PROJECT REPORT ON(Entrepreneurship management)

M. Com PART – II SEMESTER III

Submitted by (Akash Shah)

ROLL NO. ( 113 )Under the guidance of

Prof. Sameer Velankar

Submitted to UNIVERSITY OF MUMBAI

In partial fulfillment of the required for the award of degree Master of Commerce – Business Management

GURU NANAK KHALSA COLLEGE OF ARTS, COMMERCE & SCIENCENathalal Parekh Marg, Matunga (E), Mumbai – 400 019

2013-14

1

DECLARATION

I, ( Akash Shah ) of GURU NANAK KHALSA COLLEGE OF ARTS, COMMERCE &

SCIENCE pursuing M. Com Part – II specialization in Business Management hereby declare that

I have completed the project on (Entrepreneurship management) in the academic year 2014-15

for the Semester - III programme.

The information submitted is true and original to the best of my knowledge.

Signature of the Student, (Akash Shah)

2

ACKNOWLEDGEMENT

At the outset, I am thankful to the University of Mumbai for offering the project in the syllabus. I

would like to thank the Principal Dr. Ajith Singh of the College for giving me the opportunity for

pursuing M. Com Part – II Semester – III programme from the esteemed College.

I would like to thank our M. Com programme Co-ordinator, Prof. Sameer Velankar for providing

us the necessary help and support in carrying out our project work.

I would like to thank my project guide, Prof. Sameer Velankar in giving me the valuable

guidance and suggestions in completion of my project work. It would not have been possible for

me to complete the task without their help and guidance.

I must mention my hearty gratitude towards other faculties, my family, and friends who

supported me to go ahead with the project.

I hereby acknowledge all those who directly or indirectly helped me to draft the project

report.

3

CERTIFICATE

This is to certify that the project titled “Entrepreneurship management” is true and satisfactory

work done by Akash Shah, M. Com Part – II, Semester – III, Roll no.113. The project report is

submitted to the University of Mumbai in partial fulfilment of the requirements of the award of

the degree of M. Com Part – I, for the academic year 2013-14.

__________________________ ____________________________Signature of the Project Guide Signature of the External Examiner

__________________________ _____________________________Signature of the Co-ordinator Signature of the Principal

4

Index

Sr. No Particulars Page No

1 Introduction 6

2 Meaning 7

3 Qualities 8

4 5 Entrepreneurs 10

5 Challenges 27

6 Venture, Product & Services 36

7 Financial Performance 41

8 Conclusion 46

5

Introduction of Entrepreneurship

The word ‘entrepreneur’ has its origin in the French language. It refers to the organiser of musical or other entertainments. Entrepreneurship can be described as a creative & innovative response to the environment. Such response can take place in any field of social Endeavour-business, agriculture, education social work the like.

An entrepreneur is one who organizes, manages & assumes the risk of an enterprise. An entrepreneur visualizes a business, takes bold steps to establish under taking, co-ordinates the various factors of production gives it start. Entrepreneurs are the owner of the business who contribute the capital & bear the risk of uncertainties in business life. Entrepreneur is action-oriented & highly motivated person who has the ability to evaluate business opportunities, to gather the necessary resource to take advantage of them & to intimate appropriate action to ensure success. Entrepreneur takes decision regarding what to produce, where to produce & whom to produce. He mobilizes other factors of production namely; land, Labour, capital, organization& initiates production process. He is responsible for either profit or the loss. Entrepreneur is associated with innovations. He is the main factor of production.

Entrepreneurial Philosophy

1. To take calculated risk2. Willingness to accept responsibility for one’s own work .3. Failure must be accepted as a learning experience. 4. Goal oriented. 5. Acceptable results are more important than perfect results.6. Personal growth.

6

Meaning

An individual who, rather than working as an employee, runs a small business and

assumes all the risk and reward of a given business venture, idea, or good or

service offered for sale. The entrepreneur is commonly seen as a business leader

and innovator of new ideas and business processes.

Cantillon defined the term as a person who pays a certain price for a product and

resells it at an uncertain price: "making decisions about obtaining and using the

resources while consequently admitting the risk of enterprise." The word first

appeared in the French dictionary entitled "Dictionnaire Universel de Commerce"

compiled by Jacques des Bruslons and published in 1723. Successful

entrepreneurs have the ability to lead a business in a positive direction by proper

planning, to adapt to changing environments and understand their own strengths

and weakness.

Entrepreneur is Someone who exercises initiative by organizing a venture to

take benefit of an opportunity and, as the decision maker, decides what, how,

and how much of a good or service will be produced.

According to economist Joseph Alois Schumpeter (1883-1950), entrepreneurs are

not necessarily motivated by profit but regard it as a standard for measuring

achievement or success.

Schumpeter discovered that they

1. Greatly value self-reliance,

2. strive for distinction through excellence,

3. are highly optimistic (otherwise nothing would be undertaken), and

7

4. Always favor challenges of medium risk (neither too easy, nor ruinous).

Qualities

Successful businesspeople have many traits in common with one another. They

are confident and optimistic. They are disciplined self starters. They are open to

any new ideas which cross their path. Here are ten traits of the successful

entrepreneur.

1. Disciplined -These individuals are focused on making their businesses work,

and eliminate any hindrances or distractions to their goals. They have

overarching strategies and outline the tactics to accomplish them. Successful

entrepreneurs are disciplined enough to take steps every day toward the

achievement of their objectives.

2. Confidence -The entrepreneur does not ask questions about whether they can

succeed or whether they are worthy of success. They are confident with the

knowledge that they will make their businesses succeed. They exude that

confidence in everything they do.

3. Open Minded-Entrepreneurs realize that every event and situation is a

business opportunity. Ideas are constantly being generated about workflows and

efficiency, people skills and potential new businesses. They have the ability to

look at everything around them and focus it toward their goals.

4. Self Starter-Entrepreneurs know that if something needs to be done, they

should start it themselves. They set the parameters and make sure that projects

follow that path. They are proactive, not waiting for someone to give them

permission.

8

5. Competitive-Many companies are formed because an entrepreneur knows

that they can do a job better than another. They need to win at the sports they

play and need to win at the businesses that they create. An entrepreneur will

highlight their own company’s track record of success.

6. Creativity-One facet of creativity is being able to make connections between

seemingly unrelated events or situations. Entrepreneurs often come up with

solutions which are the synthesis of other items. They will repurpose products to

market them to new industries.

7. Determination-Entrepreneurs are not thwarted by their defeats. They look at

defeat as an opportunity for success. They are determined to make all of their

endeavors succeed, so will try and try again until it does. Successful

entrepreneurs do not believe that something cannot be done.

8. Strong people skills-The entrepreneur has strong communication skills to sell

the product and motivate employees. Most successful entrepreneurs know how

to motivate their employees so the business grows overall. They are very good at

highlighting the benefits of any situation and coaching others to their success.

9. Strong work ethic-The successful entrepreneur will often be the first person to

arrive at the office and the last one to leave. They will come in on their days off to

make sure that an outcome meets their expectations. Their mind is constantly on

their work, whether they are in or out of the workplace.

10. Passion-Passion is the most important trait of the successful entrepreneur.

They genuinely love their work. They are willing to put in those extra hours to

make the business succeed because there is a joy their business gives which goes

beyond the money. The successful entrepreneur will always be reading and

researching ways to make the business better.

9

5 Entrepreneurs

Larry Page and Sergey Brin

"Basically, our goal is to organize the world's information and to make it universally accessible and useful."--Larry Page

"To me, this is about preserving history and making it available to everyone"--Sergey Brin

Co-founders of GoogleFounded: September 1998

Like all good genius start-up stories, Larry Page and Sergey Brin founded Google Inc. in a friend's garage in Menlo Park, Calif. Since its incorporation on September 4, 1998, the company has grown to nearly 20,000 full-time employees worldwide, and with a steady stream of new product developments, acquisitions, and partnerships, has extended its reach far beyond its modest beginnings as a web search engine. Perhaps even more impressive is Google's image as the pinnacle of cool, with a reputation for being hip, innovative and wildly successful--all without compromising its "Don't be evil" philosophy.

Larry Page's interest in technology began when his father, the late Carl Page--Michigan State professor and pioneer in the fields of computer science and artificial intelligence--gave him a computer at the age of six. Page graduated with honors from the University of Michigan with a bachelor's degree in engineering and concentration in computer engineering. He achieved his undergraduate claim to fame by building an inkjet printer out of Lego blocks.

Page worked for a few years in the technology industry before deciding, at the age of 24, to pursue a Ph.D. in computer science at Stanford University. It was there, as a prospective student, that he met Sergey Brin, who was assigned to show him around the campus. Brin, originally from Moscow, moved to the U.S. with his family when he was 6 years old. He received his bachelor's degree in mathematics and computer science, with honors, from the University of Maryland, where his father taught mathematics. At Stanford, he was studying

10

ways to extract patterns and relationships from large amounts of data.Google's own website implies that the two disagreed "about most everything" during this first meeting.

But their friendship was given the chance to blossom in 1996, when Brin joined Page in his BackRub research project, exploring backlinks--links on other websites that refer back to a given webpage--as a way to measure the relative importance of a particular site. The pair then developed the PageRank algorithm (named after Page), hypothesizing that using this tool, they could produce better results than existing search engines, which returned rankings based on the number of times a search term appeared.

They tested the BackRub search engine later that year on Stanford's servers. Without a web developer, they kept the search page simple, but were challenged to find enough computing power to handle queries as the search engine become increasingly popular.

"At Stanford we'd stand on the loading dock and try to snag computers as they came in," Page said in an interview with Technology Review in 2000. "We would see who got 20 computers and ask them if they could spare one."

Page and Brin eventually renamed the search engine Google, as a play on the word "googol," a mathematical term represented by the numeral one followed by 100 zeros--a reflection of their mission to organize the seemingly infinite amount of information on the internet.

Reluctant to leave their studies, the duo ran the operation out of their dorm rooms. But by mid-1998, Google was getting 10,000 searches a day; so, finally convinced, they maxed out $15,000 worth of credit cards to purchase a terabyte of disk space and drafted a business plan.

Things have gone well since then. In August 2004, Google went public with an IPO that raised $1.67 billion, and in typical Google fashion, became the first and only company to allocate its stocks using computers rather than Wall Street bankers. For the quarter ending June 30, 2008, the company reported revenues of $5.37 billion, an increase of 39 percent compared to the second quarter of 2007.

11

The famous Googleplex headquarters in Mountain View, Calif., is also something to boast about. Known for its relaxed atmosphere and envy-inducing employee perks like subsidized massages, on-site stylists, and three free gourmet meals a day, the campus currently spans 2 million square feet of office space, and a recent acquisition will soon add another 1 million square feet.

Google's "Milestones" page reads more like a novel than a series of highlights, but there's still more to come. In a 2005 interview with Financial Times, Brin stated, "There's a lot of room for improvement, there's no inherent ceiling we're hitting up on." And so far, that's been the case, from the $1.65 billion purchase of YouTube down to the continued development of the ubiquitously popular GoogleMaps and Picasa photo applications.

To say that Google has had a tremendous impact on the internet is the definition of understatement. After all, the company has already found its way into the vernacular--as a verb, no less. In 2006, the word "google" was added to the Merriam Webster Dictionary as, "to use the Google search engine to obtain information on the World Wide Web."

Page and Brin are both on leave from Stanford, but success has kept them busy. They are still involved in daily operations at Google as president of products and president of technology, respectively.

12

Rana Kapoor

For Dr. Rana Kapoor, founder, MD and CEO of YES Bank, entrepreneurship has no retirement age. He believes that a lot of perseverance and risk-taking are what makes a successful company. He should certainly know as he has succeeded in setting up a modern institution in an age old sector such as banking. Along with a team of owners, managers, and partners, he and his partner, the late Ashok Kapur, established YES Bank in 2004 with the sole objective, from day one, of building a futuristic bank of global standards in the Indian milieu.

He built the bank around five key brand pillars – growth, trust, human capital, technology, along with transparency and responsible banking. Since incorporation, the bank has grown well and has maintained a consistent net interest margin between 2.7 per cent and 3.2 per cent over the past five years through periods of rising and declining interest rates. With over 350 branches and 600 ATMs throughout the country, it has reported a net interest income of Rs. 1,616 crore and net profit of Rs. 977 crore for the financial year ending March 2012. In a span of nine years, the bank has received significant national and global recognition and accolades. It was recognized as India’s No. 1 new private sector bank at the Financial Express Best Banks Awards 2011, and the fastest growing bank in the Business Today-KPMG Best Banks Annual Survey 2008, 2009 and 2010. YES Bank received the Rank 1 sustainable bank of the year (Asia/Pacific) award at the FT/IFC Sustainable Finance Awards 2011, London, and in 2008, was ranked the Emerging Markets Sustainable Bank of the Year.

Kapoor believes that entrepreneurs go through a lifecycle during which one has to redefine the original vision with which they started out to build their company. “There have to be orbit changing interventions when one goes through a lifecycle of entrepreneurship,” he says. When he started YES Bank, its version 1.0 (named in retrospect today), covering a period from its incorporation to 2010, was to set up a small bank with innovative strategies to survive among the much established and powerful players while maintaining a low cost base. Kapoor then had to redefine the bank’s original goal, and shifted the bank’s journey to the next gear and YES Bank is currently going though its version 2.0 (read more about version 2.0 in pg.26) growth phase defined by the need to scale up its operations to meet the opportunities seen in the space.

13

Kapoor shares with us the 10 things he did right during this initial period at YES Bank, which form the strong foundation on which the bank will continue its growth journey.

1. Fulfilling a dream

“It all started with a dream,” recalls Kapoor. In 1979, when he was a summer trainee (while studying at Rutgers’ University) in New Jersey, U.S., he used to go to New York City often and was awestruck by the big banks and its buildings towering over the skyline. He wanted something like that in India. “I think the dream was born there. Those were, of course, the early days,” he adds. As he progressed in his work life, starting as a corporate banker in Bank of America, then an investment banker in ANZ Grindlays and later, as an entrepreneur in Rabo India Finance (which was on a build, operate, own and transfer basis) in partnership with Rabobank in India, he felt that he would eventually get to build a bank of his own. When he got the right opportunity, he evangelised his dream to a group of people, thus evolving a common platform for sharing a dream and making it a collective proposition and YES Bank was born in 2004.

This was also the time when a new category of players called the professional entrepreneurs evolved. “This is an oft used term now, but back then it was not common to read or discuss professional entrepreneurship,” says Kapoor. The term perfectly described people like Kapoor, who got an opportunity to embark on an Indian banking venture, after serving as an executive in a couple of foreign banks for 18 years. “The concept of professional entrepreneurship struck the right chord and it helped build professional chemistry around this point,” recalls Kapoor.

2. Create ownership

His team members were evolving as owners-managers-partners in this shared proposition. “The top management realised that this was almost a once in a lifetime opportunity to build a brand new bank in modern India at a time when the Indian economy was picking up,” says Kapoor. India was entering a five-year economic boom between 2003 and 2008 then. And Kapoor created an ownership structure amongst his top executives (who were mostly ex-colleagues or people recruited from large private and foreign banks in India) in the form of a good salary structure, bonus and ownership stock options. He had the long term

14

commitment of his people by granting stock options, which was motivating his team to conduct themselves as owner-manager-partners. “It was the best-of-breed combination, consisting of people with different skill sets in different areas which helped in setting up the plumbing lines of the bank,” says Kapoor. The systems, processes, procedures and controls are a very important aspect of a bank’s architecture. And this has kept the bank in good stead even as it is scaling into its version 2.0.

3. It’s all in a name

“What I didn’t realise then, but now I do in retrospect, is the simplicity, positivity and the service proposition that the brand YES signifies,” says Kapoor. He believes that the banks’ differentiation and ingenuity begins with its services and the trust it creates. Above all, the name YES implies this fundamental goal of being a service-oriented institution. This apart, the idea was to create and convey an institutional image with a name that has pan India recognition as a new age Indian bank. “Most of these points synergise in the name itself and when we did our qualitative research, the name YES resonated very well,” he says.

“The art of banking is the management of risk. You run a risk if you do something, but you run a bigger risk if you don’t do anything. We have a moderate risk appetite but are very proactive with management systems, red flags, trouble-shooting actions, well-orchestrated strategies in terms of regulatory processes. It’s not like we don’t have problems. It’s just that the risk and credit culture of the bank is part of our blood stream. A bank has to be built around risk management.”

4. Governance and transparency

Strong governance and transparency in the business model, right from the beginning, has built confidence with the team, in the market place and with the regulators. In fact, from its inception, YES Bank has had a strong governing board, with more than 50 per cent being independent directors. This was just around the time (in early 2004) when the Ganguly Committee recommendations to the Reserve Bank of India (RBI) and Clause 49 from SEBI (Securities and Exchange

15

Board of India) had just come into effect stating such a proposal besides others. “We were way ahead when it came to appointing our independent directors and we have maintained it that way so far,” says Kapoor. At present, the bank has over 70 per cent independent directors. Independent directors are expected to be independent from the management and act as the trustees of shareholders. This means that they have to be fully aware of and question the conduct of the organisation on relevant issues.

5. Institutionalise the bank

“A very good validation of our business and financial model was the fact that instead of getting granular investors, we chose to institutionalise the bank from the very inception,” says Kapoor. He got the AAA-rated Rabobank to take a 20 per cent stake at par value (it has since then sold its stake in 2010 and 2012) and at a very nominal premium, he brought in three private equity investors– CVC Capital Partners, a division of Citibank (10 per cent stake), AIF Capital from Hong Kong (7.5 per cent stake), ChrysCapital (India and the U.S. for 7.5 per cent stake). “All three PE firms monetised their investment in 2007 / 2008 with a gain of 15 per cent to 17 per cent,” shares Kapoor. Even though the bank was founded by Kapoor and his partner, the late Ashok Kapur (the non-executive chairman), who were both professional entrepreneurs, they actually went on to evolve an institutional organisation. The two partners gave 45 per cent stake away and of their remaining 55 per cent, three per cent was given to top six managers who joined them at inception. The institutionalisation of the bank started right then.

6. Outsource the technology

The bank took the first major innovative decision to outsource its entire technology requirements to Wipro Infotech, an IT services organisation with presence in India, APAC and Middle East. Gartner India (its strategic advisor to develop a comprehensive IT strategy) and YES Bank’s in-house innovation team (business management, innovation and strategy team was conceived right at its inception) along with the stakeholders collaborated to work on a first-of-its-kind outsourcing solution for a bank in India. “While Wipro Infotech was doing similar work overseas, they got their first outsourcing Banking contract in India from us and that partnership is almost 7.5 years old today,” shares Kapoor. The bank has outsourced the core IT infrastructure and hardware, networking, managing the data centre and backup support for disaster recovery, hardware procurement and

16

servicing of network. “After us, a number of other private and public sector banks replicated this model,” says Kapoor. This outsourcing partnership has resulted in cost savings of almost 30 per cent for the bank, and has enabled it to focus fully on its core business of banking and strategic initiatives.

Building excellence in service delivery is critical for Kapoor and his team, and the bank partnered with leading edge technology providers to do so. It was the first bank to use treasury trading solution from a French firm, Murex, in India and has first-of-its-kind service technologies like Money Monitors, which aggregates all the financial information. In 2006, YES Bank was invited by Intel Technologies to Shanghai to visit a mock-up of the ‘bank branch of the future’ powered by Intel’s technologies. After the visit, the bank partnered with Intel to put up a live, proof-of-concept bank branch of the future in India. Spread over 15,000 square feet, the branch is located in South Extension in New Delhi and is called the YES-Intel Global Innovation Center. Intel launched its first WiFi-enabled bank branching network from the location. It has also partnered with Nokia for the global launch of mobile money transfer.

7. Driven by knowledge

Yes Bank has a knowledge-driven culture. A critical differentiator in its business acquisition and risk management strategy has been the knowledge banking platform (identifying specific growth sectors and developing customised solutions for industry verticals) that was created through sharp segmentation of industries, of geographic spread and size. “Our relationship managers, product managers and risk managers have a diagnostic and prescriptive approach to their clients in a particular industry,” shares Kapoor. This approach was very much in sync with India’s economic condition then as the country was evolving and taking centre stage as the knowledge economy of the world. “While other banks do have specialised banking in small parts, it is not embedded in the genetics of their bank,” says Kapoor. Historically, traditional banks have a universal banking approach. “Be it a steel company, healthcare, or hospitality, they probably have the same person taking care of the sectors. In Yes Bank, if it’s agribanking, we hire agricultural management graduates; in healthcare, we get people from the healthcare industry,” Kapoor points out. They work with the general management professionals to multiply the knowledge pool. The bank is now deepening and widening this strategy and, moving forward, Kapoor expects this strategy to become a bigger differentiator as the bank scales.

17

8. Make it public

The really bold decision of the bank, apart from naming it YES, was to come out with an initial public offering (IPO) within nine months of its inception. “We had to launch the bank,” states Kapoor. So, to do it most effectively, he wanted to build the best internal and external confidence, implement the highest levels of governance, transparency and accountability, and also in a way make it responsible, literally, every day and definitely every quarter, to the public. After all, a bank by very definition is a public trust institution. And, according to Kapoor, an IPO does all of this. It launches a bank, gets governance, builds the report card, shows people that there is some wealth that is being created due to hard work in the inception stages and there is a trajectory to all of this. The bank came out with an IPO of 70 million shares in July 2005 raising Rs. 315 crore of capital at a price of Rs. 45 per share. It got oversubscribed 30 times.

9. Be responsible, socially

“One other thing which has been mission critical is as we were born in 2004, we conceived our corporate social responsibility strategy both at a corporate level (through Responsible Banking) and at retail level (via YES Community Banking),” says Kapoor. Responsible Banking has an objective of developing innovative business solutions to social and environmental problems. It comprises of three business verticals – agribusiness, rural and social banking; microfinance and sustainable investment banking, which addresses sustainable ventures such as social, alternative energy and environment.

In 2008, the bank launched YES Community, a Responsible Banking initiative across its retail branches nationally. YES Bank has won many accolades as a sustainable bank in India in 2012, 2011 and 2008. Kapoor has received the Godfrey Phillips Bravery ‘National Special Social Award’ for actively driving the vision of Responsible Banking.

18

10. Thin, lean and agile

Simple as it may sound, a thin, lean and agile team with good management frameworks has been instrumental in maneuvering YES Bank to where it is today. This has been a very important factor in building the agility, productivity and cost competitiveness in the institution. “I even presented cheetah desktop statues to 500 members of my team so that they think and believe in agility and seize the opportunity that comes along their way. In difficult times, we need well-defined management teams with clear focus, vision and strategies,” says Kapoor.

19

Sachin Bansal and Binny Bansal

It was meant to be a portal that compared different e-commerce websites, only there weren't enough of them to be compared. Thus was born Flipkart, making sure that online shopping would never be the same again in India.

From a two-member embryonic idea to a 4,500-member company, the Flipkart story is not just about stupendous success and mind-numbing numbers. Much more than that, it's about redefining customer experience and breaking online shopping inertia.Started in 2007 by Sachin Bansal and Binny Bansal -- both from the Indian Institute of Technology-Delhi (IIT) and with prior experience in Amazon -- the Bangalore-based firm ships close to 30,000 items per day.

Or, in other words, 20 products per minute.

"We are clocking daily sales of Rs..2.5 crore ($ 5 mn). Our growth rate has been 100 per cent quarter on quarter," Sachin Bansal, CEO of Flipkart, told IANS.

But the interesting part is that around 60 per cent of Flipkart's orders are cash or card on delivery.

"Indian consumers are much more cautious about shopping online as compared to the West. They are reluctant to divulge credit card details. The cash on delivery service has helped a lot of traditional consumers turn to online shopping," he adds.

Also, the model has unbolted the lock to a whole new customer base, which hasn't been exposed to the benefits of plastic money as yet or those with a default technological handicap.

"I've never understood how to pay by card online. The best I can do is use an ATM. I wish more websites had the cash on delivery option," says Sneha Anand, a school teacher.

20

Sonal Nangia, senior vice president (retail) at Technopak, attributes Flipkart's success to the "superior customer experience it offers".

"Right from browsing to delivery, you can track your order. You can pre-order an unreleased book, get good prices, even the customer service is very strong. Raise any issue, it's efficiently resolved," Nangia told IANS.

Adds Sachin Bansal: "When we started, the customer experience offered by e-commerce sites was below average. Our aim was to address this. We feel that it's this focus on customer satisfaction and ownership of the customer experience that has worked in our favor."

The superior customer service notwithstanding, Flipkart's biggest draw has probably been the huge discount it offers -- much to the envy of offline stores.

"I was waiting to lay my hands on Haruki Murakami's new book '1Q84'. But it was way too expensive at Rs..1,000. But Flipkart had a flat 30 percent discount, and I got it inRs..700," says Madhura Vishvakarma, a Delhi University student.

Though all bookstores get up to 50-60 per cent discounts from publishers, the low overheads -- one of the numerous virtues of online stores -- enables Flipkart to pass on the savings in the form of discounts.

Flipkart started with books, but now deals in 12 product categories.

The company stocks nearly 11.5 million titles, "making us the largest book retailer in India. As per data, we have 80 per cent share of the online book market", Sachin Bansal says.

So will this trend spell doom for offline bookstores?

"No," believes Anuj Bahri of Bahrisons.

"There's a huge market for everyone to co-exist. Besides, Flipkart's market is totally different, young people of 20-25 age group buy books from them. Some 80 per cent of their business is chic literature. The more sensible and mature readers will always go to a bookstore," Bahri told IANS.

But Nangia of the Gurgaon-based Technopak begs to differ.

21

"The traditional stores are to suffer. Internationally also that has been the trend."

She believes the increasing "access to internet, more iPads, smart phones, sophisticated technology that gives 3D view of products, time poor consumers, increasing costs of real estate, will all lead to a shift to digital commerce".

But with Amazon, considered a big shark in online retail space, already knocking at India's door, will that result in dwindling fortunes for Flipkart?

"No, India is a huge market, there is much more space for more e-retail stores," says Sonal.

Bahri, however, feels there is a palpable danger. "Flipkart works because of discounts. Amazaon can offer greater discounts as it can take bigger losses being a bigger company. That will change the dynamics," he said.

Already, there are players like Infibeam, Naaptol and Letsbuy in the market.

According to an Associated Chambers of Commerce and Industry of India (Assocham) survey, the online retail market in India may grow to Rs..70 billion (over $1.30 billion) by 2015 from Rs..20 billion in 2011 as internet access improves.

22

Mark Zuckerberg

"Facebook's mission is to give people the power to share and make the world more open and connected."--Mark Zuckerberg

One might assume that information would abound on the founder of a high-profile, multi-billion-dollar social networking site. Wrong. Information on Mark Zuckerberg is surprisingly scarce. Maybe that's just because the 24-year-old Harvard dropout has only ever held one job: CEO of Facebook.

Zuckerberg grew up in the New York City suburb of Dobbs Ferry, N.Y., and attended the Phillips Exeter Academy in New Hampshire. His father is a dentist, his mother a psychiatrist, and he has three sisters. He taught himself how to program computers, and during his senior year in high school, he and fellow hacker-programmer Adam D'Angelo caught the interest of AOL and Microsoft by creating a Winamp plug-in that could build customized playlists.

But both turned down job offers in order to attend college in 2002--Zuckerberg to Harvard and D'Angelo to CalTech. But Zuckerberg's undergraduate career in computer science wasn't destined to last. Not content to just study programming, he created a photo-rating site called Facemash, using photographs of other Harvard students from the school's online facebook (a yearbook-like publication designed to introduce students to one another). But he created his program by hacking into student records and using photos without permission, and was reprimanded by the administration for violating privacy rules and breaching computer security.

Zuckerberg, however, wasn't deterred. He eventually finished the platform for "The Facebook" (sometimes at the expense of attending class), combining the concept of traditional facebooks with large-scale social networking sites like Myspace and Friendster.

In February 2004, Zuckerberg launched the program from his dorm room with co-founders Dustin Moskovitz, Chris Hughes and Eduardo Saverin. In just a few weeks, more than half the school had opened accounts. The group quickly expanded to more universities and colleges, and that summer, Zuckerberg and his

23

team moved to Palo Alto, Calif., renting a sublet and hooking up with investors like PayPal co-founder Peter Thiel and Napster co-founder Sean Parker.

By August 2005, Zuckerberg had officially changed the company's name to Facebook, and after raising $12.7 million in venture capital, was ready to move the company to the next level.

The site gradually expanded from college networks to include high school and work groups, and in September 2006, anyone with an e-mail address was allowed to join. Today, there are more than 110 million active users, and according to comScore Media Metrix, which tracks Web activity, Facebook rates as the Web's top photo-sharing site, and is the fourth most-visited site in the world, accounting for more than 1 percent of all internet use.

Of course, Zuckerberg's success hasn't been without some controversy. Some of his college peers have accused him of stealing the code for Facebook, and that court case is still pending. He also caused a media furor when he introduced the Newsfeed function, which shared all activity updates between people in their respective social networks--at first without a privacy option.

In response, Zuckerberg said in a New York Times article that "Facebook has always tried to push the envelope. And at times that means stretching people and getting them to be comfortable with things they aren't yet comfortable with. A lot of this is just social norms catching up with what technology is capable of."

Regardless, the tech titans took notice. In 2006, Zuckerberg astonished the world by turning down Yahoo's offer to buy Facebook for $1 billion. A year later, Microsoft purchased a 1.6 percent stake in the company for $240 million.

No one except Zuckerberg probably knows where the company is going, but even he has said that the site is a "work in progress." Recently, though, prominent Google executives have made a career move to Facebook, which implies the company will be going seriously corporate--and soon, maybe public. But one thing is for sure: Zuckerberg will be a major player in the tech industry for years to come.

And in case you're wondering, you can't friend Zuckerberg on Facebook. That function's been disabled.

24

Dhirajlal Hirachand Ambani

A true rags-to-riches story, Dhirajlal Hirachand Ambani, has been undisputedly India's most enterprising entrepreneur. Born in a gujarati family Dhirubai moved toYemen at the age of 16, where he worked as a dispatch clerk with A. Besse & Co. After working in Dubai for sometime he later returned to India where he founded the Reliance Commercial Corporation with a meager capital of Rs. 15000. He set up the business in partnership with Champaklal Damani from whom he split in 1965. Dhirubhai started his first textile mill at Naroda, near Ahmedabad and launched the brand "Vimal". He later diversified into petrochemicals and sectors like Telecommunications, Information Technology, Energy, Power, Retail, Textiles, Capital Markets and Logistics. He rose from humble beginnings to create India's largest industrial empire, and in the process, became one of the world's richest men. He rewrote India's corporate history for which he was featured among the select Forbes billionaires list. He also figured in the Sunday Times list of top 50 businessmen in Asia. Credited for starting the equity cult in India, Dhirubhai was praised for his key role in shaping India's stock market culture by attracting hordes of retail investors to a market monopolized by state-run financial institutions. He never followed the traditional way and was often targeted for his business strategies due to which he courted controversy all throughout his life. The 'Dhirubhai school of management' firmly believed that the only thing which mattered were the end results and the benefits which infiltrated directly to the shareholders. He won many awards and accolades during his lifetime. In 2000, he was conferred the 'Man of the Century' award by Chemtech Foundation and Chemical Engineering World for his contribution to the growth and development of the chemical industry in India. In 1998, he was awarded the Dean's Medal by The Wharton School, University of Pennsylvania, for setting an outstanding example of

25

leadership. Dhirubhai Ambani was also named the "Man of 20th Century" by the Federation of Indian Chambers of Commerce and Industry (FICCI). A perfect amalgamation of grit and determination, Dhirubai believed in his dreams and he lived it. He was of the belief “Dhirubhai will go one day. But Reliance's employees and shareholders will keep it afloat. Reliance is now a concept in which the Ambanis have become irrelevant.” In 1986 after a severe heart stroke he handed over Reliance Group to his sons Mukesh and Anil. After his death, the colossal corporate group was split into Reliance Industries, headed by Mukesh Ambani and Reliance Anil Dhirubhai Ambani Group (ADAG), led by Anil Ambani. A visionary by birth, his life has been an inspiration for many and will serve as a beacon light for the generations to come.

26

Challenges

Rana Kapoor

It was the high noon of liberalisation. The dismantling of the Licence Raj had unleashed a new wave of energy. Mumbai banker Rana Raj Kapoor was restless. Having worked with Bank of America for 15 years, the last two spent overseeing its lucrative wholesale banking business, Kapoor wanted to break out of the executive mould and turn entrepreneur.

In mid-1995, Kapoor, a Delhi University graduate with an MBA from Rutgers University, flew to the United States to make a presentation to the top brass of an American insurance giant. "My plan was to set up an NBFC, or a non-banking financial company, in India," he says. The insurer hinted it would be willing to take a majority stake in the proposed NBFC with a $5 million (Rs 22.5 crore) capital. On his return to India, an excited Kapoor shared his plan with his brother-in-law Ashok Kapur, then Country Head of ABN AMRO Bank. Though Kapur liked the plan, he felt the proposed NBFC would be too small. He convinced Kapoor to angle for a bigger NBFC, and introduced him to friends at the Dutch financial services player Rabobank NV.

Soon Kapoor quit Bank of America and

joined ANZ Grindlays Investment Bank as

Country Head in India. During his two years at

Grindlays, Kapoor held hush-hush meetings with

Rabobank representatives. "Finally, we locked

ourselves in a hotel room and hammered out an

agreement," says Kapoor, recalling how he,

Kapur and Harkirat Singh, former Country Head

of Deutsche Bank, sealed the deal for a 25 per

cent stake in an NBFC, Rabo India Finance, to be set up in partnership with

Rabobank.

27

Yes BankFounder: Rana Kapoor, 53Wife: BinduDaughters: Raakhe works with YES Bank, Radha runs her own business, DoIt Creations, Roshini is studyingWhy I did it: "I was very restless. I wanted to start something entrepreneurial."Total turnover: Rs 2,369 crore in 2009/1

Even though the talks had coincided with the South-East Asian currency crisis of

1997, an undeterred Kapoor went ahead and set up the NBFC in early 1998. "I

believe it is always a good idea to start in times of adversity," says Rana, adding:

"It makes the entrepreneurial journey much more challenging."

The challenges did not end with the setting up of the NBFC. "I consumed

whatever I had saved in my 17 years of service," he says. Initially, no money was

coming in, and he had three young daughters to raise. By 2000, Kapoor had begun

eyeing a banking licence. But he had trouble raising the seed capital for the bank.

"We made the rounds of private equity funds to invest in our venture," he says.

Then, barely a year after the Reserve Bank of India gave an "in principle" nod to

their greenfield banking venture, YES Bank, one partner, Singh walked out, citing

differences, in April 2003.

After the RBI granted a formal approval to YES Bank in 2004, the next big

challenge was doing a successful initial public offering, or IPO, to raise funds from

the market. Here, Kapoor succeeded beyond market expectations, with his bank

netting Rs 315 crore with the issue oversubscribed 30 times. "The YES Bank brand

was actually born with the IPO," says Kapoor, "We initially decided to do only

corporate banking where we didn't need a branch network, as against retail

banking," he says.

Today, YES Bank has revenues of Rs 2,369 crore and a market capitalisation of Rs

9,500 crore as of March 31 this year. But now Kapoor is working hard to build the

28

bank's retail side as well. YES Bank currently has 185 retail

branches across the country and is in the process of opening

many more. "We are entering a new stratosphere," he says of

the bank's transformation plan for the next five years after

which he would like his bank's portfolio to consist of 40 per

cent wholesale banking, 30 per cent mid-corporate commercial

banking with small and medium enterprises, and retail banking

accounting for the rest.

Meanwhile, the daughters had grown up. Raakhe, the second

among them, joined YES Bank just before the IPO, and found it

a great learning experience. An Economics graduate and MBA

from Wharton Business School, Raakhe is currently Business

Manager of Strategic Initiatives in the CEO's office. "I want to

evolve as a financial entrepreneur," she says.

Eldest daughter Radha is an entrepreneur already, but has

nothing to do with YES Bank. Her holding company, DoIt

Creations, owns two operating companies, one for dry cleaning

premium clothes and the other for creating interior and

exterior arts in the commercial spaces. The youngest daughter,

Roshini, is still studying.

Kapoor, however, has lost brother-in-law Kapur, who played a

key role in building YES Bank and was formerly its Chairman.

29

Kapur, who was dining in one of the restaurants at the Oberoi-

Trident in Mumbai on November 26, 2008, was a victim of the

terror attack that night.

Kapoor and his bank have won several awards over the past

five years. The latest was from the Bombay Management

Association in March which felicitated Kapoor as the

entrepreneurial banker of the decade. He is perhaps the first

Indian professional to have successfully set up a greenfield

banking venture, which is now the fourth-largest private sector

bank in India in terms of total assets.

What's next? "I want to give an institutional character to YES

Bank," says Rana. That should not be difficult. Rana and his

family are spreading their wings to emerge bigger and bigger in

the decades to come.

Mark Zuckerberg

As Facebook stands set to file for its historic initial public offering, CEO Mark Zuckerberg faces some pretty monumental leadership demands. There are the internal ones: Retaining newly minted millionaires. Keeping employees focused on great products, rather than just high stock prices. Hanging on to a startup vibe and an entrepreneurial feel even as the social network company balloons in size.

30

But Zuckerberg will also confront a host of tricky challenges with customers, too. For one, the company has long infuriated its users when changes to its privacy policy are made with little fanfare. Because Facebook was a young startup company, users were angry when such modifications took place, but seemed willing to absolve the company and move on. If there’s a sense that such moves are being made solely to increase profits, benefit Wall Street and boost share prices at the expense of customers, however, users could be much less forgiving.

Second, Zuckerberg himself will be faced with a shift in how he’s expected to manage external relations. This is already an extremely wealthy young man who does not exactly have a reputation for being warm and fuzzy. He is about to get exponentially wealthier. Yes, he made a massive gift to education reform and seems a little more willing to open up about his life with the press. But as one of the few, if only, current public company CEOs to have been the star of an unflattering Oscar-winning film about him and the founding of his company, expect Zuckerberg to be asked to do more reaching out to users and the public to help soften his image.

Finally, Zuckerberg could ruffle feathers with users if they’re not let in on the IPO action. When Google went public in 2004, the company held an unusual Dutch auction style IPO that allowed the public to participate, even if the process itself wasn’t very smooth. Some are speculating that Facebook could do the same, or at least do so for its 800 million users. This is a company, after all, whose power is built on the fact that all those millions of people have been willing to post their baby pictures, “like” their favorite businesses and share their most intimate thoughts so that marketers can turn around and advertise to them. You can see how they might like to get something in return.

Being the CEO of a public company is a very different job than being an entrepreneur of a privately held startup. There are requirements from the SEC, of course. But there are also heightened, if less scripted, expectations that you will be more open and transparent with your customers now that you must be so with your public investors, too.

This is especially the case with Facebook. The company’s power is in its users’ willingness to share, to open up, to tell the world what they are thinking, doing and potentially buying. If Facebook goes public and its CEO doesn’t provide the same kind of transparency with its customers it is now expected to offer its

31

investors, it could be even more troublesome for a company fundamentally built on the premise of sharing.

Sachin Bansal and Binny Bansal

In 2007, when Indian software engineers Sachin Bansal and Binny Bansal were starting their online bookstore Flipkart.com out of a two-bedroom apartment, they faced a challenge Amazon.com (AMZN) founder Jeff Bezos never had: how to collect payment. At first the two, who aren’t related, accepted credit cards, but because few Indians use them, they needed a way to conduct e-commerce in

32

cash. Payment-on-delivery was the obvious solution, but Flipkart didn’t want third-party couriers to carry large quantities of its money. So in 2010 the company decided to remake itself as a version of both Amazon and United Parcel Service (UPS).Becoming a delivery service brought a slew of infrastructure problems. India has no standardized street address system, and road conditions are rough. Often a building name, street, and series of landmarks are needed to locate a house. And customers have to be home to receive a package. “You cannot leave anything outside the door, because it will just disappear,” says Ashok Banerjee, Flipkart’s former vice president for logistics, now chief technology officer for e-business at Symantec(SYMC) in California.The entrepreneurs looked at distribution as a technology problem. “The advantage we had was we were not a logistics company trying to do e-commerce,” says Mekin Maheshwari, head of human resources. “Because we were creating the systems completely in-house, we could actually solve it.” With venture funding from Tiger Global Management, Flipkart’s engineers developed systems to determine the best warehouse locations; it has six across the country. It alerts customers by text several hours before a scheduled delivery and has a lab dedicated to improving the final stage of deliveries, from local warehouses to buyers.

Larry Page and Sergey Brin

Google is the dominant player in Internet search and one of the most important technology companies. But it still faces major challenges.

33

Google’s Amit Singhal, senior vice president of search and Google Fellow, was asked in a talk at South By Southwest what Google’s biggest challenges are to solving its mission.Those four technical challenges are: the knowledge graph, speech recognition, natural language understanding and (understanding) conversation, he said. These four areas are technical problems that, despite Google’s improvements, are still “not solved,” Singha said.

The knowledge graph is about “understanding the world as you and I do”–in other words, the connections between things and ideas and how they relate to each other, which underlies Google’s core search focus. Speech recognition is translating the human voice into text, which is key to things like searching by voice. Natural language is understanding the nuances of language, which allows the conversion of voice transcription into meaningful information. Conversation is related to natural language.

Still, Singha says search has progressed much faster than he thought it would have when he was in graduate school studying the problem 20 years ago. “When I was starting out as a graduate student in search we would struggle to figure out ‘apple’ is a company and also ‘apple’ is a fruit,” Singhal saidin a talk about the future of Google search and mobile with Guy Kawasaki.

Today however, you can type “church address” in Google and the search engine will know you’re looking for a physical map address. But if you type “Feedburner address” Google will know you’re looking for a URL.

Singhal, who joined Google 12 years ago, emphasized a vision of search based on the sci-fi vision in Star Trek. In the show, Captain Kirk would ask the computer any question and the computer would spit out an answer. Singhal pointed to Google Now, which is designed to send users information before they even search for

34

it, such as flight delay information, or when someone should leave for a meeting, taking into account traffic.

“It should tell you things when you don’t ask it. If your flight is delayed you shouldn’t have to ask what’s the status. It should just know. Or you have a meeting an hour away and there’s bad traffic. Google should tell you, you’d better leave now. Our vision of Google is things you need to know just come to you… Our dream is for search to become the Star Trek computer. That’s what we’re building today.”

Venture, Product & Services

Larry Page and Sergey Brin (Google)

Google Inc. (Google), incorporated on October 22, 2002, is a global technology company. The Company’s business is primarily focused around key areas, such as

35

search, advertising, operating systems and platforms, enterprise and hardware products. The Company generates revenue primarily by delivering online advertising. The Company also generates revenues from Motorola by selling hardware products. The Company provides its products and services in more than 100 languages and in more than 50 countries, regions, and territories. Effective September 16, 2013, Google Inc acquired Bump Technologies Inc. Effective October 22, 2013, Google Inc acquired FlexyCore, a developer of software. Effective December 6, 2013, Google Inc acquired the entire share capital of SCHAFT Inc. Effective December 14, 2013, Google Inc acquired Boston Dynamics Inc. Effective January 15, 2014, Google Inc acquired Impermium Corp, a developer of SaaS application software. Effective February 7, 2014, Google Inc acquired the remaining 88% interest in Nest Labs Inc. Effective February 21, 2014, Google Inc acquired Spider.io, a provider of online fraud detection services. Effective March 12, 2014, Google Inc acquired Green Throttle Games. In April 2014, Google Inc acquired Titan Aerospace, a Moriarty-based manufacturer of solar-powered drones. Effective May 5, 2014, the Company acquired Rangespan, a provider of information technology services. Effective May 6, 2014, the Company acquired Adometry Inc. Effective May 7, 2014, the Company acquired Appetas Inc, a provider of Website development and design services, and Stackdriver Inc, a Boston-based provider of prepackaged applications software in cloud platform. Effective May 16, 2014, Google Inc acquired Quest Visual Inc. Effective May 20, 2014, Google Inc acquired Enterproid Inc, doing business as Divide. In June 2014, Google Inc acquired mDialog Corp. Effective June 25, 2014, Google Inc acquired Appurify Inc, a San Francisco-based developer of mobile bugging application software. Effective 23, July, 2014, Google Inc acquired drawElements Oy, a Helsinki-based developer of 3D graphics software. Effective August 6, 2014, Google Inc acquired Tinker Square Inc. Effective August 22, 2014, Google Inc acquired Gecko Design Inc. Effective August 26, 2014, Google Inc acquired Zync Inc. Effective September 10, 2014, Google Inc acquired Lynx Design Inc. Effective September 11, 2014, Google Inc acquired Input Factory Inc.

The Company’s enterprise products provide Google technology for business settings. Through Google Apps, which includes Gmail, Google Docs, Google Calendar, and Google Sites, among other features, it provides hosted, Web-based applications that people can use on any device with a browser and an Internet connection. In addition, the Company provides its search technology for use within enterprises through the Google Search Appliance (real-time search of

36

business applications, intranet applications, and public websites), on their public-facing sites with Google Site Search (custom search engine), and Google Commerce Search (for online retail enterprises). The Company also provide versions of its Google Maps Application Programming Interface (API) for businesses (including interactive Google Maps for public and internal Websites), as well as Google Earth Enterprise (a behind-the-company-firewall software solution for imagery and data visualization). Its enterprise solutions have been adopted by a variety of businesses, governments, schools, and non-profit organizations.MotorolaThe Company’s Motorola business consists of two segments: Mobile segment and Home segment. The Mobile segment is focused on mobile wireless devices and related products and services. The Home segment is focused on technologies and devices that provide video entertainment services to consumers by enabling subscribers to access a variety of interactive digital television services.The Company competes with Facebook, Inc., Twitter Inc., Yahoo! Inc., Microsoft Corporation, eBay Inc., and Amazon.com, Inc.

Sachin Bansal and Binny Bansal (Flipkart)

Flipkart went live in 2007 with the objective of making books easily available to anyone who had internet access. Today, we're present across various categories including movies, music, games, mobiles, cameras, computers, healthcare and

37

personal products, home appliances and electronics, stationery, perfumes, toys, apparels, shoes – and still counting!

Be it our path-breaking services like Cash on Delivery, a 30-day replacement policy, EMI options, free shipping - and of course the great prices that we offer, everything we do revolves around our obsession with providing our customers a memorable online shopping experience. Then there's our dedicated Flipkart delivery partners who work round the clock to personally make sure the packages reach on time.

So it's no surprise that we're a favourite online shopping destination.

Mark Zuckerberg (Facebook)

38

When it comes to social networking, it's wise to put your best face forward. Facebook, the social networking juggernaut, lets users share information, post photos and videos, play games, and otherwise connect with one another through online profiles. The site, which allows outside developers to build apps that integrate with Facebook, boasts more than a billion total users. The firm was launched in 2004 by Harvard student Mark Zuckerberg as an online version of the Harvard Facebook. (The name comes from books of freshmen's faces, majors, and hometowns that are distributed to students.) In 2012 Facebook began publicly trading after filing one of the largest IPOs in US history.

Rana Kapoor (Yes Bank Ltd)

39

YES Bank Limited provides commercial banking products and services. The company engages in the corporate and institutional banking, financial markets, investment banking, corporate finance, branch banking, business and transaction banking, and wealth management businesses. YES Bank provides financial and risk management solutions to corporates and groups, multinational companies, central and state governments, government bodies, and public sector enterprises; and knowledge-based advisory and financial.

Financial Performance Google

40

Google earnings showed hopeful signs this quarter, after the fundamentals were

negatively impacted in 2013 with the acquisition and merger of Motorola. GAAP

earnings per share were $8.22 and matched the prior year QE December 2011,

but were short of the QE March 2013 record of $8.75. However, Non-GAAP

earnings per share of $10.65 and cash flow per share of $13.94 were all-time

highs.

Google sees the world as a global cloud plus a multi-screen environment from the

user side. People now have a variety of devices to connect to the Internet and use

more than one device per day. These can be a smartphone, tablet, notebook,

desktop, etc. Google plans on being on your screen, your window to the Internet

and the global cloud, via their products, regardless of device. Google would also

like to build your device.

There is still some damage to repair in the earnings per share growth rate. The

revenue growth rate continues healthy, but needs an assist from gross margin for

the bottom line.

The reversal of the downtrend in gross margin (56.91%) is the most positive

metric for this quarter. Operating and net margins responded accordingly. Last

quarter, gross margin reached an abysmal and multi-year, if not all-time, low of

53.52%.

Revenues rose to an all-time high of $14.42 billion, powered by record regional

revenues across the board: the United States, the United Kingdom, and Rest of

the World. Operating income inched up to an all-time high of $3.39 billion. Net

income of $2.886 billion just missed the record high of $2.890 billion in the QE

March 2014.

41

"We ended 2013 with a strong quarter," said Larry Page, CEO of Google.

"Revenues were up 36% year on year, and 8% quarter on quarter. And we hit $50

billion in revenues for the first time last year – not a bad achievement in just a

decade and a half. In today's multi-screen world we face tremendous

opportunities as a technology company focused on user benefit. It's an incredibly

exciting time to be at Google."

Flipkart

42

Flipkart India Pvt. Ltd reported a loss of Rs 281.7 crore in the year ended March 2013, up from Rs 109.9 crore loss it reported in the previous year, despite a five fold increase in revenue to more than Rs 1,180 crore from Rs 204.8 crore it reported in the previous year, reports Mint.

The company’s expenses jumped more than five times to Rs.1,366 crore from Rs.265.6 crore last year and its cash balance dropped to Rs.166.2 crore on 31 March from Rs.236 crore a year ago.

The auditors however noted that the internal controls for purchasing of goods needs strengthening in proportion to the size of the company and nature of its business. “In our opinion, this is a continuing failure to correct a major weakness in the internal control system,” the auditor noted.

Earlier this year we had reported that WS Retail, Flipkart’s retail arm had reported a total income of Rs 480.65 crore for the financial year ended 31st March 2012 (FY12), up from around Rs 49 crore for the year ended 31st March 2011 (FY11). The company reported a profit for the year, of Rs 80.92 lakh up from Rs 65 lakh. It also issued 90,000 equity shares worth Rs 10 each during FY-13.

It needs to be noted that Flipkart India sold its technology platform and related intellectual properties to another entity called Flipkart Internet Pvt. Ltd for an “agreed consideration” effective on 31 December 2012. The value of the sale of business to Flipkart Internet was Rs.94.15 crore, according to the its filings.

In 2012, Flipkart raised $150 million from Naspers and Tiger Global. This year, the company raised $200 million from existing investors like Naspers, Accel Partners, Tiger Global, and ICONIQ Capital in July. It also raised an additional $160 million investment from new investors Dragoneer Investment Group, Morgan Stanley Investment Management, Sofina and Vulcan Capital and existing investor Tiger Global in October 2013. Till now, Flipkart has raised a total $541 million from five rounds.

Facebook

Second Quarter 2014 Operational Highlights

43

Daily active users (DAUs) were 829 million on average for June 2014, an increase of 19% year-over-year.

Mobile DAUs were 654 million on average for June 2014, an increase of 39% year-over-year.

Monthly active users (MAUs) were 1.32 billion as of June 30, 2014, an increase of 14% year-over-year.

Mobile MAUs were 1.07 billion as of June 30, 2014, an increase of 31% year-over-year.

Second Quarter 2014 Financial HighlightsRevenue - Revenue for the second quarter of 2014 totaled $2.91 billion, an increase of 61%, compared with $1.81 billion in the second quarter of 2013. Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have increased by 59%.

Revenue from advertising was $2.68 billion, a 67% increase from the same quarter last year. Excluding the impact of year-over-year changes in foreign exchange rates, revenue from advertising would have increased by 65%.

Mobile advertising revenue represented approximately 62% of advertising revenue for the second quarter of 2014, up from approximately 41% of advertising revenue in the second quarter of 2013.

Payments and other fees revenue was $234 million, a 9% increase from the same quarter last year.

Costs and expenses - GAAP costs and expenses for the second quarter of 2014 were $1.52 billion, an increase of 22% from the second quarter of 2013. Excluding share-based compensation and related payroll tax expenses, non-GAAP costs and expenses were $1.2 billion in the second quarter of 2014, up 18% compared to $1.02 billion for the second quarter of 2013.Income from operations - For the second quarter of 2014, GAAP income from operations was $1.39 billion, up 147% compared to $562 million in the second quarter of 2013. Excluding share-based compensation and related payroll tax expenses, non-GAAP income from operations for the second quarter of 2014 was $1.71 billion, up 116% compared to $794 million for the second quarter of 2013.Operating margin - GAAP operating margin was 48% for the second quarter of 2014, compared to 31% in the second quarter of 2013. Excluding share-based compensation and related payroll tax expenses, non-GAAP operating margin was 59% for the second quarter of 2014, compared to 44% for the second quarter of 2013.

44

Provision for income taxes - GAAP income tax expense for the second quarter of 2014 was $595 million, representing a 43% effective tax rate. Excluding share-based compensation and related payroll tax expenses, the non-GAAP effective tax rate would have been approximately 36%.Net income and EPS - For the second quarter of 2014, GAAP net income was $791 million, up 138% compared to $333 million for the second quarter of 2013. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP net income for the second quarter of 2014 was $1.09 billion, up 124% compared to $488 million for the second quarter of 2013. GAAP diluted EPS was $0.30 in the second quarter of 2014, up 131% compared to $0.13 in the second quarter of 2013. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP diluted EPS for the second quarter of 2014 was $0.42, up 121% compared to $0.19 in the second quarter of 2013.Capital expenditures - Capital expenditures for the second quarter of 2014 were $469 million.Cash and marketable securities - Cash and marketable securities were $13.96 billion at the end of the second quarter of 2014.Free cash flow - Free cash flow for the second quarter of 2014 was $872 million.

Conclusion

45

Successful entrepreneurs require an edge derived from some combination of a creative idea and a superior capacity for execution. The entrepreneur's creativity may involve an innovation product or a process that changes the existing order. Or entrepreneur may have a unique insight about the course or consequence of an external change. Entrepreneurship is the vehicle that drives creativity and innovation. Innovation creates new demand and entrepreneurship brings the innovation to the market. Innovation is the successful development of competitive edge and as such, is the key to entrepreneurship.

Creativity and Innovation are at the heart of the spirit of enterprise. It means striving to perform activities differently or to perform different activities to enable the entrepreneur deliver a unique mix of value. Thus the value of creativity and innovation is to provide a gateway for astute entrepreneurship-actively searching for opportunities to do new things, to do existing things in extraordinary ways. Creativity and Innovation therefore, trigger and propel first-rate entrepreneurship in steering organization activities in whatever new directions are dictated by market conditions and customer preferences, thereby delighting the customers to the benefit of the stakeholders. Innovation also means anticipating the needs of the market, offering additional quality or services, organization efficiently, mastering details, and keeping cost under control.

Bibliography

46

www. entrepreneur .com/tsu/index.html

yourstory.in/

www.youthkiawaaz.com/.../top-10- entrepreneurs -and-leaders ..

bx.businessweek.com/social-entrepreneurship/

www. muhammadyunus .org/

www.iseek.org/.../ green /.../what- green - entrepreneurship .

www.forbes.com/.../business-tips-from- college - dropouts -

47