Corporate Office Success Mantra

As a Team Leader, my success mantra to the team, always:

1. Resolve the problem

2. Report the problem

3. Skip the problem (at time on priorities)

Let me explain:

1. RESOLVE :

First, attempt to resolve the problem yourself. This makes employees think on their own, problems get solved quickly, they develop courage to take decisions, and drain on the company working is reduced. It is important to make employees feel empowered and responsible. It is also important to allow mistakes made in good faith with the intention to learn from them and not repeat the same mistakes.

2. REPORT :

Next, if you cannot resolve a problem, then it is your duty to report it to your senior. If non-cooperation or non-completion by someone else, then email and cc the seniors. A problem may become problematic if you fail to report it. An escalation ensures things move towards the solution

3. SKIP THE PROBLEM :

Resolve and Report are for meaningful problems. Then, there is always going to be a long tail of problems in any organization. Learn to skip those, as the ROTI (Return on Time Invested) is not worth its while. Solving these problems will not move mountains. Hence priority is very critical.

Initially in my career I was very enthusiastic to solve every problem, but this realization dawned upon me; knowing which problem to skip for later is equally important to remain focused on the game. Hope this helps my colleagues and team mates in the industry, across the globe.

Disclaimer : This is purely a knowledge sharing article, not offering or influencing any deal or transaction or investments.

CA Yogesh Birla

Director
Birla WP Management Co.
read my blogs : www.YogeshBirlaCA.Blogspot.com

Long Term Investors & Stock Market - 8 Lessons

"If you are a long-term investor, you should own high- quality stocks and close your ears to the siren song of those who say a rate rise will cause you problems.*

If you are not a long-term investor, I wonder what you are doing in the stock market at all, and so will you one day."*

- Terry Smith.......The "Buffett of Great Britain"

Terry Smith, often known as the English Warren Buffett, has once again shared his annual letter encompassing ideas on investment strategies positioned to do well, views on specific stocks and thoughts on the current financial world. 

Well-known in the UK among retail investors, Smith’s Fundsmith Equity fund returned about 18.6% in 2021 and holds 28.9 billion pounds ($39.4 billion).

Here are 8 lessons that we must take from his vision :

*1) No investment strategy will outperform in every reporting period and every type of market condition. So, as much as we may not like it, we can expect some periods of underperformance.*

*2) In investment, as in life, you cannot have your cake and eat it, so it is difficult if not impossible to find companies which are resilient in a downturn but which also benefit fully from the subsequent recovery.*

*3) In our view, it would be a mistake to sell some of these good businesses in order to invest temporarily in companies which are much worse but which have greater recovery potential.*

*4) Someone once said that no one ever got poor by taking profits. This may be true but I doubt they got very rich by this approach.*

*5) We invest in companies, not indices or countries and in our view, the country where a company is listed is largely irrelevant.*

*6) We continue to apply a simple three step investment strategy: Buy good companies, don't overpay, do nothing (i.e., minimising portfolio turnover to minimise costs)*

*7) You may have heard a lot talked about the so-called 'rotation' from quality stocks of the sort we seek to own to so-called value stocks, which in many cases is simply taken as equating to lowly rated companies.*

 

*8) Inflation: It is a bit like trying to light a bonfire or a traditional BBQ on a damp day. If you put an accelerant like gasoline on it you can go from no fire to a loud ‘Whoosh!’ and find that you have also set fire to the garden fence.*

The good news is that we do not invest on the basis of our ability to forecast inflation or any other macroeconomic factor. We invest in companies not countries, indices or macroeconomic forecasts.*

Disclaimer : This is purely a knowledge sharing article, not offering or influencing any deal or transaction or investments.

CA Yogesh Birla

Director
Birla WP Management Co.
read my blogs : www.YogeshBirlaCA.Blogspot.com

Why Willful Defaulters are laughing away from Banks ??

New RBI data shows wilful defaulters are laughing all the way away from banks

The saying goes if you owe the bank $100 that is your problem; if you owe the bank $100 million, that's the bank's problem.

Banks put all their might to get the money back from retail borrowers if they default on a car or an auto loan. Delay one instalment and banks come knocking on the door. They even resort to naming and shaming tactics, using third parties. The tactics seem to work in most cases and the borrower pays back.

But it is an entirely different game when it comes to corporate loan default, which is at a much bigger scale. Banks seem to forget their drill when faced with powerful defaulters, who have a battery of lawyers which drag the lenders from court to court for years on end. And in the end, banks have little to show by way of recovery.

The numbers game...Ugly numbers are already popping up. The Reserve Bank of India data, shared with Parliament, on December 19 shows that the country’s top 50 "wilful defaulters" owed Rs 92,570 crore to Indian banks as of March 31, 2022.

Wilful defaulters are those borrowers who have the means to pay back the banks but wouldn't do so. Banks ostracise such defaulters from the financial system. Gitanjali Gems, promoted by fugitive economic offender Mehul Choksi, tops the list with Rs 7,848 crore, followed by Era Infra, an exposure of Rs 5,879 crore and Rei Agro which has defaulted on loans worth Rs 4,803 crore.

Choksi, said to be an Antiguan citizen now, is beyond the reach of Indian law. The government and its several law enforcement agencies have, so far, failed to lay hands on any of the high-profile bank defaulters, which include former liquor baron Vijay Mallya, Winsome Diamonds & Jewellery promoter Jatin Mehta and Choksi’s nephew Nirav Modi, who is fighting his extradition from the UK.

But it’s not just about wilful defaults. Much of the Rs 10 lakh crore loan that banks wrote off in the last five financial years belongs to corporates.

Of the total loan write-off, banks could recover only a fraction—around Rs one lakh crore. The remaining Rs 9 lakh crore is as good as gone, though technically the process of recovery is always on.

It’s our money

Every rupee that a bank writes off has to be provided for—called provisioning in the bankspeak.

Banks' profitability thus takes a hit. Who are the real losers? Common shareholders and depositors. Banks are supposed to be the guardians of public money. They raise deposits from small and big depositors and use these to lend to businesses.

So whenever a loan is not repaid, it’s the shareholder of the banks (value erosion) and the depositors (as the bank turns weaker in terms of capital and profitability) who suffer.

The government has, time and again, reiterated its intent to clamp down on wilful defaulters.

Coordinated action by the government, RBI and other sector regulators is critical to tackling wilful defaulters as seen in the Kingfisher case.

Banks are sitting ducks for cronies and crooks. In most cases, banks haven’t made meaningful progress in the recovery from deep-pocketed and well-connected promoters. At the end of a long legal process, the value of underlying assets deteriorates and banks are left empty-handed.

The government’s intervention to speed up the recovery process is equally critical since each penny it feeds to state-run banks from the exchequer is public money.

A lot of ground needs to be covered and quickly, as the loan write-off and wilful defaulter numbers show. Do the government and the RBI have the will to clamp down on wilful defaulters?

(extracts of newspapers)

CA Yogesh Birla

Director
Birla WP Management Co.
read my blogs : www.YogeshBirlaCA.Blogspot.com