Global Bank , IME sign merger MoU

Global bank and IME  Financial Institution on friday  signed a memorandum of understanding (MoU) for merger. Both the institution are promoted by the same group and this initiative has come at time when the central bank is considering forcing (single business group / family ) to go for unification .

           IME Investment Pvt. Ltd. and World Wide Investment have around 20 percent share in Global Bank . Likewise , international money express and world wide investment have 30 percent share in IME Financial institution .

         The merged entity will be named Global IME Bank , according to a senior official at IME financial institution. Last month , the Nepal Rastra Bank (NRB) had held talk with two commercial bank that have almost same set of promoters, for the possible merger.      

Billionaire battles put

Mexico monopolies in spotlight

Battles between three Mexican billionaires over control of the lucrative telecoms sector heated up again this week , intensified by international criticism of monopolistic practices .

    Carlos Slim-the world's richest  man according to Forbes magazine -received a boost to his dominance of the Mexican cell phone market when the country 's competition watchdog blocked a 1.6 billion dollar telecoms deal to link the media empires of two big rivals.

       The deal would have united interests of Emilio Azcarraga , who owns Televisa , the largest media company in the Spanish-speaking world , and Ricardo Salinas , who owns telephone company Iusacell and Mexico's second broadcaster TV Azteca . But the Federal Competition commission's board ruled on Wednesday against Televisa's planed acquisition of half of indebted Iusacell.
 
        Both companies said they would contest the decision , and police even intervened to let the commission representatives enter Iusacell's headquarters amid scuffles and shouting  . "It's almost like an episode in the Wild West ,  where the sheriff can't enter to resolve a fight and thec consumers are paying the cost," said Jorge Fernando Negrete , director of Mediatelecom consultancy .
 
        Azcarraga and Salinas have been rivals up to now ,as  owners of the two main analog television some 70 percent of that market . A merger of their interest through mobile phone present a direct challenge to Slim, who is seeking authorisation to enter the cable TV market , also dominated by Televisa .

     

Romney the revolutionary

Mitt Romney's career says a lot about how American business has changed

IN A Republican primary field full of radicals, Mitt Romney is the establishment candidate. yet earlier is his career he was  a revolutionary . hard though it may be a imagine Mr Romney waving a pitchfork or manning a barricade , schumpeter is  not joking , as a businessman , Mr Romney was at the heart of three revolution.

    The first was the rise of meritocracy  in corporate America. in the 1950s and 1960s  many people though management was just a matter a applied common sense. companies wanted their executives to be "well - rounded men", not rocket scientists .but the 1960s and  1970s  saw  the rise of a new kind of brain-intensive company :private - equity outfits such a Kohlberg Kravis Rberts and strategy  consultancies such as the Boston Consulting Group   (BCG) and   its stepchild Bain and Company.

     These companies valued  analytical skills above all else- certainly above experience or golf handicap . Bruce Henderson , GCG's  founder , recruited the smartest kids from the nation's best business school. Mr Romney was the archetype of this nrw breed : he graduated the earnest in the top 5% of his class at the Harvard Business School . the earnest young man also loved looking under the hood of companies to see how their wiring might be improved . he joined BCG in 1975 and left a couple of years later to join the even more brain-obsessed Bain and Company.

           The second revolution , as Benjamin Wallace - Wells wrote in New York magazine , was the idea that a company's purpose is to make money for shareholders . post - war American capitalism was dominated by managers, not shareholders . these salaried sultans ruled over sprawling conglomerates with elaborate hierarchies and ornate headquarters . the three - martini lunch was de rigueur. and why not ? American business was on top of the world . Wall Street was a complacent club . Japanese companies were not even on the radar .

      But by the time Mr Romney came of age in the 1970s this comfortable world was crumbling . post - war prosperity had given way to stagflation . the Japanese had started to run rings round slow American giants . and in 1976 a brilliant article by two business academics , Michael Jensen of Harvard and William Meckling of the University of Rochester , offered  a radical diagnosis . Corporate  America had a principal-agent problem, they said. Agents (ie, managers) were feathering their own nests rather then serving the interests of their principals (shareholders) . the solution was to force managers to focus on shareholders value.

          Bill Bain heartily agreed . he had left BCG because he was frustrated with a business model which hinged on consultants producing a report and then moving on to a new client . he wanted to forge more intimate relations with fewer companies . and he took this line of thinking a big step further . why not buy out bad managers and let your brilliant young consultants rebuild their companies from the ground up ? the result was Bain Capital , a company that Mr Romney ran from 1984 to 1999, earning a fortune estimated at $200m.

     Bain Capital was a wallet-bursting success . it turned $37m of capital under management in 1984 into $50m in 1994 (and $66billion today) . it kick-started business such as staples(which now has 2,000 stores  selling office supplies) and the sports authority. but it was also a symptom of a wider change. it was not just people like Mr Romney who were  pushing American companies to shape up. it was also the new rigours  of global competition . firms of every description sought to squeeze out inefficiencies , sell   off non - core business and close redundant operations , all in the name of  shareholder  value.

        The third revolution was the shift from manufacturing to services . George Romney , Mitt's father , made solid things for 23   years, running the American Motors Corporation for eight of them . such careers are now unusual . bright, ambitious young American seldom spend their whole lives making products with ballbearings  in them . Bain Capital "re-engineered" 150 companies in a bewildering.                                               






      

Cash incentive eludes pashmina

Despite repeated simplification of cash incentive procedure, pashmina exporters still find it difficult to get benefit firm the government's export promotion plan. "We were confident that the facility would bring some relief to pashmina industry but with complication in the procedures,we have not yet benefited," said president of Nepal Pashmina Industries  Association Pushpa Man Shrestha . Department of  Industry however,claimed that the procedure is much simplified and easy to understand currently .Due to various complication,the department was forced to form a new standard to from a new standard and simplify the procedure further.

      The revised cash incentive  procedure may be simple for big organization but it's quite confusing for the exporters to give detailed information about all the deprecation values, and interest," Shrestha  said , adding that the revised cash incentive procedures are not as simple as the department should approves the  bills of payment and purchase,bank payment certificate and invoice to make it easier for us that will help verification of actual value addition of our products," he said, "We are also ready to provide our balanc

Satire in South Korea

Sneaky tricksters, unite
ACCORDING to our sister organization ,the economist intelligence unite, South Korea ranks as the world's 22nd strongest democracy,and as the second strongest in Asia. its mainstream media, however ,is a weak link.An American think-tank  ,freedom house ,labels the south Korean press only "partly tree",as a result of what it calls "an increase in official censorship" and "government attempts to influence news and information content"journalist themselves worry.a journalists' association of Korea survey conducted in 2010 showed that the top concern of people who work in the media is the "contraction of press freedom". so-called nakhasan appointments means of government loyalists into major media outlets have contributed to the impression that newspapers and television news programmer cannot be relied on to hold to account the powers that be.

              It is the environment that one band of rebel pod casters has flourished . the satirical "Naneun Ggomsuda"{roughly, "i'm a sneaky triskcter"} reaches an audience of around  10m per  episode, according to its founder, Kim ou-joon {pictured above ,second from the right}.this would make it the most popular podcast  in the world.the fact that the express purpose of Naueun Ggomsuda {or "Naggomus" for short}is to pour scorn on a government that Mr Kim openly regards as "greedy"and "suspicious " has raised the hackles of its targets.one regular member of the show ,jeong bong -ju,a former politician ,was recently sentenced to a year in prison for "spreading false information "about the centre-right president,Lee Myung - bakin  contravention of election and defamation laws.other lawsuits are said to be in the works.

 
          Naggomu's case has shed light on South Korea's anusually strict treatment of its citizens who publicly criticise others.it's bad  enough that one can be send to jail for it .one can even be judged to have defamed someone when the allegation in question is true. making a martyr of Mr Jeong though looks to have been an own goal for the government . "it was very stupid to jail him."according to Mr Kim , because  "it is  stirring people's willingness to vote."

      Mr Kim intends to keep his podcast running until south korea has a new president . official opposition seems only to encourage him. when asked how he  responds to  being labelled "dangerous" by a supporter of the government ,he smiles broadly and says simply ,"i' m very thankful."

Accruals and Deferred Income

Accruals and deferred income are spontaneous and interest free sources of unsecured short-term financing.these are the most common source of short-term financing for a firm.

Accruals

            Accruals represent short-term liabilities for the service that have been provided to the firm but payment has not yet been made .the most common accruals are wages payable and taxes payable.because business firms generally pay created.similarly,the firm's own estimated income tax ,property tax ,tax deducted at source ,income tax withheld from employee payrolls and sales taxes collected are generally paid after specified period.thus, accrued taxes are created.since taxes are payment to the government ,they can not be manipulated by the firm.however ,a company can increase the average amount of accrued wages by lengthening the between paydays.for example,changing from twice a month pay cycle to a monthly pay cycle would effectively double a firm's average level of accrued wages.average level of accruals is always half of the total wages pr payroll.

           Accruals tend to rise fall with the level of the firm's level of activity. for example,as level of production and sales increase,labor cost usually increase,as a result accrued wages increase.and as profit increase ,accrued taxes increase.hence,accruals are spontaneous source of financing.though accruals represent costless source of short-term financing ,postponement of payment to employee for longer period may have negative effect on employee's attitude towards the company .employees may respond wish absenteeism or reduce efficiency or they may seek employment elsewhere.so,a company must be careful in postponing wages.however, by delaying payment of accruals company can increase average accruals and save some amount of money.

            To illustrate let us assume, a firm has a weekly payroll of Rs300,000.the firm is considering changing to a biweekly payroll to reduce the cost of writing checks and similar expenses by Rs 300 per payroll.the firm has a 14 percent cost of money.what would b the total annual saving if wages were paid every 2 week instead of weekly?

        Here,if the firm owes Rs300,000at  the end of week and zero at the beginning,the average wages accrual is half of  the Rs 300,000 i.e. Rs 150,000.on a biweekly payroll this doubles.the firm receives an additional Rs 150,000 of interest free financing on the average the additional accruals can be invested elsewhere at 14 percent.the benefit will be (Rs150,000*14%)Rs 21,000 and a Rs 300 payroll expenses can be saved 26 times a year for another Rs 7,800 savings .the total benefit is Rs 21,000+ Rs 7,800 =Rs 28,000.

Deferred Income


              Deferred income represents funds received by the firm for goods and service which it has agreed to supply in future.these receipts increase the firm's liquidity in the firm of cash;therefore they constitute a source of short-term funds.
                   
               Advance payments made by customers are primary sources of deferred income. these payments        are not recorded  as revenue until delivery of goods and service to the customers.they are ,therefore, shown as a liability in the firm's balance sheet and  called deferred income.

Berger Sambandha

KATHMANDU: Berger (J&N) Nepal on monday launched Berger Life Insurance scheme and Berger Health Insurance scheme under Sambandha ."under the life insurance scheme eligible members will be benefited with a life insurance policy of either Ra100,000; Ra200,000 ; Rs 500,000; Rs 750,000; or  Rs 1 million depending on various criteria,the company said, adding that the policy shall be valid for 15 and 20 years depending on the age of the eligible member with fixed term return every five years. the health insurance will cover self, spouse and up to two dependent children for reimbursement of up to Rs 100,000 per annum of medical expenditure in case of hospitalization."on fulfilment of certain criteria,premium for the above policies shall be completely borne by the company so that the member may enjoy the benefit free of cost,"it vowed.