FinXpress

Company in Focus:

Cognizant Technology

Solutions

2

StartUp in focus:

Pocket Gems

3

Markets this Week 4

News of the Week 5

CAN YOU SOLVE IT? 7

DECEMBER 04, 2011

Institute Of Management Technology

Ghaziabad

Sources of Data:

HDFCsecurities

Economic Times

The Hindu

Rediff Money

MoneyControl.com

Financial Express

Indiapetro

IOCL

Inside this issue:

Social gaming to the mobile platform

Cognizant is a leading provider of information technology, consulting, and business process outsourcing services dedicated to helping the world's leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant has over 50 delivery centers worldwide and 130,000 employees as of September 30, 2011, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world Cognizant has five additional delivery centers in the United States of America: Bentonville, Arkansas; Bridgewater, New Jersey; Chicago, Illinois; Holliston, Massachusetts; and Phoenix, Arizona. The company also has local, regional and global delivery centers in the UK, Europe, India, China, The Philippines, Canada, Argentina, and Mexico. The majority of the company’s employees are based in India: Chennai, Coimbatore, Kolkata, Bangalore, Hyderabad, Pune, Mumbai, Gurgaon and Cochin. About the company Cognizant was listed on NASDAQ in 1998 and moved to the NASDAQ-100 Index in 2004. After the close of trading on 16 November 2006, Cognizant moved from the mid cap S&P 400 to the S&P 500. The company's revenue from IT services is split roughly evenly between application development and application maintenance. Cognizant's largest horizontals are Testing and DW/BI. Its business process outsourcing unit leans towards "higher-end" services i.e. work that involves unique skills and domain knowledge, such as legal services or healthcare claims processing rather than simple voice-based support services. Revenue Revenue for the third quarter of 2011 rose to $1.601 billion, up 31.6% from $1.217 billion in the third quarter of 2010. GAAP net income was $227.1 million compared to $203.7 million in the third quarter of 2010. Major portion of the revenue for Cognizant is derived out of clients from US. Revenue Mix North America: 77.2%, Europe: 19.2%, Rest of World: 3.6%. Financial Services: 42.3%, Health-care: 25.9%, Manufacturing, Retail & Logistics: 18.6%, Communications, Information, Media & Entertainment and Technology: 13.2% Future Strategy IT budgets for 2012 to be flat to slightly up and expects pricing to be up by a little, though not by as much as in 2011. The company has traditionally worked with lower margins than rivals Infosys and Tata Consultancy to gain market share, and has grown 42 percent in the last year even as other IT services companies grapple with the slowing economy. Healthcare, which contributes about 26 percent of revenue, and smaller verticals like retail and manufacturing is expected to grow at a faster rate than financial services. With about half its revenue coming from the financial services segment, the company has been trying to reduce its dependence on any one segment. Cognizant's shares, which have gained 23 percent since its year-low in August. Future prospects in Europe As the Euro zone crisis deepens and businesses outsource to cut costs amid the uncertainty, Cognizant Technology Solutions expects revenue from Europe to grow significantly. The economic difficulty that has occurred there will actually serve to expand the addressable market for services in Europe. In India Cognizant has completed two acquisitions this year including CoreLogic Global Services, the India-based captive op-erations of CoreLogic, and a privately held company. Founded in 1994, Cognizant has about 75 percent of its 130,000 employees based in India. Efforts to save Environment Cognizant also puts effort in energy conservation, waste reduction, recycling and responsible disposal of waste. It has established a Greenhouse Gas (GHG) policy that is reducing emissions across our global delivery network.

Page 2 FinXpress

Company in Focus :

Cognizant Technology Solutions

Who are they?

Pocket Gems develops free-to-play mobile games that are ridiculously fun. They were founded in 2009 by Daniel Terry and Harlan Crystal, engineers and gaming industry outsiders, who wanted to bring the excitement of social gaming to the mobile platform. Their seven titles to-date have been smash hits, each landing at the top of the App Store charts and entertaining millions of customers across the globe.

They have two missions:

Build the world’s best mobile engineering team – Mobile is the platform of the next decade and gaming will feature some of the most compute- and memory-intensive applications. They want to be the place to work for engineers who are as excited about pushing the limits of mobile hardware as they are. Think that sounds fun?

Become a global leader in the mobile entertainment industry – Over the past 20 years, entertainment has evolved. What once existed only on the TV screen or computer monitor now fits in the palm of your hand. This platform enables experiences never before possible and represents the next wave of innovation in entertainment. Using a combination of creativity and analytics, they want to expand that frontier by delivering the most engaging mobile experiences available.

With recent funding by Sequoia Capital, they have the resources to be able to pursue these goals and build upon their successful track record.

FACTS :

Pocket Gems offered an IIT-M student a job offer of Rs 69.8 lakhs ($135,000) - ET

The top grossing charts for the Apple App Store are starting to see names familiar to Facebook gamers, with Zynga, Playdom, and Crowdstar among them. But the only iOS publisher with two titles in the top five is Pocket Gems, which believes it can hold its own by being a purely mobile-focused player with an eye on long-term quality and user retention. – www.gigaon.com

Mobile gaming is the new frontier. After Aadil Mamujee graduated from Harvard Business School in 2010, he could have worked anywhere. Rather than join a hedge fund or consulting firm though, he signed up with a small, San Francisco gaming start-up best known for "Tap Pet Hotel," an iPhone videogame that lets users build hotel rooms for animated puppies and pandas. It wasn't a passion for videogames that sent Mr. Mamujee, 29 years old, to Pocket Gems Inc. The Cambridge University-trained engineer saw in mobile-phone gaming, an industry whose products reach tens of millions of consumers—a new Wild West where the multimillionaires of tomorrow are still to be crowned. - WSJ

Page 3 FinXpress

StartUp in Focus : Pocket Gems

Page 4 FinXpress

Markets this week

After bouncing back from the lows of 4639 late last week, the week gone by saw the markets rallying strongly to end the week with hefty gains. While the Sensex gained 7.6%, the Nifty closed 7.22% higher. Market breadth was however positive in only two out of the five trading sessions of the week.

The top gainers this week were Tata Power Co. and Tata Motors with gains of 6.30% and 4.57%. However, Hero Motocorp lost 0.30%.

Key Highlights

Government indicated that no proposal for any kind of bail out package for loss making private airlines was under its consideration. India's October exports rose an annual at Rs 1,01,920 crore ($19.6 billion). Oil imports for the month grew 21.7% to Rs 1,03,480 crore ($19.9 billion), while imports for the month rose 21.7% to Rs 2,05,400 crore ($39.5 billion).

India's forex reserves fell to a nine-month low despite a temporary reprieve to the rupee which, if inflows don't revive, may resume its slide through June 2012 as more than a $100 billion of debt repayments begin to unfold. Currency strategists HSBC to CLSA are forecasting the Indian rupee to trade at 58 to the dollar in the next few months, about 14% lower than its close Friday, as the demand for dollars rise.

European shares rose on Friday, recording their biggest percentage weekly gain since late 2008. The STOXX Europe 600 Banking Index rose 4.3 percent after French President Nicolas Sarkozy said he and German Chancellor Angela Merkel would put forward joint proposals to achieve greater fiscal integration in Europe and support countries in difficulty.

India's state-owned firms will be able to decide whether to buy back shares from the state. A proposal for enabling the Department of Disinvestment to respond to the decision of a listed central public service enterprise ( CPSE) having surplus cash to buy back their shares has been formulated for seeking government approval

India on Friday sold 130 billion rupees of bonds, the Reserve Bank of India said.

The gold gained 0.4 per cent to 1,751.22 dollar an ounce. Prices are up 4 per cent this week. Silver gained 1.8 per cent to 33.33 dollar an ounce.

Outlook of the week

With the markets rebounding strongly and the Nifty crossing the 5011 resistances, the bulls do seem to have an upper hand. Traders will need to see if the Nifty can cross the 5169 resistances for further upsides. Crucial downside supports are at 4920.

SENSEX

NIFTY

US jobless rate drops to

8.6%

The US unemployment rate dropped to 8.6 percent in November, its lowest level since March 2009, the Labour Department reported on Friday. It was the sharpest decline since December, and surprised most analysts who forecast the jobless rate would be unchanged at 9.0 percent for a second straight month. The improvement in unemployment was largely due to a steep decrease in the num-ber of people actively seeking work. However, the number of unemployed people also fell sharply, by 594,000, from October. The department said that was the biggest decline since July 1983. The economy created a net 120,000 jobs, in line with analyst estimates.

RBI guidelines on Credit

Default Swap operational

from December 1, 2011

RBI, on Thursday, operational-ised new guidelines on credit default swap (CDS), directing market participants to report such trades within 30 minutes to the Clearing Corporation's online repository. CDS provides credit protection to corporate bond buyers, as the sellers of the swaps guarantee the credit-worthiness of the product. Thus, the risk of default is transferred from the holder of the fixed income security to the seller of the swap. RBI observed that the objective of introducing CDS on corporate bonds is to provide market participants a tool to transfer and manage credit risk in an effective manner through redistribution of risk. Since CDS have benefits like enhancing investment and borrowing opportunities and reducing

Page 5 FinXpress

News of the Week

transaction costs while allowing risk-transfers, such products would increase investors' interest in corporate bonds and would be beneficial to the development of the corporate bond market in India.

Tata Motors top Indian com-

pany for R&D, pips RIL &

Infosys: European Commis-

sion

Automobile giant Tata Motors has piped giants like Reliance Industries and Infosys to become India's top-ranked company for research and development (R&D), as per a list compiled by the European Commission. In its annual R&D Scorecard of the companies from across the world, the European Union's executive body European Commission (EC) has ranked Tata Motors at the top among the 18 Indian companies on its list, compiled on the basis for investment towards R&D and business innovation initiatives. Among Indian firms, Tata Motors is followed by IT firms Prithvi Information Solutions and Polaris Software, state-run BHEL (Bharat Heavy Electricals) and another auto giant Mahindra & Mahindra (M&M) in the top-five. IT giant Infosys is placed at 10th position among the Indian firms, followed by Mukesh Ambani-led retail-to-energy titan Reliance Industries (RIL) at 11th position. Pharma giant Dr Reddy's Laboratories is at 8th, while the country's most valued PSU and oil major ONGC is at 17th. The global list is topped by Swiss pharma giant Roche, followed by American drug maker Pfizer, software giant Microsoft, Japanese auto giant Toyota and US-based pharma major Merck in the top-five posi-tions. No Indian firms have man-aged to find a place in the top-

200 list and the top-ranked com-pany from the country, Tata Mo-tors, is placed at 264th position.

State-run banks led by State

Bank of India to install

40,000 ATMs

State-run banks led by State Bank of India plan to install 40,000 automated teller machines, or ATMs, across the country to widen their reach in what will be the biggest such exercise by local lenders. This time, all the government-owned banks will join hands to install what are known as white-label ATMs, which are not owned by any single bank and where the entire operation is outsourced. Last week, SBI sought offers from vendors for setting up 40,000 ATMs, twice the number the bank currently has. SBI owns the maximum number of ATMs in India. Of the 74,743 ATMs in the country, SBI had 20,084 at the end of March 2011, according to a survey by Atos Worldline, which specializes in electronic payment services. There is resistance from the RBI to approve white-label ATMs since they are owned by non-banking entities, which means they do not fall under the purview of the banking regulator. In case of any dispute between such entities and banks, the RBI may not be able to step in given the ambiguity on the regulation of such entities. RBI's worries also stem from the fact that white-label ATMs do not carry the brand name of any bank, making it difficult for a customer to know whom to contact in case there is a problem with the cash-dispensing machine.

S&P assigns stable outlook

to 10 Indian banks

Global rating agency Standard & Poor's (S&P) today affirmed investment grade with 'stable' outlook to 10 Indian banks, including State Bank of India, ICICI Bank, HDFC Bank and IDBI Bank. The rating affirmation came after applying new ratings criteria for banks, Standard & Poor's said in a statement. The banks, which are part of the list include Axis Bank, Bank of India, HDFC Bank, ICICI Bank, IDBI Bank and Indian Bank. Besides, other banks which have been provided investment grade are State Bank of India, Indian Overseas Bank, Syndicate Bank and Union Bank of India. The rating action for domestic banks comes a day after S&P downgraded as many as 15 large banks globally, including some big American names like Bank of America, Citigroup and Goldman Sachs coming as a major blow to the already-struggling banking sector in a weak global economic scenario. Standard and Poor's has also cut ratings for US-based banking giants like JP Morgan, Morgan Stanley, Wells Fargo, while some European banking titans like Barclays, HSBC, Lloyds Banking Group, RBS (Royal Bank of Scotland) and Rabobank have also been downgraded.

Slowdown Hits Hard as

Growth Slumps to 6.9%

India’s economic growth slumped to its lowest in more than two years while output expansion at key industries tumbled to six-year low. Growth in GDP dipped to 6.9% in three months to September compared with 8.4% in the year ago quarter, as rising interest rates & stubborn inflation crimped

Page 6 FinXpress

News of the Week continued...

demand. Output growth in eight core industries, including steel, cement & coal, dropped to near-zero in October, a sharp decline from 7.2% a year ago, signaling the possibility of a sharp deceleration in industrial growth, given their more than one-third weight in the Index of Industrial Production. Fiscal deficit for the first seven months of the year has reached 75% of the full-year estimate.

RBS assets sale to HSBC

gets RBI nod

The Reserve Bank of India (RBI) has cleared the sale of Royal Bank of Scotland's (RBS) retail and commercial banking business to Hongkong and Shangai Banking Corp (HSBC), but with strings attached despite nearly two years passing by since they agreed on the deal. In July 2010, HSBC had announced that it would acquire select assets of RBS for a premium of $95 million over the net asset value of the business. But that could change, given a sharp deterioration in asset quality due to delinquen-cies. The central bank has approved a portfolio sale but is against an automatic transfer of RBS's branch offices in India to HSBC. HSBC would have to apply for new branch licenses. RBS came in control of 31 branches in the country when it got the ABN Amro Bank NV's Asian operations in 2007 in a three-way split. It is keen on retaining five branches and would surrender the remaining. Following this, HSBC would have to apply for fresh licenses. They could be granted branch licenses in locations like Moradabad and Panipat, where HSBC doesn't have a presence.

Corporates like Bharti

Airtel, Infosys, Wipro and

Microland help staff turn

entrepreneurs

When Sanjay Mittal, an employee at Bharti Airtel, decided to take the entrepreneu-rial plunge this year, his employer was happy to provide him infrastructure, mentoring, funding and even a year's salary. Bolstered thus, Mittal (not related to Bharti Airtel founder Sunil Bharti Mittal) launched UCIT Managed Services, a com-pany that manages video and audio web-conferencing services. His company now employs 35 and Mittal resigned his job as senior vice-president at the tele-com company this year. Airtel let Mittal pursue his passion, as the company recognized his contribution of starting this type of unified communication busi-ness from scratch, while working at the firm. Bharti Airtel, which has 238 million customers globally and revenues of over 65,315 crore for FY2011-2012, owns no stake in the start-up, but Mittal says his company has a mandate to grow the audio and video web services business and manage the complete infrastruc-ture for Airtel. Six other Airtel employees have also launched their own start-ups, with assistance from their employer, since it came up with a policy seven months ago to nurture entrepreneurial ability among employees. A board comprising Airtel senior management identi-fies funds and guides potential business ideas from employees, who want to leave the company and start on their own. Apart from this, programmes such as Sparkplug help employees turn their ideas into businesses inside the firm. Other programmes like Zing Laboratory and Start Up Weekend are open for outside entrepreneurs to turn their business ideas into reality.

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CAN YOU SOLVE IT ?

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SET A

Identify to which company these Tag lines belong to?

1: AIG

2: AT&T

3:BSE

4:E&Y

5:HSBC

6:L&T

7:Lehman Brothers

Fill the Blank

1: Cancel Key

Set A

1) ABC paper

2) Asset-Liability management

3) Asset-based lending

4) Arbitrage

5) Basis risk

6) Basis risk

7) Debenture

d) Techniques for protecting a

firm's solvency in the context of

accrual accounting.

b) Risk from exposure to uncertain

spreads

a) A transaction that generates a

risk-free profit

g) Collateralized lending

e) Risk to a firm whose assets and

liabilities do not offset one another

f) An unsecured corporate bond

c) Asset-backed commercial

Set B Ident i fy the Logos

1) 2) 3) 4) 5)

Clue-

"All of them belong to the financial

world: