A Postcard From...India: Smell the confidence


16 Dec 2014 | Arbinder Chatwal, BDO

IN May of this year, the world's largest democracy went to the polls to vote for a new government.

A record-breaking turnout was reported. The Indian citizen voted for change, hope and progress. After almost 25 years, the people of India gave a decisive mandate to a single party (and almost a single individual) Mr. Narendra Modi, the head of right wing, Bharitya Janta Party (BJP)

On my trip to India, while leading a trade delegation organised by the London Mayor's office early last month, I could smell the confidence, pride and optimism in the air. Though not visible on the ground or in numbers yet, the change in momentum is evident. Heading an almost presidential form of government, Modi has caught the imagination of Indians and the world. Starting with a hardnosed, no nonsense approach towards the administration, he has galvanised the bureaucracy and his own ministry into action. He is smartly concentrating on plucking low hanging policy fruits like energy prices, FDI liberalization in defense, insurance, real estate etc., to make a clear statement of intent. Power & Coal sector reforms; GST & interest rate reduction are clearly projected on the visible horizon.

Flights in and out of India are no longer just full of holiday travelers. Five star business hotels in Delhi & Mumbai are improving occupancy & re-positioning for more business travelers than ever before. Coffee shops are full of on-the-move meetings. Professional services firms - Law & Accounting, are buzzing with M&A and India entry discussions. BDO India, our network member firm in India, has doubled office capacity in Mumbai & Pune and has its partner strength navigating advisory solutions to national and global clients.

Industry sectors are indicating upward graphs amongst which infrastructure, health care, education, tourism, textiles, IT & auto ancillaries are the sectors to look out for. Some of the latest catch phrases in India are "smart cities", "industrial corridors" and "Make in India" - the campaigns initiated and rolled out in a quest for a transforming nation.

Alongside me, the trade delegation - a group of corporates from different sectors exploring the India business landscape for potential entry/expansion opportunities, sensed an outlook towards the fiscal, monetary, administrative reforms unfurling in India with this new change. The Corporates, all defined as SMEs and having an annual turnover of less than £50 million and fewer than 250 employees, came from sectors such as construction, software and computer services, education and training, renewable energy and creative and media.

One of the delegates, a BDO UK managed client, Aspen Pumps said: "As an SME looking for opportunities in international markets, Aspen Pumps was delighted to be chosen to be part of the delegation that went to Mumbai for the Indian marketing and strategy programme. The programme was immensely helpful in expanding my understanding of how to penetrate the market and the business opportunities in India. The event was extremely well organised and well put together and I commend the organisers for the structured and well planned agenda throughout the trip. I look forward to putting my new found knowledge to good use in our Indian marketing strategy and look forward to reporting back on our continued expansion in this growing economy."

BDO UK envisages to play the role of this pivotal catalyst easing India entry from an overall perspective, while our India member firm would take up the thread to not only help establish but aid in the growth of business operations in the homeland.

India Today: The intensity is there. The intent is serious. Capitalising on the momentum is the clear priority.

Arbinder Chatwal is an audit directors at BDO

Off Balance: Tech stats befuddle Captain Obvious

Captain Obvious

01 Dec 2014 | Off Balance

OFF BALANCE has taken a month-long hiatus from handing out a Captain Obvious Award to the most inane or, erm, obvious press release that we'd been unfortunate enough to receive.

Thankfully, our friends at Randstad Technologies have helped us back on the Captain Obvious train heading to a place of bad stats.

Amazingly, workers in IT chose ‘IT' as the most fulfilling industry to work in. Most other people chose health or care. Hmm ... what kind of people work in IT? Those who like to memorise server locations? Run diagnostics on your Windows NT-addled laptop? Play Quake during lunch?

They can't do anything else. They don't want to do anything else. Telling us that IT people are a bit geeky and have different views to the rest of the population is worthy of the Captain Obvious Award.

Well done, Randstad Technologies.

Off Balance: Twitter CFO accidentally tweets M&A plans


25 Nov 2014 | Off Balance

PROFESSIONALS and execs are always being urged to embrace social media and be more open and transparent, but one CFO who should have known about the risks of using social media is Twitter CFO Anthony Noto.

And if Noto wasn't aware of the dangers of being fast and loose on the social media platform, he is now. On Monday, Noto committed a classic Twitter faux par after he appeared to have accidentally sent a public tweet which disclosed confidential corporate strategy plans around a potential acquisition target.

"I still think we should buy them. He is on your schedule for Dec 15 or 16 -- we will need to sell him. I have a plan," Noto tweeted. The offending tweet was later deleted.

It is unclear how the error took place, although Twitter spokesman Jim Prosser confirmed to Bloomberg that Noto was trying to send the message privately. The slip up is commonly referred to as a "DM fail," for "direct message fail."

Still, Off Balance loves to see a CFO using his own company's products, but will understand if Noto chooses to revise that strategy.

Off Balance: Fans race to Caterham's rescue

Charles Pic at the wheel of the Caterham CT03 in Brazil. Credit - Caterham F1 Team

10 Nov 2014 | Off Balance

OFF BALANCE HAS ALWAYS loved heartwarming tales of battling back against the odds [probably too many Hollywood films - Ed], and so the news that stricken Formula One team Caterham could be returning to the grid in time for the Abu Dhabi Grand Prix on 23 November certainly warmed the cockles.

But what's more amazing is that its fans are responsible for the team's new lease of life, after - for the first time ever - crowdfunding the project.

Thus far, more the £1m of the £2.35m required has been raised, with donations earning fans merchandise ranging from branded caps to cars' nose cones, while a mere £45,000 could see you treated to corporate hospitality and a chance to meet drivers Kamui Kobayshi and Marcus Ericsson.

Finbarr O'Connell, joint administrator of Caterham Sports Limited (CSL) and a partner at Smith & Williamson, said: "This is the first time, to the best of my knowledge, that a restructuring process has used crowdfunding as a step forward in getting a business back on its feet. We are really excited about this which we feel is an entrepreneurial approach and optimistic of a positive outcome."

But Formula One boss Bernie Ecclestone described the scheme as "a disaster".

"The concept is wrong and shouldn't be allowed," he said. "If people can't afford to be in Formula One, they have to find something else to do."

Anyone wishing to donate can do so here.

A postcard from… China - The future is upon us

Boat in China

05 Nov 2014 | Kim Hayward, BDO

FOR the first time ever, BDO held its Biennial International Partners' conference in Asia, well in China to be more precise, hosted by BDO Lixin, our member firm in China, for close to 600 people from across the globe. While I am lucky to visit this diverse country most years, for many this was their first time in China. Whether seeing the country for the first time, or the fiftieth, I still share the same sense of amazement and awe as the first timers, with each visit.

I took four days looking around Beijing, taking in all that it has to offer, from the worst (three days in smog that was 18 times worse than the recommended pollution level), to the best, (the wonders of the Forbidden City and the Great Wall of China). I was struck by the vibrant buzz of young, sophisticated Chinese people enjoying shopping, dining and socialising, but also by the vast numbers of older Chinese tourists at the Great Wall in Badaling, many from Mongolia and far flung corners of China, who are now wealthy enough to go on vacation.

The unavoidable feeling of increasing wealth was really underlined following the short flight from Beijing to Shanghai. On touchdown I was surprised to see just how much the city has changed. The skyline, in particular, reflects the economic growth in the region. The iconic 46-storey Hang Seng Bank Tower is now dwarfed by the construction of the twisting Shanghai Tower with its 121 floors. The Bund was as hectic as ever, and the Shanghai International Conference Centre, where the BDO Biennial was held, was enormous and resplendent.

At the conference itself, our guest speaker, Haiyan Wang, chairman of the China-India Institute, gave a blend of historical perspectives on China, her recollections as a child under the Cultural Revolution and her insights on the road to growth that China is now on after centuries of slow progress, having failed to continue the momentum built up as the world's leading economy in the 1400's.

Despite the fact that in recent years China's GDP has dipped from double digit growth to just over 7%, it is still expected to overtake the USA by circa 2025. The less eye-catching growth experienced by developed economies is not the case here and the country is still on its way to becoming the world's leading economy once more, even with a slowdown.

On a more cautionary note, Haiyan also reminded us of the legacy of the one child policy, their population will age and shrink within a generation or two, there will be less workers to the point that the GDP they earn and accumulate will be needed to provide substantial welfare and pensions and in the shorter term, they will still need to import food and, interestingly, water.

So what are the Chinese doing about this? The recognition that foreign investment will help to maintain strong GDP in coming years was a strong theme throughout conversations taking place during the conference.

I had the pleasure of meeting representatives of the Xiuzhou District of the city of Jiaxing, a small city of 4.5 million people on the outskirts of Shanghai, a new, green and exciting city. Larger than the UK's second, third and fourth largest cities put together, yet not even in China's top 20, Jiaxing has an economic plan that has zoned the sectors it wants to attract and the countries they want to approach for inward investment. One of my colleagues astutely observed that if they wished to attract German companies with German management, they might need to think about opening a school that taught in German. Party Secretary and Director, Li Chenyaun, responded saying "We have one already".

The message is clear: China's economic boom is not being viewed within the country as a one-off event. It is committed to using this as a foundation for long-term growth, for both domestic companies and inward investment.

We are experiencing this first hand. BDO managing partner Simon Michael's last Postcard from China outlined the size of our Chinese operations at 7,500 people. BDO Lixin now stands at close to 8,500 people, one of the largest international accountancy firms in China, and by reference to their client portfolio, they would be seen as number three in their market! While we were in Shanghai, we witnessed the signing of the agreement where BDO International Limited and BDO China have agreed to invest in BDO Hong Kong, which is expected to contribute to the further growth of BDO in China and Hong Kong. This clearly reflects the fast growing demand for business advisory and accountancy services in the region. The future is upon us.

Kim Hayward, international liaison partner, BDO 

Off Balance: From number-crunching to berry-crushing

Pinkster Gin

21 Oct 2014 | Off Balance

WHILE SOME finance chiefs might like to claim that they can turn water into wine, others will state that such alchemy and, dare we say, ‘creativity' are best avoided around the sacred Excel spreadsheets.

That one former FD used his experience and technical excellence to turn water into wine is great, though. Well, he made some gin at a profit, anyway.

Stephen Marsh, then an FD at a creative agency, had to stop drinking wine and beer due to yeast intolerance. Obviously, this set Stephen's brain into overdrive about mitigating this situation.

He created a raspberry gin he could imbibe, and that proved so popular with friends that they persuaded him to take the commercial venture path, reports the Cambridge News.

And so popular was this gin with the public that he left his job in June to go full-time into running his business. With OB acutely aware of finance chiefs' love of a tipple, we're amazed it hasn't been done more often.

Off Balance: Who let the dogs in? Wetherspoons asks FRC


14 Oct 2014 | Off Balance

OFF BALANCE loves a JD Wetherspoon press release.

They're usually published in the jokey comic sans font, which makes them look not very corporate. Which is fine, there's too much corporate stuff going around anyway.

And it seems JD Wetherspoon aren't happy with ‘corporate stuff' either. Or accounting watchdog the FRC.

In an article by JD Wetherspoon chairman Tim Martin for Propel, he castigates current corporate governance rules as creating too few execs, and not enough experience on the board.

"The unholy combination of a majority of part-time non-executives, including the chairman, with a maximum of nine years' tenure, and CEOs who average only four or five institutionalises these weaknesses," states Martin in the article for Propel.

"The composition of the board of the Financial Reporting Council, which oversees governance, mirroring the non-executives on PLC boards, consists almost entirely of "City" types, with little experience of civvy street, let alone pub or supermarket companies."

Wow, Martin is really venting his spleen here. And speaking of watchdogs, he begins the piece with: "Woof, woof! What's that at the boardroom door? Why, it's the [corporate governance] dog that hasn't barked - until now."

A fascinating read, click here for more.

Off Balance: Cleaner comes good at Adnams

Pint of beer

08 Oct 2014 | Off Balance

SO THIS IS a bit of an off-the-wall Off Balance article; it's not about financial impropriety or incompetence. Or naked CFOs.

Instead it's about Karen Hester. You probably don't know her; in 1988 she was a part-time cleaner at brewery and pubs business Adnams. But with her logistical and transport knowledge gleaned from her time in the Army, she worked her way up the ranks.

Hester has now been brought onto the Suffolk brewer's board as executive director, having headed up operations since 2007.

"Adnams is a fantastic company which firmly believes in nurturing and developing its own people I feel honoured and extremely proud to be the first female executive director to join the board and am looking forward to continuing to support others to develop their own careers," said Karen this morning.

As Off Balance wipes the tears off of the keyboard, we can only look back ourselves at how we've progressed since being caught rifling through Financial Director's bins. Twenty years on, it doesn't feel as if we've moved on as far as Hester, to be honest, particularly as Off Balance is mainly in charge of putting the bins out...hmm.

But, congratulations anyway Karen, a great story.

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