Anniversary Issue

“ It is hope in this wider sense which enabled

my father to build, from scratch, one of
India's largest modern enterprises. His was
an undertaking powered by hard work,
initiative, self-belief but, above all else, the
capacity, as he would often say, "to dream
with your eyes wide open”.”
- Anil Ambani.
01

Anniversary Issue, 2008

Editorial
Congratulations to Aptivaa on its third anniversary! We all know how eventful,
challenging and exciting these three years were. We have achieved more than we
expected and aspire to achieve much much more.

Winston Churchill once said

“Sure I am that this day we are masters of our fate, that the
task which has been set before us is not above our strength;
that its pangs and toils are not beyond my endurance. As
long as we have faith in our own cause and an unconquerable
will to win, victory will not be denied us”

Taking a cue from these words, we must all strive harder to meet our goals and
aspirations. Looking at the vibrant team at Aptivaa, I feel nothing is impossible.

WE magazine was an instant hit in Aptivaa. Somewhere along the way, the
initiative was lost and the magazine was discontinued. But there can't be a better
opportunity to infuse life into this initiative than Aptivaa's third anniversary. I
wish everyone continues to contribute to WE and revive monthly magazine as
well.

Aptivaa is well poised for growth and I wish Aptivaa all the very best in the coming
future.
Sachin Deorukhakar
Chief Financial Officer 02

I'd like to congratulate Aptivaa on the occasion of its 3rd anniversary, and all
those people, whose commitment and dedication made this day possible.

I have a firm belief that there is no better way to understand a company, its values,
its ethos, its culture than to understand its past. This magazine, “We”, is an
embodiment of the spirit of this company and a celebration of three wonderfully
successful years.

Of course any mention of Aptivaa that does not include the incredible ability of its
employees to enjoy themselves even when facing project deadlines, will be doing
its highly spirited employees a great disservice. To this end, this issue contains
several first-hand accounts of various cultures as well as an informal travelogue
of sorts.

On a more personal note, though I haven't been part of this family for very long,
I've loved every minute of it. I have very little experience with formal editing, and I
am sure this is reflected in the unconventional style and content of the magazine. I
hope everyone enjoys reading “We” as much as I've enjoyed putting it together.

Gayathri Muthuramanathan
Chief Editor
 Tête-à-Tête
Alok Tiwari, Aptivaa’s founder and CEO, has
always been a larger than life personality. Here
is a snapshot of the man behind one of the
fastest growing consultancies, globally.

Why did you choose to be in this niche area of risk

management?

R isk management has become a buzzword only recently. Until

about a year ago, when the meltdown started, risk was perceived
as a back-office or a support function. Historically, that has been
the perception of risk. But after witnessing major failures in the global
financial markets today, risk management is slowly getting to the front-
seat. Integration was an initial issue in the local markets. Once this was
achieved, the entire risk management landscape altered drastically.
Though it is at a nascent stage right now, the future of risk management
03 is very promising.

What is the importance of risk assessment in areas other

than the banking domain?

R isk management is often stressed world-over in seminars and

meetings but other than the Fortune 500 companies, there are
very few companies that take risk management very seriously.
There is a structured risk management system put in place primarily by
banks and associated financial services institutions like insurance
companies, hedge funds and AMCs. There are unexplored areas such as
Corporate treasuries and Commodity risk management. However, risk
assessment remains like the statutory warning on cigarette packets-
everyone can hear the word of caution but it is only too often rejected.

What has been a turning point for Aptivaa?

T he first project was crucial to kick-start the business. The second

project with the Samba Financial Group remains one of the
largest projects completed so far. It gave us the much-wanted
stability. Every project since then has given us immense confidence and
has helped us expand. Personally, every single project has been a
turning point; the way every drop makes the ocean.

Anniversary Issue, 2008

Please give a SWOT analysis of Aptivaa

W e are young, agile and highly energetic; these have to be

leveraged. One of the weaknesses that a growing company
faces is that the business grows faster than internal processes.
There is nothing unusual about it but we need to focus on those and
ensure that processes are in place. For the first time in 100years, risk is
being widely talked about and discussed on various platforms. While
this means opportunities for us, it also implies growth in competition. If
we don't grow fast enough, we won't grow at all.

What are the lessons for India from the sub-prime

crisis?

S
tructured products have always helped expand financial markets
innovatively, leading to a better use of capital. At the same time,
the conduct of business remains an issue. There has to be some
basic principles that have to be brought to the table, to run a business
profitably yet scrupulously. Though the securitization market in India is
very young, it has seen a tremendous growth in the past two years in
terms of volume. But the lesson is simple- follow basic principles and
take only those risks that you can manage well. Though there is an
external entity assessing your risk, take a hard look at your investments 04
and the overall regulatory requirements.

. What do you think is the future of credit derivatives in

India?

T he future of credit derivatives is not too good. They have become

quite infamous since the sub-prime
large number of corporates
and banks have lost millions of
dollars in the forex derivatives
crisis. A

market. In general, derivatives

are not seen in good light. So,
the markets will see very
little progress, atleast for
the next 36months, on this
front.
 As a child, what did you want to be when you grew up?

I wanted to be a primary school teacher. I always felt that primary

school teachers played a vital role in the foundation years of
education. There is a lot of satisfaction that can be derived out of
imparting basic education.
What is your personal set of beliefs?

M y values are very simple: First, be

honest to yourself and be honest
to the world. Second, lead a
simple life with fewer complications-
Be who you are.

What do you do in your

spare time?

05
I n the past 3 years, there has
been no spare time. But
whatever little time that I have,
I'd like to spend it with my children
and friends.

What is your personal dream

for the company?

I n the risk management domain, I

want Aptivaa to be among the top 5
globally. We should be known for our
professional excellence. It's a long way to
go but we'll reach there some day

What would you do if you had a

billion dollars?

I would donate the money. I don't

need that much money. I don't think
any one individual needs that kind of
money. I could multiply that money but
eventually, I would want to give it away to
people who need it more than I do.

Anniversary Issue, 2008

 Teams Talk
“If you really got the right people,
and you've got them working
together as a team, whether it's in
business, whether it's in science,
whether it's in politics, you can make
a big difference.”
- Steve Case

We are in this business because this is what we do best. Assessing and

managing risk is our core competency. We were into IPR development
01
07 earlier, but now we are in a more tool-driven market rather than just a
consulting-driven one. Clients prefer to see something more tangible than
just a piece of advice. There is also a serious need to reposition talent in
India. There is a lot of inherent potential in people and that potential, at
times, gets snubbed due to working conditions. One of Aptivaa's strength
is that it is not a hierarchical organization. We have people with ordinary
backgrounds, working on critical projects with really big clients and
Jignesh Kamdar
Head of delivering extraordinary value. It is not always about intelligence, it is
Professional Services about giving the right orientation, which we provide here at Aptivaa.

Though I am an engineer by training and not a risk management

professional, when I spoke to the founders of Aptivaa, I was completely sold
on their vision. Though it sounds cliché, I wanted to make a difference, to
create something, watch it grow and make a bigger difference than in a run-
of-the-mill MNC. Moreover, this is a fun place to work in, where people love
to come to work everyday. The company's biggest strength is its team of
extremely self-motivated and talented people, coupled with the fact that we
are operating out of a relatively small organization. There is more flexibility,
more adaptability and the affordability to be customer-centric. We have the
ability to change course and adapt to the swings of the market relatively Dipti Raman
Head of
quicker than our competitors. The challenge would be, going forward, to ProductDevelopment
manage and maintain our growth without compromising on our strengths.

Anniversary Issue, 2008

 A lot of collective thought has gone behind the formation of Aptivaa. We
felt that there aren't many banks or financial institutions that are savvy with
sophisticated risk management systems and that is where Aptivaa steps-in.
Compliance was our entry-point from which we could make headway in to
other areas of risk. We have moved in the right direction at the right time, we
have developed capabilities that will propel us to the next level of growth. An
extremely enthusiastic, energetic and focused group of young people is
responsible for the growth. For any start-up company, selling products takes
the front-seat. At the same time it is necessary to nurture competencies
Mandeep Singh
Head of Basel II which can be achieved through concerted efforts toward training and
development. If we continue to do things right, in five years time, we
would cover the complete spectrum from consulting, to
implementation, to analytics, to technology; an Accenture in the risk
domain.

Aptivaa has grown rapidly in just a few years. We have the right people,
the right infrastructure in place and we have a wide market to operate in. A
good, qualified team is our greatest strength. Our project managers do an 02
08
excellent job in terms of efficacy and timely delivery of every project. Our
competitive advantage lies in providing cutting-edge services with the help
of various IPR that we have generated. Our weaknesses are operational
issues which are faced by every growing company. They can be overcome by
laying robust, standardized system-driven processes and meticulously
implementing them. One area where not much attention was paid in the past
Sachin S Deorukhakar
is to build the “Aptivaa” brand. Brand building will help Aptivaa to penetrate Chief Financial Officer
diversified markets globally. I think, the year 2008 would be a crucial year
for Aptivaa. Everything is in place and we have to scale up and grow.

I have been a part of Aptivaa since its inception and I have seen it grow
rapidly in front of my eyes. I am in charge of the pre-sales support globally
and the sales in the Middle East. Though pre-sales involves a lot of
presentations and all the initial ground-work, it doesn't determine targets
and the top-line. The sales function contributes to the top-line and
eventually the growth of the company. And we have seen a lot of growth in
the past three years. But at this stage there is a looming threat of stagnation.
The path-breaking work that we have done in Basel II is not here to stay and
we cannot call that our core competency. In the consulting world, core
Sandip Mukherjee
Head of Sales Middle-East competencies are more generic. With a focus on diversification, our growth
will become less vulnerable to the vagaries of the market.
01

Anniversary Issue, 2008

Milestones
Every day you may make progress. Every
step may be fruitful. Yet there will stretch
out before you an ever-lengthening,
ever-ascending, ever-improving path. You
know you will never get to the end of the
journey.
- Winston Churchill

Anniversary Issue, 2008

Risk management is a seemingly niche domain.
Only at a deeper glance is it revealed that 12
everything is derived out of risk in the financial
services market. Be it banking, investment
banking or M&A activities, pricing is always a
function of risk. Adequate capital is required to
protect the company from any kind of exigencies.

R isk is at the bottom of everything- equity markets,

commodity markets, forex markets, hedge funds and PE.
Risk management is holistic in its application and not
limited to a particular domain. There is growing awareness, in
terms of sophisticated risk management systems in the top
management of corporates because every business has risk
embedded into its business model.

Having said that, therae is, surprisingly, very little work

being done in mitigating risk. The founding members of Aptivaa
identified this lacuna at an opportune moment, when markets,
triggered by tremendous liquidity, were opening up and growing at
a rapid pace. However, this growth has been unchecked and quite
heady, leading to inevitable crises like the Asian Crisis to the more
recent Subprime Mortgage Crisis. Overnight, risk management,
from being a back-office process-driven function, became a part of
the corporate strategy of every business that wanted to shield itself
from unpleasant surprises.
 The entry of Aptivaa into the risk management domain
could not have been more perfectly timed. However, the journey to
be undertaken was not an easy one. Consulting has always
belonged to the western world and Aptivaa, an unfamiliar brand
emerging from the Indian market and competing against the Big
Four, was bound to face many challenges. It all boiled down to
clinching that first deal and since then, there was no looking back.
Operating out of a tiny office space, the focus was just to increase
the client base. A major breakthrough was seen in terms of the USD
2.5 million Samba Financial Group deal in the second year of the
company. This was a massive morale booster and Aptivaa went on
to gain a strong foothold in the Middle Eastern market.

By the 3rd year, the company is providing services to 8 out

of the 10 top banks in the Middle East. Aptivaa has arrived as a
recognized brand in one major region. Within just a short span of
time, the company has a global footprint, covering Algeria, Cyprus,
Egypt, Kenya, Jordon and Lebanon; with offices in New York,
London and now in Singapore.
The much anticipated capital funding from SBICAPS Ventures
13
Ltd. (a wholly owned subsidiary of SBI Capital Markets) and
Japan's SBI Holdings is a reinforcement of shareholder faith in the
company.

Cutting-edge IPR has been successfully translated into

tangible products. As a first-mover in the market, the products are
often vulnerable to imitation by competition but their
sophistication, without compromising on usability, is inimitable.
The key to Aptivaa's success is a unique business model that places
great emphasis on performing risk assessment and process
implementation completely on-site. Working on-site has several
benefits. Working in close proximity with the client allows easy
availability of data and helps foster excellent working relationships
with clients. Moreover, Aptivaa offers exception value for its
services, making it a very attractive proposition for clients. For a
business to be successful in a niche domain such as risk, there must
be clear and simple directives at every step the company takes. The
far-sighted mission and its path are put in focus by the Principals of
the company. Principals are those who have more than 10-12 years
experience in the area of Risk and are domain experts. They are
also known as SME's “Subject Matter Experts”. On the business
development side, they provide their inputs on new markets,
strategic approach and measure the potential. On the
sales/marketing side, they provide pre-sales support as SME's. On
the delivery side they provide their vital inputs on solving various
issues faced by the delivery team.

Anniversary Issue, 2008

 Growth remains a consistently high priority for top
management. Consistently strong, value-creating revenue growth
lies within reach when the best practices in strategy, marketing,
operations, and organization, are in place. Though execution and
fundamentals are certainly vital, growth requires more than just
following the best practices. The company needs to pay as much
attention to top-line growth as to increasing the bottom line. While
cost improvements can drive earnings and shareholder value in
the near term, the top-line is responsible for the company's
survival. The choices that the company makes today, about its
portfolio mix and where to place its bets will shape its growth
trajectory over the decade. One of the primary lessons taught in
Portfolio Management is the minimization of risk through
diversification. The company needs to change and grow and adapt
rapidly to market trends. Newer avenues have to be identified and
explored; and there's no better time to do so than now. From Basel
II to Solvency, the company is expanding in terms of its core
competencies. Analytics outsourcing is next in line. This calls for
geographical diversification too- offices in Singapore, London and
New York to cover the global economic nerve-centres.
14
In the next 5 years, Aptivaa needs to grow as a brand. Brand-
building is not a short term, one-time exercise. It is an ongoing,
long term process that began the day the company was conceived.
A company's reputation depends solely on trust. Keeping
commitments, a consistently high standard of work and
impeccable delivery are paramount in building trust with clients.
One happy customer will often lead to another, and not
surprisingly, word of mouth plays a major role in gaining visibility.
Being a recognised brand also facilitates the attraction of better
talent to the company. Competition for talent is heating up in many
industries and will only intensify as time passes. Having a brand
name will allow Aptivaa to continue to hire the crème-de-la-crème
in a highly competitive market. Once Aptivaa establishes itself as a
brand for a wide spectrum of consulting services, gaining a foot in
the door in new avenues and territories will cease to be a problem.

The ultimate end to building the Aptivaa brand is to be

counted amongst the leaders in the industry: To be a part of a new
force in risk management - The Big Five.
 People Focus
As a startup that places great
emphasis on the search for raw talent and
in honing the nascent skills of its
employees into focused, driven problem-
solvers, Aptivaa's recruitment process is
understandably rigorous. Aptivaa's HR
specialists provide credible and proactive
counsel for chiefs and line managers. Only
HR can translate business strategy into a
detailed and effective talent strategy.
There is a thorough understanding of the
various profiles and the skill sets expected
out of them.
Recruitment:
Openings are disclosed by Department
and Functional Heads, followed by an
aggressive recruitment campaign that
includes employee referrals, placement
consultants and directly approaching
promising prospective employees.
The interview process at Aptivaa is three
15 tiered. The first two stages involve
meticulous scrutiny of a candidate's
resume by a panel of senior consultants,
followed at last by a face to face interview ,
in the third stage, with Mr. Alok Tiwari
(CEO, MD).
If the candidate runs the interview
gauntlet, offer letters are either emailed to
them, or circumstances permitting,
personally handed over.
Since Aptivaa is a consulting services
company, we have employees from very
varied backgrounds, leading to a truly
heterogeneous mix of skills. Employees
include those with sound technical,
financial, sales and marketing and banking
backgrounds. We have CAs and MBAs
(from top tier management institutes,
including the IIMs and XLRI).
Aptivaa currently has 70 employees, a
50% increase over the previous year. The
bulk of the workforce comprises of
consultants, who make up almost 80% of
the total work force, with support staff
making up the rest of the numbers.
Induction:
New Aptivaa employees undergo a one-
day induction program, where employees
are introduced to their colleagues,
company policies are explained, along
with a brief explanation of job profiles. The
induction is carried out by the HR
Anniversary Issue, 2008
coordinator with the Head of Dept.
Aptivaa follows a strict “learn while doing”
approach to training. New employees are
made part of project teams almost
immediately, where they can immediately
begin to learn and contribute.
Training:
As a consultancy form with a strong
emphasis on client interaction, Aptivaa
also encourages employees to attend
training sessions on Corporate Grooming
and etiquettes. Training is conducted as a
one-session workshop, by
Ms. Rukshana Eisa. Ms. Eisa is a
professional grooming and etiquette
trainer who has been responsible for
grooming Femina Miss India aspirants for
over 4 years.
Since most of Aptivaa's projects involve
employees working on-site, and
interacting with clients of different
nationalities, great importance is placed
on cultural sensitivity.
Appraisal:
Aptivaa follows a guided, self-appraisal
methodology. Employees are given the
opportunity to rank themselves on a four-
point scale. Self-appraisal ratings are
compared to those given by immediate
superiors and any deviations are
discussed. Appraisals aim to address
problems or hindrances faced by the
employee and also serve as an empirical
basis for salary revision.
Overall, Aptivaa's HR policies and
strategies are integrated into the
business model which ensures that all
the employees, irrespective of their
position in the organisation, are united
under the common vision of the
company.
Endeavour
To have passion, to have a dream, to have a
purpose in life. And there are three
components to that purpose, one is to find
out who you really are, the second is to serve
other human beings, because we are here to
do that and the third is to express your
unique talents and when you are expressing
your unique talents you lose track of time.
- Deepak Chopra

Anniversary Issue, 2008

 The Inscrutable
Indian Market
Though riding the market-wave is tricky even
for the most seasoned investors, one thing must
always be kept in mind: Investors are not always
as principled as we'd like them to be.
"I've never gone to bed with an ugly
woman, but I've sure woke up with a
few." - A line from Bobby Bare's country
song mentioned by Warren Buffet in this
year's letter to the Shareholders of
Berkshire Hathway.
I think that was the same feeling most of us
had when the market took a downturn on
the otherwise fine morning of January 24
this year. Everything seemed to have
changed overnight. The theory of
decoupling was not working. India's
growth story seemed to have no
buyers. All of a sudden the winner
companies (read tips) that we bought
became duds. What was the mistake?
Where did we err? Did we not do our due
diligence? Did we understand only the
upside potential but failed to notice the
downside risks?
I do not have an answer to all these
questions at this point of time. All I can say
is that this is the best time for introspection,
to understand our mistakes and ensure
that we do repeat them in the future. You
are always allowed to make new ones
though. Following are some of the lessons
that I have learnt.
The theory of
decoupling was not
working. India's growth
story seemed to have no
buyers.
Sitting on cash in not a crime
This is a mistake all beginners make. In a
bullish market, everyone feels that they
should be part of the action. Every one has
heard a story of the John Doe next door
and the killing he made in the market.
Given what we know now, I think the
people who held on to their cash are much
better off now than those who decided to
Good old Valuation Metrics
No matter what the analyst friend of yours,
a pass out from a top tier MBA institute,
working in a reputed foreign brokerage
firm, getting 3 times your salary as bonus,
tells you regarding the incapability of P/E
ratio's and P/BV ratios to capture the
vision of the management, do not buy
stocks at absurd valuations.
Symptoms of a changing tide
Literature on investment suggest various
phenomena to identify the changes in the
market-tide. People use various 18
identifiers, sometimes as absurd as
alignment of stars or the length of skirts
women wear. The situation has reached
almost comical levels of absurdity.
Beware of so-called FII flows
Money that comes in the form of FII flows
may not be clean long-term capital. They
might not have a long-term view in mind.
What is now a prosperous India and an FII
darling may become a failed economy.
Beware of the institutions which come in
with absolute return strategies. They will
sell or buy using leverage at the right
"valuation". These cowboy investors have
wreaked havoc before in many economies
and they may do so again. Caution should
be the watchword
. .
"Stock Market is the place where people
with experience meet people with money.
At the end of the transaction people with
experience take home money and people
with money take experience"
Welcome to the Woodstock of
Capitalism!
Happy Investing!!
Jyothi Kumar
Associate Consultant
 Rupee Dollar- See Saw
As the Indian economy continues to mature,
nuances of risks associated with a fluctuating
currency are hard to ignore; they need to be
followed carefully and understood thoroughly.
Appreciation of a country's currency
usually means that the economy of the
country is doing well. The rupee against
the dollar has appreciated from Rs. 46 in
July 06 levels to Rs.39.27 levels in
January 08, an increase of more than 15%
in about 18 months. This was primarily
due to the huge FII inflows in the country
because of booming financial market,
liberalized external commercial
borrowings and increase in FDI in various
sectors.
INR/USD movement Fy08
19
Chart by - Sachin Deorukhakar
On the flip side, loss of export
competitiveness due to the rupee's
escalating value has robbed people of
their jobs in sectors such as textiles,
leather, marine products and handicrafts.
Many traditional sectors showed negative
export growth during April-December
2007. Handicrafts suffered a 75% dip,
marine products declined by 50.1%,
carpets went down by 37.5%, leather &
leather manufacturing by 19.6% and tea
exports declined by 9.4%. The
government has taken certain steps to
mitigate the losses made by exporters
over the past few months. The steps
include accelerated reimbursement of
certain dues to exporters, reduction in the
rate of interest on pre-shipment and post-
shipment credit, revision in drawback
rates and duty entitlement passbook
scheme rates, refund/exemption of
service tax in respect of certain services
involved in exports, provision of payment
of interest on EEFC balances and
reduction of export credit and guarantee
corporation premia rates.
Anniversary Issue, 2008
The Indian currency, which was much in
news for the whole of 2007 for its rise
against the US Dollar, is now witnessing
an ebbing tide. To such an extent that
economists and forex traders see the
rupee remaining well above the 40-mark
in the near term. Most of them expect the
currency to weaken further, while some
see it slipping to even 42.5-levels versus
the dollar by the year-end.
After having traded in the 39-levels for
most of 2007-08, market watchers were
expecting the rupee to be at around 38-
levels by March 2008. Funds flowing in
from foreign institutional investors and the
large spate of public offers provided a
major fillip to the stock market and the
domestic currency market during the past
year. But all that has changed.
Dollar Shortage
The dollar has been in short supply since
the subprime crisis broke out in the US,
threatening liquidity conditions across the
globe. The Indian market has been facing
a shortage of dollar availability for more
than a month now. One of the other factors
for the current shortage of dollars is the
withdrawal of foreign institutional
investors (FIIs) from the equity market.
This has caused the stock market to
record one of the greatest intra-day falls
during March. In addition to this due to the
surge in oil prices the oil companies are
buying dollars to make import-related
payments.
“The dollar has been in
short supply since the
sub-prime crisis broke
out in the US,
threatening liquidity
conditions across the
globe”
Indian Rupee in Surplus
Asset management houses have
liquidated their bond holdings to mobilize
rupee funds in March and have remained
liquid ahead of an expected cash crunch.
Rupee funds have entered the system
through a host of channels. Mutual funds
received large amounts of subscription
money in March. Hence, they emerged
askey lenders in the market for
collateralized borrowing and lending
obligations(CBLO). RBI had entered into
sell-buy swaps in November. These
swaps matured in February, causing
funds to enter the market. Additionally,
there has been certain amount of
spending by the government through
payment of salaries. Despite funds having
come into the system in so many ways,
banks continued to borrow funds from the
call money market, the market for CBLO
and the repo market.
Strange Phenomenon in Indian Market
The Indian money market is witnessing a
strange phenomenon. Both the rupee and
the US dollar have been in short supply.
On the rupee side, even as cash
conditions have eased a bit, there has
been a scramble for rupee funds on
account of a tighter liquidity situation after
advance tax outflows in mid March.
“The information
technology industry had
assumed that the
rupee's rise seen in
2007 will continue this
year, but the currency
has fallen 2.3% to 40.32
against the US dollar
since January 1”
According to forex market sources, the
central bank feels that the dollar crunch
could be resolved by exporters selling
their dollar-holdings, given that the rupee
is on a weakening mode.
View of IT and BPO sector
India's software and business process
outsourcing companies say they can
continue to hedge their foreign exchange
inflows despite the rupee's fall since the
beginning of 2008 as they believe the local
currency will keep rising in the long-term.
According to forex consultants, some
companies, however, have cancelled a
small number of hedging contracts to sell
in the spot market. The information
technology industry had assumed that the
rupee's rise seen in 2007 will continue this
year, but the currency has fallen against
the US dollar since January 1. This has
taken the companies by surprise, because
most of the dollar inflows, which account
for more than half of India's outsourcing
revenue, have been hedged and hence
won't be able to gain from the fall. Infosys
Technologies, for example, had assumed
a conversion rate of Rs 39.41 against the
dollar in its March quarter guidance.
Similarly, Satyam Computer Services had
based its outlook for March 2008 on an
exchange rate of Rs 39.30. Analysts said
the fall in rupee would provide temporary
relief to IT companies that are facing
softening of demand in the US market,
which contributes, in some cases, even
60-70% of the revenues.
Conclusion
The dollar taking a major hit against all
other global currencies, the subprime
crisis, lowering of interest rates in the
US, slowing down of fund inflows to the
Indian market and the shortage of
dollars resulting from that, will 20
contribute to the weakening of the
rupee. Other factors like lower capital
inflows, inter-bank dollar-shortage and
jittery equity markets, point to the
likelihood of the Indian unit weakening
further. But though the slide is likely to
continue, it may not be a steep one.
Sachin Deorukhakar
Chief Financial Officer
 The Jordan
Experience
A first time on-site experience in Jordan can be
fun-filled and nerve-racking as well.
One of the most exciting things for people
joining Aptivaa is the opportunity to take-
on an on-site project, and I was not an
exception. I had the wonderful opportunity
to be a part of the Jordan team for the
prestigious multi-country Arab Bank
project in August 2007.
With excitement and anxiousness in
equal measure, I was prepared to make
the most of this opportunity. As a relative
neophyte in the corporate world, the
support of my colleagues was something I
came to depend on. The project was
interesting; working on the business side
of credit risk was a great experience and a
great opportunity for some hands-on
21 learning.
I will always have fond memories of my
stay in Jordan. Wonderful weather,
friendly people, and of course an
unending stream of exotic cars, made my
stay an even more memorable one. Of
As a relative neophyte
in the corporate world,
the support of my
colleagues was
something I came to
depend on.
Anniversary Issue, 2008
course, language was a barrier. We'd
often face problem giving directions to cab
drivers. This was especially true when we
wanted to get back to our apartment
building. It didn't help that our building
looked identical to all the other buildings in
the immediate vicinity.
The local cuisine was delightful, especially
for all the non-vegetarians. I have never
had as much chicken as I had during this
short trip (especially telling since I'm a
vegetarian by upbringing).
I couldn't pass up the opportunity to visit
the Dead Sea. Floating, buoyed by the salt
saturated water is an experience not to be
missed.
All in all, the Jordan project gave us all the
opportunity to learn in an extremely
pleasant environment. I will always feel a
sense of pride in representing Aptivaa in
the wonderful country of Jordan.
Vrinda Godbole
Analyst
My Banking
Experiences
Though the Indian banking sector has witnessed
several turbulent epochs of change and
revolution, it still has a long way to go to reach
established global standards.
With over 16 years in the banking sector, I
wanted to share some of the experiences
and highlights of that period. Particularly
those which made me pause and think, as
well as those that transformed banking to
what we see today.
During my first few years at a bank, I'd
watch with utter bemusement at the way
counter clerks went about completely
defacing a voucher with rubber stamps.
After being littered with rubber-stamp
graffiti, it was often difficult to discern any
writing or useful information on the
voucher. The authority of rubber stamps
was respected and absolute.
Another archaic peculiarity of banking in
the past was the method of balancing
books of accounts. Ledger balances
would be written down every week on
notebooks, called balance books, and
tallied with another, independently
maintained, set of books. The task was a
chore and the pressure on bankers to
balance their books was immense.
I was also a first-hand witness to the
infamous “Y2K” problem. Massive
preparations were carried out and mock
runs were done on virtually all systems
which ran on electricity. Even the
telephone and fax machines were not
spared. The people manning the
computer support and service
departments in the bank had a torrid time
of answering all and sundry questions on
the perceived problems, some even from
political leaders. Patch writers made a
killing for making every system in the bank
“Y2K” compliant, while nobody
understood what that meant.
Another archaic ritual was translating all
documents into Hindi under the bi-lingual
policy, be it a letter or Memorandum for
the Board. We would go scurrying for an
English-Hindi dictionary to translate
financial jargon into Hindi amidst the
pressure of deadlines. I also witnessed
the advent of a revolution called the ATM.
These machines truly transformed the
way people dealt with banks. Most cash
transactions, which were handled over the
counter, were carried out by ATMs, thus
providing respite to bank staff. The advent
of the Core Banking System, with
universal connectivity, also provided a
much needed fillip to banks, allowing them
to concentrate on customer service and
risk management. One of the biggest
bottlenecks in the banking system was the
22
lack of a system that ensured fast, safe
and secure intra-bank and inter-bank
communication. This was resolved by
INFINET which stands for Indian Financial
Network. Inaugurated on June 19, 1999,
various inter-bank and intra-bank
applications ranging from simple
These machines truly
transformed the way
people dealt with
banks.
messaging to Real Time Gross Settlement
(RTGS) System are being implemented
using INFINET. However, banks still have
a long way to go in utilizing technological
innovations to further business growth
and profit.
Though I am no longer part of the banking
mainstream, I thoroughly enjoyed my
tenure in the banking space and cherish
the memories and experiences it offered.
S Vijayshankar
Consultant
 Team A

Anniversary Issue, 2008

Aptivaa
 Capital Account
Convertibility
a process or an event
India has gradually moved forward towards
Capital account convertibility with definite
reform measures including reforms in financial
sector and industrial restructuring. CAC is a
matter of degree and gradual evolution rather
than a one-time decision.
Introduction
Based on the experience of economic
liberalization since 1991, Dr. Manmohan
Singh, Hon'ble Prime Minister of India,
thought that there was a merit in moving
towards full capital account convertibility
(CAC) within a transparent framework. On
March 18, 2006 he advised the Finance
25 Minister and Reserve Bank of India to
prepare a roadmap for moving towards
CAC.
Till 1990, all sorts of
restrictions on current
account transactions
continued and the forex
reserves of the country
were at precariously low
levels and not enough
to meet one weeks'
import obligations.
The journey
In 1947, immediately after independence,
several controls had been imposed on all
foreign exchange transactions through
Foreign Exchange Regulation Act
(FERA), 1947. Subsequently, some more
controls were imposed through FERA,
1973. Till 1990, all sorts of restrictions on
current account transactions continued
and the forex reserves of the country were
at precariously low levels and not enough
to meet one weeks' import obligations.
Consequent upon economic liberalization
process initiated by the then Narasimha
Rao Government, a reform in the external
sector took place. If we look at the
sequence of events since the High Level
Anniversary Issue, 2008
report on Balance of Payments of 1993,
we find many of its recommendations had
been implemented. The most significant
one was that the exchange rate of rupee
was made market determined and
adopted the current account convertibility.
Current Account Convertibility
Current Account Convertibility indicates
fulfillment of two conditions viz., (a)
currency exchange rates are to be
determined by market forces and not by
regulatory authorities and (b) there should
not be any restriction on the conversion of
native currency into foreign currency or
vice versa on all types of current account
transactions. The Indian rupee has
satisfied the first condition and left its
exchange rate to be market determined
since March 1993. India, being a member
of IMF, has adopted full convertibility on
current account since August 20, 1994.
FEMA has also been introduced and there
would be no restriction to sell or draw
foreign exchange for current account
transactions barring few restrictions
imposed by GoI for the purpose. There
were concerns that due to current account
convertibility, there could be capital
outflow from residents in the guise of
current account transactions and hence
certain safeguards such as the
requirement of repatriation and
surrenders of export proceeds, were
taken.
A consistent approach
Talking about CAC, the present RBI
Governor, Dr. Y. V. Reddy commented that

“capital account
liberalisation is a process
and it has to be managed
keeping in view the
elasticity in the economy,
and vulnerabilities or
potential for shocks.
These include fiscal,
financial, external, and
even real sector say, oil
prices and monsoon
conditions for India”.
Therefore, a consistent approach has
been taken to the process of liberalisation
of both current account and capital
account transactions. In 1997, the
Tarapore Committee had indicated three
pre-conditions for CAC such as mandated
inflation target, strengthening of financial
system and fiscal consolidation. Countries
with weak initial conditions have to adopt
drastic measures in macro economic
policies to facilitate the move to CAC.
Some of these countries had to face
interruptions and reintroduction of capital
controls in the evolution of CAC.
East-Asian Crisis and CAC
CAC stipulated rapid economic
development. But the same tool could
lead to huge exodus of capital, which
eventually precipitated the East Asian
meltdown. Does it prove that CAC is bad
and inimical to economic development? It
depends on inherent strengths or
weakness of the economy. China and
India were the exception to East Asian
crisis. Neither of these countries
embraced liberalisation and globalisation
with the same fervour as the East Asian
Countries nor did they pursue CAC with
equal vigour.
To w a r d s f u l l e r c a p i t a l a c c o u n t
convertibility: Experience gained by
countries and Tarapore Committee
The Committee had summarized various
lessons gained by countries from various
currency crises which were as follows: (i)
Most currency crises arise out of
prolonged overvalued exchange rates,
1
A country's Balance of Payments (BoPs) can be divided into
two parts: capital account and current account.
2
Current account transactions are those which do not affect the
assets and liabilities position of resident Indians and NRIs,
mainly related to export, import of goods and services and
remittances
leading to unsustainable current account
deficits. An excessive appreciation of the
exchange rate causes exporting
industries to become unviable, and
imports to become much more
competitive, causing the current account
deficit to worsen. (ii) In many other
economies, large unsustainable levels of
external and domestic debt directly led to
currency crises. Hence, a transparent
fiscal consolidation is necessary and
desirable, to reduce the risk of currency
crisis. (iii) Short-term debt flows react
quickly and adversely during currency
crises. Receivables are typically
postponed, and payables accelerated,
aggravating the balance of payments
position. (iv) Domestic financial
institutions, in particular banks, need to be
strong and resilient. (v) Imposition of
safeguards in the form of moderate
controls on capital flows may be
necessary in some cases.
Conclusion
At present the FII/FDI investors can
take money out of the country at a very
short notice. NRIs can take money out
of the country. Importers and 26
Exporters can take money out by over-
invoicing and under-invoicing.
Unscrupulous persons can take
money out through hawala route. Of
course, capital flight can cause large
shocks to the economy. At the same
time, large shocks may come even
without CAC. Hence, it is the resilience
of the economy that matters.
Satyajit Deb
Senior Manager
 Eyes Wide Shut
The lack of proper Risk Assessment systems
even in the topmost financial services
institutions of the world leaves companies
vulnerable to frauds and embezzlements even
from the most unexpected perpetrators.
On the 24th of January 2008, the Société
Générale, one of the main European
financial services companies, announced
that a single futures trader had fraudulently
lost the bank $7.2 billion. This was the
largest recorded loss in history. The
company did not identify the trader, but
external sources identified him as Jerome
Kerviel, who held a junior position at the
bank. He orchestrated a series of bogus
transactions that eventually spiraled out of
control.
Since the Barings collapse, where Nick
27 Leeson, a Singapore-based employee of
Barings Bank lost $1.4 billion on futures
contract speculation and hid his actions till
February 1995, companies have been
spending millions on risk management
systems, implementation of new
regulations, risk and compliance
frameworks. The Société Générale story
successfully jolted everybody out of their
seats.
The unnerving thing is that the answer to
the question 'What happened at
SocGen?' may not be complicated at all.
While the official account seems to
indicate that Kerviel was some kind of a hi-
tech Guru, his resume points out that his IT
skills do not seem to go past VBA. Fake
documents, fictitious accounts and used
others passwords. Ring a bell? We have a
trader who was less celebrated, more
junior in comparison to the flashy Nick
Leeson but managed to obliterate about 6
times the money ($7.3 billion). The human
tendency to spend a whole lot of time and
effort on ex-post analysis is quite
understandable. However it is a touch
disturbing when we seem to fail in the
'lessons learnt' part.
Here we are faced with a conundrum. One
would think that after the Barings episode,
at least the top financial institutions in the
world would have implemented the
appropriate risk management systems.
However, disaster at SocGen quite simply
has made a mockery of all that. So where
do we go from here?
Anniversary Issue, 2008
One would think that
after the Barings
episode, at least the top
financial institutions in
the world would have
implemented the
appropriate risk
management systems.
Let us turn our attention to a phrase that
makes most of us either cringe or snicker
'Risk Culture'. There is a very clear need
for organizations today to set up robust
Risk Frameworks and processes and
have more intelligent monitoring systems;
however these would lose their shine and
significance unless there is a very clear
intent to develop a compliant, open and
transparent organization. Risk assess-
ments and the like are primarily bottom-up
approaches, 'Risk Culture' on the other
hand is very much top-down.
Nick Leeson had maintained that he
would not have been able to create those
dealing positions without the lackadaisical
attitude shown by senior management. To
the contrary, he was very much their
golden boy till his large losses were
unveiled. It is obvious that for an
organization to make profits, it must take
substantial risks. This makes it even more
important for the management to clearly
set the risk appetite and oversee its
dissemination. It is safe to say that this is
the second loud wake up call to the top
brass of financial institutions around the
world to get their act together and take a
long, hard look at their organizations' 'risk
culture'.
Rohan Verghese
Consultant
 Aligned
Commitments
Sailing through difficult client situations and
gaining immense learning experience from the
AUB SunGard Implementation project.
Aptivaa has just concluded the “AUB
SunGard Implementation” engagement. It
has been one of the most challenging,
demanding and overall the toughest
projects of my professional career, and
ultimately one of the most rewarding.
This project was our first engagement with
SunGard, one of the leading financial
software vendors in the country. As our
first project with this organization, we had
the added responsibility of opening up and
nurturing a business channel with them.
Though many team members were
inexperienced, and the nature of the
project was alien, they went above and
beyond the call of duty to produce
exceptional results.
Though many team
members were
inexperienced, and the
nature of the project
them, but did so without sacrificing any of
our commitments.
The project was replete with a lot of fun as
well; be it cooking together or just relaxing
on the scenic island of Bahrain.
Through a concerted team effort, we
made this project an unqualified success.
In fact, our successful delivery spurred our
client to offer us new business
opportunities and avenues. Kudos, team
Aptivaa!
Apart from gaining invaluable project
management experience and issue 28
resolution skills, we were exposed to a
world class system. This exposure will
allow us to contribute better to our internal
and external projects, and to provide a
complete end-to-end Basel II
implementation cycle.
Vijay Dikhani
Sr. Analyst

was alien, they went

above and beyond the
call of duty to produce
exceptional results.

Due to both the aggressive and

demanding nature of the client, with
constrained time-lines and a demanding
deployment plan, the team was subjected
to very frequent, high-pressure situations.
This has often led to several last minute
cancellations and rescheduling of travel
plans. Ahmed, our quintessential travel
planner, was instrumental in scheduling
our travel details and helping us work
through this difficult period. Without
getting carried away with details, I'd like to
mention that due to the unique nature of
this joint partnership contract, we faced
some very high level issues. But Alok,
Sandip and Jignesh not only resolved
 Fundamentally Flawed
In the whole subprime crisis blame-game, there is
no single entity or individual to point the finger
at. Instead, this mess is a collective creation of the
world's central banks, homeowners, lenders,
credit rating agencies and underwriters.
Remember the 1990’s in Japan? It is hard With the recent doubling of default rates
to forget the deluge of capital assets from (in contravention to the prediction of I-
1990 to 2003 that inundated the market. Banks) and widening spreads, structured
debts have begun to collapse. Through
Cut to the present. Massive levels of debt the last couple of months, billions of
underlying the world economic system dollars of these securities have been
are unwinding in a persistent way as an 'orphaned'. They can't be sold off or used
optimistic era- of too much liquidity, too as collaterals.
much leverage and fundamental
reasoning- is ending. The structured finance market is coming
undone; not only have those pillars of
Where does the onus lie for such strength for equities been knocked away,
dissolution? but many deals that were predicated on
the availability of lucrative money, have
Who is to be blamed? Is it- gone bust. The problem worsened with
, The American middle-class that took rollovers using ARS (Auction Rate
29 mortgages that they couldn't afford; or Securities). The rollover spreads have
, The US regulator; or widened and lack of investor interest in
, The I-Bank who repackaged sub ARS has led to the failure of several
primes and transferred credit risk into auctions. I am sure we haven't seen the
the hands of unsophisticated funds end of this; the far-reaching effects of this
contagion will be witnessed in the near
future.

The far-reaching effects Aditya Kasera

of this contagion will be Consultant
witnessed in the near
future.

Source: The Economist

Anniversary Issue, 2008

 First Taste Of
'Arabic' Banking
Language barriers affect a project delivery in the
strangest and the most unforeseeable of ways.
After a fairly long innings of nearly 23 stared at the data with utter disbelief and
years in a well-known multinational bank, I reprimanded me for my incompetency. I
went to the Middle East in mid-2000 to suffered his ire in complete perplexity.
take up a position with Arab National
Bank. The requirement was to establish The confusion was soon resolved. All
and head their risk management (which papers that were presented in Board
was essentially credit risk those days) meetings had to be in Arabic and the MIS
function. The position reported to the reports had also been translated. Reading
Managing Director who was known to be a from right to left, the various heads had
very demanding boss and I learnt this bit been translated but the data were kept
very quickly. unchanged; hence, they appeared
absurd.
One of my first responsibilities was to
prepare a high-level MIS report on the
bank's asset book for the benefit of the
Managing Director and Board of The MD stared at the
Directors. This included the break-up of data with utter disbelief 30
the book by business segments, asset and reprimanded me
class, segment-wise exposure, products,
etc., with an analysis of the variance from for my incompetency.
the previous month. Although the exercise
appeared fairly simple and I had prepared
such reports earlier in ANZ Grindlays All's well that ends well. But I carried back
Bank, the unique challenge in this bank an important lesson that day. Nothing can
was to obtain accurate data from several be taken for granted. Processes never
different systems which did not have any quite run as smoothly as you want them to.
interface with each other. Also, nobody Unexpected hurdles crop-up despite
had attempted to prepare comprehensive every pre-emptive measure undertaken.
MIS reports earlier. But a good risk manager is one who has
the capability to anticipate as much as
It needed a few weeks of grinding for long possible and mitigate potential issues.
hours to make any progress. I was able to
collate adequate data but I was not quite C Krishnan
certain about their accuracy at this stage. I External Consultant
incorporated the data into an excel sheet,
in an easy-to-read format. This first-cut
tabulation was met with great appreciation
by the MD. Each significant item was
accompanied by a brief, explanatory note,
pre-empting further queries I worked
overtime on the final report and checked
and re-checked the credibility of the
numbers before handing it over to the MD.
It was extremely crucial that everything
was in order before the presentation to the
highly astute Board.

The D-day arrived and it was a nerve-

racking wait for the presentation to be
over. The presentation was a disaster and
the MD was furious. The Board was
extremely unhappy, to say the least, with
the data that was presented. The MD
 UNION BUDGET
2008-2009
From aggressively raising the cause of farmers to
supporting higher education to offering medical
benefits to sops for women and senior citizens,
the Union Budget is almost perfectly rounded.
The Union Budget 2008-2009, was
presented on Feb 29th, 2008, by the
Finance Minister Mr. P. Chidambaram.
The budget had a strong focus on budget
is a populist, election budget, being the
last budget of the present government. On
one hand the finance minister has
ensured maintaining the growth
momentum and uplift of rural economy,
while on the other hand he has also taken
care of future elections. It appears that
coming back to power is more important
than pursuing sound economics.
Following is an analysis of some of the key
31
issues and their impact on the economic
system:-
It appears that coming
back to power is more
important than pursuing
sound economics.
Agriculture sector
The agricultural sector has been given
more importance, specially small and
marginal farmers, by waiving outstanding
loans taken from banks. However, in the
Indian economy, a major portion of
borrowing by farmers is from private
money lenders which are not covered
under the scheme announced in the
Budget. No rational person can, with a
clear conscience, support a loan waiver
of Rs. 60,000 crores which, almost
certainly, will have a large negative impact
on the fiscal and revenue deficit targets.
Other avenues like loan restructuring and
advocating means should have been
explored to make farmers self-sufficient.
Waiving this loan will be a large financial
setback to the country, and as always, the
burden of this misplaced generosity will be
placed squarely on the shoulders of the
common man. At the very least, let us
hope that the proposed measures are
implemented with due diligence.
Health, tourism and education sectors
have also received considerable attention
Anniversary Issue, 2008
in the Budget with the setting up of 3 new
IITs in Andhra Pradesh, Bihar and
Rajasthan; tax exemption for five years for
hospitals set up in rural areas; five year tax
holiday for promoting cultural tourism and
reducing the custom/excise duty on life
saving drugs. These steps will ensure
inclusive growth as outlined by the Com
Corporate Income Tax:
Corporate tax rate remains unchanged;
however excise duty reduction from 16%
to 14% is positive for the sector.
Personal Income Tax
With the increase in tax collection of
personal income tax, which registered a
growth of 42% and now stands at 12.5% of
GDP, the Finance Minister has favored the
rising middle class of the Indian economy
by increasing the purchasing power of 300
million middle class people of the country
with tax slab and rates rationalization. The
amount of non taxable income has
increased from Rs.110,000 to Rs.
150,000. For example, a person earning
more than 5 lakhs per annum will see
reduction in taxes to the tune of Rs.54,000
which will increase his spending power
and consequently, maintain the country's
rapid growth momentum.
Indirect Taxes
Custom duties: The budget proposes no
changes in the peak rate of customs duty.
However, the Finance Minister reduced
custom duty from 10% to 5% on life saving
drugs which will help the Pharmaceuticals
industry and will in turn result in low cost of
drugs.
Excise duty : General CENVAT rate on all
goods has been reduced from 16% to
14% to give a stimulus to the
manufacturing sector.
The reduction of excise duty on
pharmaceutical sector from 16% to 8%
deserves a special mention, as this would
bring down the cost of medicines. This is a
welcome fillip to the healthcare industry.
The reduction of excise duty on small cars
and two wheelers will have a positive
effect on the Auto industry

Service tax
The budget proposes to cover four
services under the service tax net. These
services are: (i)asset management
services provided under ULIP; (ii)services
provided by stock/commodity exchanges
and clearing houses; (iii)right to use e-mail one
goods, in cases where VAT is not payable; Attention: Human Resources
(iv)and customized software, to bring it on
par with packaged software and other IT Joe Smith, my assistant programmer,
services. The budget has also increased can always be found
the threshold limit of exemption for small hard at work in his cubicle. Joe works
service providers, an increase from Rs.8 independently, without
lakhs per year to Rs.10 lakhs per year; wasting company time talking to
consequently, around 65,000 small colleagues. Joe never
service providers get out of the tax net. thinks twice about assisting fellow
employees, and he always
finishes given assignments on time.
Other changes Often Joe takes extended
measures to complete his work,
# Removal of Banking Transaction tax sometimes skipping
coffee breaks. Joe is an individual who
# Increase in STCG tax from 10% to 15%, has absolutely no
which will affect daily traders but may vanity in spite of his high
ensure a reduction in the volatility of the accomplishments and profound
stock market by encouraging retail knowledge in his field. I firmly believe
32
investors to go for long term that Joe can be
classed as a high-calibre employee, the
investment. type which cannot be
dispensed with. Consequently, I duly
# Introduction of Commodity Transaction recommend that Joe be
Tax in line with security transaction tax promoted to executive management,
and a proposal will be
Despite being considered as a populist executed as soon as possible.
budget, business leaders also consider it
a progressive and growth-oriented budget Regards,
which balances the demands of a growing Project Leader
economy.
e-mail two

Attention: Human Resources

Joe Smith was reading over my

shoulder while I wrote the report sent
to you earlier today. Kindly read only
the odd numbered lines [1, 3, 5, etc.]
for my true assessment of his ability.

Regards,
Project Leader

Hardik Shah Sunil Mirchandani

Consultant Consultant
 Fun in Bahrain
……… it's possible!!
A fun-filled trip to Bahrain, replete with all the
usual ups and downs that pop-up in a staunch
country.
Whenever anyone speaks of the AUB
Bahrain project, it is almost always
accompanied by negativity like, a difficult
client, project delays, etc. I'd like to take
this opportunity to present another
perspective to this story; one that will,
hopefully, give the next batch of people
headed to Bahrain, something positive to
look forward to.
Since our stay at Bahrain coincided with
the holy month of Ramadan, we were
forced to be abstemious. We would often
have to grab a quick drink of water behind
our computers. Amid these trying times,
01
33 we found our knight in shining armour,
Girish. His generous offer of breakfast at
his home is something we won't forget in a
while.
Be it for clients or an informal team
gathering, Bahrain Lanterns is the place
we'd turn to. Though the food was
delicious, the USP of this particular eatery
lay in the ever-exuberant singing sardarji
and his equally enthusiastic lady side-
kick. We've been to this place so many
times that I actually have the menu
memorized.
Let's move on to the hottest spot in Juffair,
our beloved Café Bollywood. As if having
live Hindi numbers being belted out by
performers wasn't enough, there was a
Anniversary Issue, 2008
live dance troupe, sashaying to the
newest of the new Bollywood hits. For
more information and first hand accounts,
please pester anyone who's been there
for details. I assure you, it will be quite
rewarding.
With eateries and supermarkets lining the
street, we were absolutely spoilt for
choice. We even found a Mega Mart to
satiate VD's insatiable need for chillies!
There are other positives as well. Though
it is quite hot and humid in Bahrain, it is
often windy and cold. So much so that we
didn't need to use the air conditioning at all
at times.
A mention must be made of the unsung,
ubiquitous taxi drivers without whom our
lives there would have been so much
more difficult.
Though at times, I couldn't wait to get
back home, the experience of Bahrain
was made a much more pleasant one by
having friends and colleagues around.
Neha Ajmani
Associate Consultant
(creative input from
Bhargava Pingali)
Data Preparation
A Learning Experience
Data preparation is a time-consuming task and
it requires a fair amount of meticulousness; but
it's an indispensable facet in Basel II RWA
Engine Implementations.
Data preparation, as a separate module,
was undertaken for the first time at Arab
Bank, and thanks to this fact, there were
unexpected hurdles during the progress
of the project. Although data preparation
was conducted at a macroscopic level
during data gap exercises, the amount of
granularity that became a part of data
preparation as a sole activity was the main
reason for most of the issues.
Broadly, data preparation is an activity
undertaken to ensure that a bank's data
sets and policies pertaining to its portfolio
are completely in line with Basel II
(including local supervisory) data
requirements for seamless RWA
determination. The output of the data
preparation module, viz., Implementation
Dockets can be effectively used by the
bank or the vendor for RWA calculation. In
the absence of data preparation, a bank
has to devote a substantial amount of time
to address inconsistency issues related to
data extraction and validation which can,
practically, consume half of the
implementation time.
Since the project was being guided by
individuals experienced in Basel II RWA
Engine Implementations, most of the
problems were successfully nipped in the
bud. However, as always, client-specific
problems were the ones that delayed
delivery. Some major issues were the
absence of a data warehouse for the
bank, the lack of active involvement from
certain departments of the bank and
lastly, an amount of ambiguity with
respect to the scope of delivery.
The project kicked off with a request for
bank data along the attributes specified by
the team. As mentioned earlier, since
there was no single source for all the data,
the bank faced problems in providing all
the required information. After several
iterations, satisfactory data extracts were
obtained, based on which the next phase
of the activity was carried out, viz.,
working towards resolution of issues with
bank policies and procedures or source
systems which were unable in capturing
certain key information.
The lack of prudent
project management,
either from the bank or
the project team, can
easily lead to 02
34
inefficiency on the
project.
Like any other consultative module, data
preparation requires a high degree of
interaction between the bank's Project
Management Office(PMO) and the project
team to work toward the above mentioned
objectives. The lack of prudent project
management, either from the bank or the
project team, can easily lead to
inefficiency on the project. Such a
challenge becomes all the more relevant
when the activity is conducted across
geographies. In the case of Arab Bank, the
data preparation module was conducted
in six regions, making it one of the only
projects (at the time) where such scale of
activity was observed.
At the end of the day, the data preparation
module was an excellent platform for
consultants, from varied backgrounds, to
come together and work around problems
associated with a project of such a
proportion.
Aby George Eapen
Consultant
 Nothing Official
Playing a cricket match is not just about fervor
and fanaticism ; the spirit of sportsmanship has
to permeate through the entire team.
The idea was the brainchild of Sachin
Chiramel but since he was away on a
project, the responsibility of arranging the
cricket matches fell squarely on me. The
'project' kicked off after the CFO
generously sanctioned a small budget
toward the registration fee and a cricket
kit. A major challenge lay ahead in
persuading the key players who had, for
many years, only vicariously enjoyed
cricket matches and never participated in
one. However, the very idea of a corporate
cricket tournament aroused
overwhelmingly positive responses from
everyone. Secondly, due to the volatile
nature of our work, there was no
assurance of a person's availability on a
35 particular day. There were also other
issues to contend with, like physical
fitness of the available enthusiasts and
identification of areas of specialization
(batting, bowling, fielding, wicket-
keeping). Claims of expertise were not
enough; they had to be tested during
practice sessions as well.
Zeal most often doesn't translate into
accomplishment hence we couldn't let it
bias the team selection criteria. Keeping in
mind the objective of building a strong
team, the selection was based on:
1. Previous experience in, at the very
least, playing street cricket
2. Availability during the course of the
matches
So the stage was set- we were to play our
first match with “Elder Pharmaceuticals”
(EP), the runners up of last years
Champion's Cup. Our team looked
modest with a fairly even distribution of
skill sets. Of course, those few practice
sessions in the nets did a lot of good, if not
our skills, at least for our confidence.
Clash of the Titans
D-day dawned on the morning of January
26th. The ambience at the Western
Railway ground was charged with the
enthusiasm of both the players and the
spectators. Jignesh , Sachin D , Satyajit
and Krishna were present to give us
Anniversary Issue, 2008
much-needed moral support.
The ground rules of the match were
demystified and the match began. We lost
the toss and we lost the match.Though we
conserved wickets, we couldn't keep pace
with the required run-rate.. But we gained
enough experience with us to bounce
back in the next match.
A Deserving Break
The second match was with Lazard India
on the 3rd of February. There was one
person who, while watching the first match
from the stands, decided to actively
participate.. His participation in the
second match turned out to be pivotal.
Jignesh, with his indomitable spirit and
flair, successfully intimidated the
opponents and was the star performer of
the day. Also, our CEOs presence with his
family, inspired confidence and boosted
our morale.
Our first win! The atmosphere in the camp
was electrifying. Our dedication at the
nets finally paid of and jubilation was
everywhere.
History Repeats
After elaborate practice sessions at the
Matunga ground and one win, our
confidence level was at an all-time high
and we looked forward to clash with HSBC
on March 8th. We won the toss, decided to
bat but we eventually goofed-up and gave
the game away; and with that the
memorable event came to an end.
Irrespective of the outcome, the event
nurtured camaraderie and bonded people
together. We are not neophytes anymore;
armed with this experience we eagerly
await THE SARAN CC7 2009!!
Arindam Das
Consultant
Panchroma
Creativity is a great motivator because it
makes people interested in what they are
doing. Creativity gives hope that there can
be a worthwhile idea. Creativity gives the
possibility of some sort of achievement to
everyone. Creativity makes life more fun
and more interesting.
- Edward de Bono
 Book Review
Our life is enriched, nay veritably shaped, by
many experiences. Some of them take the shape
of people who become our partners, friends,
acquaintances, who over the years change us,
sometimes for the better or sometimes for the
worse, but who leave an indelible impact on our
lives nonetheless. Some others, especially for
me, have been books! Permit me to recount
some of the authors and their respective works
that I have encountered over the years

The 'Known Space' Series by Larry Niven

Larry Niven writes stories with graceful emotional settings
coupled with a strong bent for math and physics. It has been
said that delays in research at MIT often coincide wit the
01
39
publication of his books. I recommend him strongly, but to
really enjoy him you need to be a Sci-Fi addict! Unlike authors
who manage to stretch a single idea into novel(s), he just
shrink-wraps some beautiful concepts and drops them in your
lap to imagine.

'The Count of Monte Cristo' by Alexandre Dumas

This is a tale with a cast of characters, intrigues and infidelities
that would put the regular soaps to shame. The story (except for
the beginning which sets up the rest of the book) moves very
quickly and there are plots and sub-plots, wheels within wheels
as it were, which keep the reader glued to the pages, despite its
not inconsiderable length. And though, like 'The Three
Musketeers', it is an unashamed thriller, this novel also has
some of the best character portrayals I have ever seen, and
some of the most poignant moments as well.

'The Lord of the Rings' by J. R. R. Tolkien

A book quite as long and wordy as the one above (both push
1500 pages), this is a timeless classic. Though Dunsany may
have been the first to write 'Fantasy' as we know it today,
Tolkien was indubitably the one who set the mould for the
genre. His rich, rolling language and marvellously detailed
worlds, set the standard for all future. The theme of master
and apprentice, embodied in fantasy through Gandalf, the
knowledgeable wizard, and his pupil Frodo (and Bilbo before
him) pervades, be it Rand al'Thor and Thom Merrilin, Luke
Skywalker and Obi-wan Kenobi, Pug and Kulgan or even the
recent Aragorn and Brom;and yet, the hero of the book, to my
mind, is none of these it is rather the unsung Samwise
Gamgee, the faithful gardener and steadfast friend.

Anniversary Issue, 2008

'A Song of Ice and Fire' by George R. R. Martin
Though I mentioned that Tolkien set the gold standard for
fantasy, at last there is a challenger to the throne. A Song of Ice
and Fire is a worthy addition to any fantasy aficionado's
collection, and he's been getting better with every book (three
of them so far) My only complaint is he's takes too long between
books, leaving me in high anticipation intermittently.

The 'Discworld' Books by Terry Pratchett

The Discworld is set on a world in the shape of, you guessed it, a
disc, resting on the back of four elephants, who stand upon the
shell of that massive chelonian, Great A'tuin. Be prepared for
strange places - the highly polluted river Ankh ('you can't drown
in it, but you can set fire to it'), Bad Ass ('don't ask how it got its
name') in the Ramtop mountains and Uberwald (home to
vampires and other interesting unliving folks)-as Pratchett
satirizes war and opera, politics and Hollywood with gratifying
impartiality. It is highly recommended, and it remains my
favourite in Fantasy writing.

The 'Blandings' series by Sir Pelham Grenville Wodehouse

Wodehouse is regarded as the grandmaster of humour.
Besides the rich vein of humour (which he achieves, amazingly,
without having to resort to the risqué or crass) the skilful mastery
of his writing contributes to making him one of my all-time
favourite authors; he's one of the rare authors who can make the
English language sit up and beg. 02
40
Sample, for example:
“He was white and shaken, like a dry martini. “
“I turned to Aunt Agatha, whose demeanour was now rather like
that of one who, picking daisies on the railway, has just caught
the down express on the small of the back.”

'Flowers for Algernon' by Daniel Keyes

Though a novelization exists, the short story is what I
recommend and not just to readers of Sci-Fi, though it is
arguably the best Sci-Fi short story I have ever come across.
One of the very rare stories in the form of a diary, it starts with a
man, a mouse and a maze. It ends, for the lack of a more apt
word, beautifully. It is one of the very few books that has
brought me close to tears!

'To Kill a Mockingbird' by Harper Lee

Outwardly, this is a simple and slow-paced story of a child
growing up. No heroics, no drama, no thrilling climax, nothing
you could point to and say, '…this is why I loved this book'. Like
its protagonist, Atticus Finch, this novel is quiet and mild-
mannered for the most part.
And yet, if you asked me to rate it on a scale of 1 to 10, I'd give it
a 12. If you haven't read it yet, do so. Don't hurry; this is not a
book to be rushed through for the sake of finishing it; read it
when in a calm, contemplative mood. You might not like it as
much as I did, but I guarantee one thing it will make you stop
and think.
Anniversary Issue, 2008
Anniversary Issue, 2008
APPLIED MATHEMATICS

The population of this country is 237 million.

104 million are retired.
That leaves 133 million to do the work.
There are 85 million in school,
which leave 48 million to do the work.
Of this there are 29 million employed by the federal government.
This leaves 19 million to do the work.
4 million are in the Armed Forces,
which leaves 15 million to do the work.
Take from the total the 14.8 million people who work for State and City Government and that leaves 200,000 to do
the work.
There are 188,000 in hospitals,
so that leaves 12,000 to do the work.
Now, there are 11,998 people in Prisons.
That leaves Just two people to do the work. You and me.
And you're just sitting there reading jokes all day!

Anniversary Issue, 2008

Credits

Chief Editor
Gayathri
Muthuramanathan

Chief Designer
Sheetal Lade

Special thanks to

Sachin S Deorukhakar
Amitoj Kaur
And an astronomer said, "Master, what of Time?"

And he answered:

You would measure time the measureless and

the immeasurable.

You would adjust your conduct and even direct

the course of your spirit according to hours and
seasons.

Of time you would make a stream upon whose

bank you would sit and watch its flowing.

Yet the timeless in you is aware of life's

timelessness,

And knows that yesterday is but today's memory

and tomorrow is today's dream.

And that that which sings and contemplates in

you is still dwelling within the bounds of that
first moment which scattered the stars into
space.

Who among you does not feel that his

power to love is boundless?

And yet who does not feel that very love,

though boundless, encompassed within
the centre of his being, and moving not
form love thought to love thought, nor
from love deeds to other love deeds?

And is not time even as love is,

undivided and paceless?

But if in you thought you must

measure time into seasons, let
each season encircle all the
other seasons,

And let today embrace the

past with remembrance and
the future with longing.

Khalil Gibran