When one of India's most celebrated bankers chairs a jury comprising the heads of India's largest passenger car maker, second-largest telecom company, a leading private equity firm, two marquee management and strategic consultancy organisations and one of India's top legal eagles, the quality of the judgement is predictable. The task of selecting the winners - in a year when slowdown was the main theme - was a tough one, but the seven-member jury for the Business Standard Awards for corporate excellence in 2014 made it look simple.
What perhaps made the job of selecting the outstanding individuals and institutions simpler was the tone set by the jury's chairman, K V Kamath, at the beginning of the one-and-a-half hours of intense discussions here last Thursday afternoon. The chairman of ICICI Bank and Infosys said: "The winners should represent the India of today and they should have a reasonably long track record so that their success endures." He was also in favour of retaining a high cut-off on financial numbers for getting into the shortlist of potential winners, even as the external environment was tough.
True to that spirit, the jury managed to crank up the strictness quotient a level higher and said while financial ratios were important for making the first cut, equal importance had to be given to individuals who built real institutions at a time when the challenges in the external environment were severe. Innovation and globalisation were considered the other factors that would go into the final selection.
Each jury member had thoroughly read the 260-page information docket, containing details of the candidates shortlisted by the Business Standard Research Bureau, which chose firms that posted top line and bottom line growth of over 15 and 10 per cent, respectively, in each of the three years from 2011-12 to 2013-14. Other financial criteria, including returns on net worth and capital employed, were also applied.
The dominance of information technology companies in the shortlist led to a lively discussion initiated by Maruti Suzuki Chairman R C Bhargava, who noted some of the manufacturing companies were doing great work but lost out on financial metrics. KKR India Chief Executive Sanjay Nayar agreed and said the relative lack of buoyancy in the manufacturing sector provided some food for thought for the policy-makers.
The other jury members were Vodafone India Managing Director & CEO Marten Pieters, McKinsey India MD and McKinsey Inc Director Noshir Kaka (who joined the meeting on video link from Munich), AZB Partners Managing Partner Zia Mody and EY India CEO & Country Managing Partner Rajiv Memani (who came straight from London to attend the meeting).
The stage was set for the jury meeting when Kamath began the process by asking members to shortlist two candidates from each category - each of whom were then subjected to intense scrutiny. The agenda was a formidable one: Selecting the CEO of the Year and Company of the Year, and achievers in other categories - Star Public-Sector Undertaking of the Year, Star Multinational Company of the Year and Star Small and Medium Enterprise of the Year.
To celebrate Business Standard's 40th year of thought leadership, two other awards were added this year - Best Entrepreneur of 40 years and Best Company of 40 years. This was also to recognise the institutions and individuals who started operating in the late 1970s and made a significant impact on the country's business landscape.
At the end, four of the seven awardees were from the information technology sector. But as Kamath and other jury members said, the success of these companies over several past years should not be held against them.
CEO of the Year
The company has been making several acquisitions to build capabilities across verticals, the most recent being its biggest so far - the acquisition of LightBridge Communication Corporation for $240 million in November this year. The company ended 2013-14 with year-on-year sales growth of 17.7 per cent (in US dollar terms), the highest in the industry.
Nayar said Gurnani's "fantastic customer-centricity" helped TechM mine existing client relationships which explained the company's superior growth rates and high return ratios. Gurnani, who has been with the company for many years now, played a pivotal role in the three-year transformational journey of Mahindra Satyam and the eventual merger between the two.
Company of the Year
Motherson Sumi leveraged its robust business in India to acquire two large loss-making European vendors in 2009 to become a global leader in vehicle interior systems. Already a Tier-I vendor to most of the India-based car makers, Motherson is now also a vendor to marquee global auto majors like BMW, Audi, Mercedes Benz, Volkswagen and Renault. In the past five years, the company's net sales and net profits have grown at compound annual rates of 63.6 per cent and 34.1 per cent, respectively. That makes it one of the fastest-growing manufacturing companies in India.
Star MNC of the Year
It is not Horlicks alone. Its toothpaste brand, Sensodyne, kept its lead, despite being costlier than rivals, with an overall market share of 2.5 per cent.
Star PSU of the Year
Despite volatile market conditions, PowerGrid was able to raise funds last year, without much concern or pressure on equity dilution, led by its balance sheet strength and project profiles. A large part of credit for this goes to its chairman & managing director, R N Nayak (59), who has been with the company for about 30 years now.
Star SME of the Year
In the year ended March 2014, the company's operating revenue grew 14 per cent, translating into strong profitability, as benefits of a weakened rupee seeped in. With an employee strength of under 7,000 across its six domestic delivery centres, eClerx also has presence in global client service locations in eight top global cities, offering operational support, data management and analytics solutions.
Best Entrepreneur of 40 years
As one of the six co-founders of Infosys and the company's CEO for 21 years, Murthy helped spark the outsourcing revolution that transformed India into the world's back office. His importance to Infosys is evident from the fact that he had to come back from retirement in 2013 to reboot the company he had founded in 1981. But true to his principles of corporate governance, he stepped down as executive chairman a year later, after installing Vishal Sikka as CEO. To give space to a professional outsider, he has adopted a total hands-off approach.
Best Company of 40 Years
In the past nine years since its listing in 2004, TCS' revenue and net profit have grown at compound annual rates of 26.6 per cent and 28.7 per cent, respectively. During this period, its dividend outgo increased over 11 times, growing at a compound annual rate of 31 per cent, while its market value expanded at 22 per cent annually.