only in one area, affecting just one of its six tanks, Ratliff said. That tank holds 250,000 gallons, and Lt. Takila Powell said a little more than 120,000 gallons spilled into the river.

    The Coast Guard said it was working with the barge owner, Inland Marine Services, and an oil spill response organization. Inland Marine Services referred calls to its public relations person, Patrick Crowley, who did not return

    Read More »from Thousands of gallons of oil spilled in Mississippi River
  • Asian stocks mixed in choppy trade; US jobs data eyed

    Asian stocks traded mixed on the final trading day of the week, mirroring the lead from Wall Street overnight. Market volatility was high in early trade as investors awaited the nonfarm payrolls report for August that may play a crucial role in the Federal Reserve's decision about when to lift interest rates.

    China's stock market remains closed for a second day as the country commemorates the end of World War Two. The absence of China-induced market volatility could bode well for sentiment in the region. However, neighboring Hong Kong markets will reopen for trade today after being shut on Thursday.

    Overnight, major U.S. indexes ended mostly higher. The Nasdaq Composite (^IXIC) shed 0.4 percent, while the blue-chip Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) and S&P 500 (CME:Index and Options Market: .INX) ticked up 0.1 percent each.

    Nikkei sags 0.9%

    Japan's Nikkei 225 (Nihon Kenzai Shinbun: .N225) index fell into the red after briefly notching up

    Read More »from Asian stocks mixed in choppy trade; US jobs data eyed
  • Explaining Accounting Conservatism

    Accounting conservatism is a principal that requires accounting rules be applied with high degrees of verification.

    Accountants practicing conservatism must favor solutions that reflect the least favorably on a company’s bottom line. If an accountant has two solutions to choose from when facing an accounting challenge, the one that yields inferior numbers should be selected.

    For example, accounting conservatism requires overestimating a company’s allowance for doubtful accounts and losses. If a company’s sales staff believes that a group of receivables will have a bad debt percentage of 4%, but management believes that number will be closer to 6%, then accounting conservatism goes with the 6% estimate, which is the position that records the least income and largest expense.

    In accounting conservatism, losses and expenses are recorded as they’re incurred and profits require high degrees of verification before they can be claimed. Strict criteria for claiming profits are a common form of

    Read More »from Explaining Accounting Conservatism
  • Spectrum policy: Sharing’s fine, allow trading next

    India has over 970 million wireless subscribers and over 300 million internet subscribers today. We have a proactive government at the Centre that has laid an ambitious roadmap for a digital future. And wireless service is still at the core of all subscriber growth. It is imperative that adequate and rationally-priced spectrum is made available to the sector.

    Against this background, the government’s decision of allowing spectrum sharing is a welcome move. This comes at a time when the debates around call-drops, quality of service, consumer experience, and spectrum availability have become more pronounced. Thus, it is the opportune time to examine how spectrum sharing will contribute to the future of seamless wireless connectivity in India, as well as a reality check on the benefits these guidelines are likely to accrue for all players in the ecosystem.

    India and its telecom market are both truly unique behemoths. Many global parallels do not hold true in the Indian context, spectrum

    Read More »from Spectrum policy: Sharing’s fine, allow trading next
  • Letters to the editor

    Realty bites

    This in reference to the report “Builders in trouble as unsold flats continue to pile up” (September 3, FE). The burgeoning inventories of the realty sector point to shrinking demand owing to a lack of disposable income among the people, and the non-availability of reasonably-priced loans. Despite the large realty inventories, housing prices are still not affordable to consumers, barring a few high net-worth individuals. The high level of the inventories are putting pressure on the profit margins of the builders, leading to default in servicing the borrowings from banks, which, in turn, are pushing up the level of bad assets of banking industry. To resolve the issue, the government and Reserve Bank must look for sector-specific relaxations in the norms relating to non-performing assets, as well as implementing affordable rates of interest and relaxed repayment schedules for builders and developers to enable them to service the bank borrowings without defaults. Likewise, in

    Read More »from Letters to the editor
  • Pulses can restore India’s nutrition needs

    India’s score on food security is nothing short of scandalous. Despite growing income and political stability—factors which are primary drivers of universal food availability—food security continues to be a major concern. The latest Global Food Security Index has ranked India at 66th position, much below China, which is at 38th position. The study also emphasises the low quantities of quality protein in India’s food supply. The average per capita consumption of quality protein in India is 37 gm, compared to 47 gm in neighbouring Pakistan and 38 gm in Sri Lanka.

    As countries rise up in the development hierarchy, food consumption as a share of household expenditure goes down. In high income countries, typically, this is around 20%. At an all-India level, the share of food to total household expenditure stands at almost 55% and the share of food to total income is 39% (ICE 360 Survey 2014). In fact, an analysis of the composition of food to non-food share of household expenditure over a

    Read More »from Pulses can restore India’s nutrition needs
  • SINGAPORE (Reuters) - Gold held declines from a two-day losing streak on Friday, ahead of a crucial U.S. jobs report as traders waited for clues about the timing of a Federal Reserve rate hike.

    FUNDAMENTALS

    * Spot gold (XAU=) was little changed at $1,125.31 an ounce by 0040 GMT, after losing about 1 percent in the last two sessions. The metal fell to a one-week low of $1,121.35 on Thursday.

    * U.S. gold (GCcv1) was also firm at $1,124.90.

    * Bullion came under pressure on Thursday as the dollar ticked higher after European central bankers cut economic growth targets and left interest rates unchanged.

    * The greenback also gained on U.S. weekly jobless claims data that signalled strength in the labour markets, the day before Friday's August jobs report, which may be crucial for Fed policymakers considering raising interest rates.

    * Strong economic data could prompt the Fed to raise rates

    Read More »from Gold retains two-day decline ahead of U.S. jobs data
  • Presence of PE is a must to tax FIIs\/FPIs

    The controversy on FIIs/FPIs—with 68 cases and Rs 603 crore for levy of minimum alternate tax (MAT)—has been put to rest with the finance minister affirming the recommendations of AP Shah committee’s report that MAT shall not apply to FIIs/FPIs for the period prior to April 1, 2015.

    Section 381 of the Companies Act, 2013 (earlier Section 591-594 of the Companies Act, 1956), specifies that only foreign companies are required to create a balance sheet and profit and loss account in such form containing such particulars as prescribed. Section 2(42) defines foreign company to mean any body corporate incorporated outside India which (1) has a place of business in India whether by itself or through an agent physically or through electronic mode and; (2) conducts any business activity in India in any other manner.

    Thus, for the applicability of MAT on FIIs/FPIs—being a company or body corporate—the existence of permanent establishment (PE) is a must. FIIs/FPIs do not have any office or

    Read More »from Presence of PE is a must to tax FIIs\/FPIs

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