read to lead...2020/05/19 · staff to resume work from...

READ TO LEAD

Terms and conditions of ICICI Bank apply

PRESSTRUSTOF INDIANewDelhi, May 18

THE NATIONWIDE TALLY ofCovid-19casescrossedonelakhonMondaywithmore peopletesting positive for the deadlyvirus inMaharashtra,Gujarat,Tamil Nadu and other states,even as amuch-relaxed fourthphase of the lockdown beganwithrestartingofmarketcom-plexes, autos, taxis and inter-state buses in various parts ofthe country. The death tollcrossedthe3,000-marktoo.

With an aim to reboot eco-nomic activities, authoritiesacross the country orderedreopening of markets, intra-state transport services andevenofbarbershopsandsalonsin some states,barring in con-tainment zones. However,schools,colleges,theatres,mallsand religiousgatheringswouldremainshut,atleasttillMay31.

In its morning 8 AMupdate, the health ministryput the total number of con-firmed cases 96,169 and thedeath toll at 3,029.It also saidthat36,824peoplehavesofarrecovered from the infection.However,a PTI tally of figuresas of 9.40PMput thenumberofthosehavingtestedpositivefor the infection at 1,00,096,with a death toll of 3,078 andrecoveries at 38,596 acrossthe country.

TRACKING COVIDNO RELIEF

FE BUREAUMumbai, May 18

INDIA’S STOCK MARKETScapitulatedonMondaydespitestrong global cues reflectingIndia Inc’s deep disappoint-mentwith the`20-lakh-croreeconomic package rolled outbythegovernment.Theexten-sion of the lockdown acrossseveral states till May end,albeit with relaxations, alsodampenedthesentiment.

The Sensex lost 1,068.75points to close at 30,028.98,the lowest levels since earlyApril.The Bank Nifty crashed1,260.80 points on height-ened concerns about risingdefaultsasmoreunitsbecomeinsolventinaweakeningecon-omy; bank stocks lost any-wherebetween5and10%.

Corporate earnings for theMarchquarter,sofar,havebeenlacklustre despite temperedexpectations. There is appre-hension corporate India’s per-formance could deterioratesharplyin2020-21asdemandfor both goods and services

remainsmuted; so far, barelyfive of the18Niftystockshavebeatenanalystsexpectations.

Foreign portfolio investors(FPIs) continue to sell Indianequities and offloaded stocksworth $331.02 million on

Monday.They have remainedsellers of stocks since Marchthis year; in March they sold$8.4 billionwhile inApril theyweremarginalsellers.

ContinuedonPage2

FE BUREAUNewDelhi, May 18

MINISTER FOR MSMEs androad transport and highwaysNitinGadkari onMondaysaidtherecentstepsannouncedbythe government to boost liq-uidity and credit flowswouldalso bolster “the purchasingpower of the people viaemploymentcreationandhelpaccelerate the wheels of theeconomy”.Theminister’scom-ments came at a time whenthere is a widespread notion

that the economic stimuluspackage unveiled by the gov-ernment is skewed towardssupply-side steps,whilemea-

sures to augment people’sincomes via tax cuts or trans-fersofmoneywouldhavebeenmoreopportune.

Given theambitious targetto award national highwayprojectsworth `15 lakh croreover the next couple of years,the minister said renewedattemptswere beingmade toraise money from abroad toexecute themassive projects.“We have decided to tapmoreFDI (for highway construc-tion). Also, foreign pensionfundsandinsurancefundsarebeing approached,apart frommultilateral bodies like ADB,World Bank and others,” theministersaid.

Speaking at an e-Adda, ononline interaction hosted byThe Indian Express, Gadkarisaidthathehasrecentlyaskeda former senior LIC official todraw up a specific road mapon accessing foreign insur-ance funds.

“The NHAI is AAA-rated, itcollected`28,000crore as tollreceipts in FY20 and wouldlikely have annual toll rev-enues to the tune of `1 lakhcrore in fiveyears,”he said.

ContinuedonPage2

ROAD TO REVIVAL


THE CENTRE ON Mondayasked 50% of its junioremployees, below the level ofdeputy secretary, to joinworkin office, according to an offi-cialcommunique.Tillnow,only33%of such employeeswereasked to attend office due tothe lockdown.

Ministerofstateforperson-nel Jitendra Singh said themovewillhelptowardsnormalfunctioningof central govern-ment offices. “Allowing 50%staff to resume work fromoffice is amove towards nor-malfunctioningofcentralgov-ernment offices. The work inofficeswill gain efficiencyandexpediency,”SinghtoldPTI.

He said there will be stag-geredentryandexittimingsforcentralgovernmentemployeesjoiningoffice.“Socialdistancingnormswill be strictly followedbycentralgovernmentemploy-eesresumingworkfromoffice,”theministersaid.

Forregulatingattendanceofofficersandstaff,belowthelevelofdeputysecretary,allheadsofdepartmenthavebeenaskedbythe personnelministry to pre-parearostersoastoensurethat50%ofofficersandstaffattendofficeoneveryalternateday,thecommunique issued to all cen-tral government departmentsbytheministrysaid.

● GETTING ON TRACK

Centre asks50%of junioremployees toresumeworkfromoffice


TELECOM OPERATORBHARTI Airtel on Mondayposted a consolidated loss of`5,237 crore for the January-Marchquarterof the2019-20fiscal mainly on account ofprovisions forstatutorydues.

The companyhad posted aprofit of `107.2 crore in thesameperiodayearago.

Bharti Airtel registered aconsolidated revenue of`23,722.7 crore during thereportedquarter.

The companyhad posted arevenue of `20,602.2 crore inthe corresponding quarter of2018-19.

The telecom companyposted exceptional itemstotalling `7,004 crore duringthe quarter ended on March31, 2020, that comprises achargeonaccountof reassess-mentof regulatorycost.

For the year ended onMarch31,2020,thecompanypostedanet lossof`32,183.2crore and a revenue of`87,539 crore.

For 2018-19,Bharti Airtelhad reported a net profit of`409.5 crore and revenue of`80,780.2crore.

● JANUARY-MARCH

BhartiAirtelslips into red,logs `5,237-crloss on duesprovision

After Zomato, Swiggy to lay off1,100 employees to cut costs

Bank Nifty crashed1,260.80 points onheightenedconcerns aboutrising defaults

EXTRABORROWING LIMIT

PRASANTASAHUNewDelhi, May 18

ATLEASTTHREEOpposition-ruled state governments —Tamil Nadu,West Bengal andKerala—havecomeupagainstthe Centre’s decision to link75% of the extra borrowingspaceaccordedtothem,tohowtheyworkonandachievespec-ified reforms.

Inascathing lettertoPrimeMinisterNarendraModi,TamilNadu chief Edappadi KPalaniswami said the state isopposed to the Centre’smove,which, among other things,

asked for stopping free powersupply to farmers.Calling theconditions put forth by theCentre for the states to fullyuse thehigherborrowing limitas ‘needlessly onerous’,Palaniswami said, “While insomeof the fourmajorareasofreformrequiredbythegovern-ment of India to avail of theadditionalborrowing,thestategovernmenthasalreadyunder-taken the reforms withoutexpecting any financial assis-tance, there are some areas,most specifically in the area ofpower distribution reforms,whicharepoliticallysensitive.”

“Protest making of addi-tional loans conditional.Mostof these conditions can easilybe implemented through dia-logue.TheCentrehas setabadprecedent. In future, severeconditionsmaybeimposedoneven normal loans,” KeralafinanceministerThomasIsaactweeted.“This is crushing fed-eralistpolityof India insteadyand strategic manner wherethediktat of theCentrewill bethe order of the day and theelective representatives of thepeople in the states will haveno choices,”Telegraph quotedWest Bengal financeministerAmitMitra,as saying.

Union expenditure secre-taryTVSomanathandefendedtheconditions,citingconstitu-tionalprovisionsinthisregard.

ContinuedonPage2

'Onerous' reformtermsworry states

Liquidity boost to create jobs,pep up demand: Gadkari

Lockdown4.0 beginswith restarting ofmarket complexes,autos, taxis andinter-state buses

INTERNATIONAL, P8

COVID IMPACT

INTERNATIONAL, P8

SENSEX: 30,028.98 ▼ 1,068.75 NIFTY: 8,823.25 ▼ 313.60 NIKKEI 225: 20,133.73 ▲ 96.26 HANG SENG: 23,934.77 ▲ 137.30 `/$: 75.91 ▼ 0.34 `/€: 82.09 ▼ 0.35 BRENT: $34.49 ▲ $1.99 GOLD: `47,870 ▲ `489

AHMEDABAD, TUESDAY, MAY 19, 2020

US Fed’s Powellwarnsdownturn ‘may lastuntil late 2021’

WEWORK, UBER SETBACK

SoftBankVision Fund posts$17.7-billion loss,worstin its 39-year history

OPINION, P6

SONALVARMA&AURODEEPNANDI EDITORIAL

Package 2.0 aims formaximumbangwithminimumbuck

Lockdown4.0 apragmatic

turn for Covid-19 response,

leaves red-orange-green

zoning to states

VOLUME XIV-297, 14 PAGES, `6.00 PUBL I SHED FROM : AHMEDABAD, B ENGALURU , CHAND IGARH , CHENNA I , HYDERABAD, KOCH I , KOLKATA , LUCKNOW, MUMBA I , N EW DELH I , PUNE

FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM

READ TO LEAD

Nifty50

9,158.30Open

Intra-day,May 18

8,823.25

75.86

5.771

18,795.10

17,573.205.774

75.91

-296.49 1,746.81

1,764.03

-332.25

2,262.19

Close

Previous close:9,136.85

Points-313.60

`/$ 10-yr bond yield Bank Nifty

FPI flows ($ mn) Gold ($/Oz)

-3.43%

75.82

Open

April 3, 2020 May 15, 2020

May 6

3:30 am 5:13 pm

Close Open Close Open Close

Intra-dayIntra-day

Intra-day

Intra-day

Inverted scale

75.86

(%)

75.90

75.94

75.98

Previous close: 75.575 Previous close: 5.780 Previous close: 18,833.95

5.770

5.773

5.776

5.779

5.782

-500

0

500

1,000

1,500

2,000

2,500

'

17,200

17,700

18,200

18,700

19,200

1,740

1,745

1,750

1,755

1,760

1,765

1,770

Markets tank as India Incdisappointedwith booster

MODERNA SAID ON Mon-day its experimentalvaccineproduced antibodies thatcould “neutralise” coron-avirus in patients in a smallearly stage clinical trial,reportsReuters. ■Page8

Delhi shops toopenonodd-evenbasisDELHI CM Arvind Kejriwalannouncedopeningof shopsonanodd-evenbasisandrun-ning of buses with only 20passengers,but schools,met-ro,colleges,cinemas and sal-oonstostayshut.■Page2

China’s $2-bn fundfor virus-hit nationsPRESIDENTXI Jinpinganno-unced a $2-billion fund tohelpcountrieshitbyCovidashe firmlybackedWHO,amidthegrowingpressurefacedbyChina over the global spreadofthedeadlyvirus.■Page8


FOOD DELIVERY PLAYERSwiggyhas said itwill have to“partways”with1,100employ-eesgiventhecompulsiontocutcosts to “achieve profitability

with a smaller order volumethan hitherto planned”. Themovecomesontheheelsoflay-offs of an estimated 500employeesbyrivalZomato.Therestaurant and food deliveryspacehavebeenbadlyhitbythecountry-widelockdown.

Co-founder& chief execu-tive officer SriharshaMajetywrote in anote to the employ-ees that the core food deliverybusiness has been severelyimpacted and will stayimpactedovershort term.

ContinuedonPage2

EXPRESS NEWS SERVICEBengaluru, May 18

KARNATAKA ANNOUNCEDON Monday that it would lettransport buses plywithin thestate,as part of relaxations forLockdown 4.0, but restrictedthe entryof people from threebordering states — Kerala,Tamil Nadu, Maharashtra —and Gujarat to prevent thespreadofCovid-19.

“We have decided not toallow people from Gujarat,Maharashtra,KeralaandTamilNadu tillMay31,but in stages(staggered manner),” chiefminister BSYediyurappa toldreporters. State officials saidentry for“special cases” fromthe four states would beallowed“onrequest”.

ContinuedonPage13

96,169TOTALCASES

3,029DEATHSSOFAR 5,242NEWCASES

COVID-19 UPDATE

Migrantswait toboardbuses to reachGhaziabad railway station aspart of their journey totheir nativeplaces, at theRamlila ground inGhaziabadonMonday

Karnatakalockdown 4.0means curbs onthose comingfrom four states

India tally crosses 1,00,000

STICKY ISSUES

SURYASARATHI RAYNewDelhi, May 18

FINANCEMINISTERNIRMALASitharaman last weekannouncedaplantoauctionoffasmanyas500mineral blocksoveranunspecifiedperiod,butgiventhepaceatwhicheventheauctioned blocks turn opera-tional, the investment land-scape inthesectordoesn’t lookimprovingall toosoon.

Miningofnon-coalminer-

alshasbeenmademoreattrac-tivetoinvestorsinrecentyearswith several steps like cer-tainty of licence tenures andsingle licence across themin-ing value chain (from

prospecting to production),but an investor still needs tosecureasmanyas30approvalsto startmining.

ContinuedonPage2

BUY

`

Special Features

Acautious investmentstrategy for capitalprotection iswarranted inthe short term to tackletheCovid-19 shock.Investorsmust review theirportfolios regularly■Personal Finance, P9

Company is best placedacrossmetrics thoughcurrent cyclewill impactit; RoEs of10-11% forFY21/22F leave limitedroom for any re-rating;‘Neutral’maintained■ Investor, P9

How to forge a newpath toyour financial goals

Marginally positive quarterfor KotakMahindra Bank

QuickPicks

Lockdown: Govtwithdrawsfullwage payment order

THEHOMEministry haswithdrawnadirective thatcompanies, shops andother business unitsmustcontinue tomake full payment ofwages to theworkers during lockdown, reports fe Bureau in

NewDelhi.The latest set ofguidelines for lockdown4.0omitted the abovedirection contained in itsMarch 29orders.Asper theMarch29order, all employerswere requiredtopaywagesonduedatewithout anydeduction even ifthe establishment remainedclosedduring lockdown.

Diageo exploring optionsto delist United Spirits

DIAGEO,THEworld’s largest spirits maker, isexploring options to delist its Indian arm, UnitedSpirits, by buying outminority shareholders,CNBCTV-18 reported onMonday, reports

Reuters. Diageo currently owns an about 56% stake inUnited Spirits after slowly building it up over several years.The company has started talkswith investment bankers andconsultants on a delisting offer, the CNBCTV-18 report said,citing sources familiarwith thematter. PAGE 4

Coal-fired power PLF touchesall-time lowof 42% inApril

THEUTILISATION level of coal-based powerplants touched an all-time low inApril,with theiraverage plant load factor (PLF) standing at 41.9%,down from63.1% inApril 2019, amid falling

electricity usage during the lockdown, reports feBureau inNewDelhi. PLFofprivate thermal power plants fell to 44%lastmonth, nearly 14 percentage points lower thanApril2019.The same for plants run by central government firmsfell 22.6 percentage points y-o-y to 49.9% inApril. PAGE 2

NitinGadkari, Unionminister

"Ourgovernmentis stronglyopposed tothe idea of

removing the free powersupply to farmers."—EDAPPADI PALANISWAMI,TN CHIEFMINISTERWRITESTOPM NARENDRAMODI

"In futuresevereconditionsmay beimposed on

even normal loans."—THOMAS ISAAC,KERALAFINANCE MINISTER

Only 12 of 95 blocksawarded since the2015MMDRActchange have startedproduction yet

Modernavaccineshows promise

Apart fromthestickyregulatory issuesand tediousdelays ingrantofenvironmental

and forestclearances, taxesandleviesalsocontinuetobeaheavyburdenfor investors

Indian levies,onanaverage,arearound40-45% (withoutincludingthecorporate

tax)comparedto5-14%globally

Miningofnon-coalmineralshasbeenmademore

attractiveto investors inrecentyearswithseveralsteps likecertaintyof licencetenuresandsingle licenceacross theminingvaluechain,butan investorstillneedstosecureasmanyas

30approvals tostartmining

Delay inmining approvalsdampening investor spirit

Ahmedabad


REVISING ITS STRATEGY forCovid-19 testing, the IndianCouncil of Medical Research(ICMR) said on Monday thatreturnees and migrants whoshowsymptomsforinfluenza-like illness will be tested forcoronavirus infectionwithinseven days of ailment andstressed that no emergencyclinical procedure, includingdeliveries, should be delayedfor lackof testing.

The ICMR, in its revisedstrategy, also added that allhospitalised patients whodevelop symptoms forinfluenza-like illness (ILI) andfrontlineworkers involved incontainment andmitigationofCovid-19having such signswill also be tested for coron-avirus infection through theRT-PCRtest.

Besides, asymptomaticdirect and high-risk contactsof a confirmed case are to betested once between day fiveand day 10 of coming in con-tact,thenewdocumentstated.Asymptomatic contacts of aconfirmed case were beingtested once between day fiveandday14.

An official said, "The apexbodyforhealthresearchrevisedits strategyinviewofaspurt in

coronavirus cases in the coun-try. The new strategy aims tocontain the spreadof infectionmoreeffectivelyandtoprovidereliablediagnosistoallindivid-ualsmeeting the inclusion cri-teriaofCovid-19testing.”

“ILI case is defined as onewith acute respiratory infec-tion with fever more than orequalto38degreesCelsiusandcough while a SARI case isdefined as onewith acute res-piratory infection with fevermore than or equal to 38degreesCelsiusandcoughandrequiring hospitalisation,”theICMRstated.

Till now, people with ILIsymptoms living withinhotspots or containmentzones,patients of severe acuterespiratory infection (SARI)and symptomatic healthcareworkerswere being tested forcoronavirus infection as pertheguidelines.

All asymptomatic individ-ualswith a history of interna-tional travel inthe last14daysand all symptomatic contactsof laboratory-confirmed casewerealsobeing tested.

EconomyTUESDAY, MAY 19, 2020

FINANCIALEXPRESS2

● LOCKDOWN IMPACT


THE UTILISATION LEVEL ofcoal-based power plantstouchedanall-timelowinApril,with their average plant loadfactor(PLF)standingat41.9%,down from 63.1% in April2019, amid falling electricityusageduringthelockdown.

PLF of private thermalpower plants fell to 44% lastmonth,nearly 14 percentagepoints lower thanApril 2019.Thesameforplantsrunbycen-tralgovernmentfirmsfell22.6percentage points year-on-year (y-o-y) to 49.9% inApril.Average thermalPLFforNTPCplants was 54.9% in April,sharplydeclining from75.9%recorded in the same monthlastyear.

Among private powerplants, the average PLF ofAdani Powerwith 9,240MWgeneration capacity droppedto51.6%from84.7% inAprillastyear.TheutilisationlevelofTata Power’s 4,000 MWimported coal-based powerplant inMundrafell to61.4%,down nearly 20 percentagepointsY-o-Y.The PLFof Jindal

Power’s 3,400 MW Tamnarunitfell to22.6%from35.2%in the same period last year.GMREnergy’s1,870MWther-malcapacityrecordedanaver-age PLF of 51.2%,down from83% in the year-ago period.Essar Power’s 1,200 MWMahan plant's PLFmore thanhalvedY-o-Yto28.2%inApril.

Conventionalpowergener-

atingcompanies areundergo-ingadditionalpressureaspan-India electricity demand inApril fell 22.6%year-on-yearto 85.2 billion units owing tomuted industrial and com-mercial activities. This is thelowest growth in electricitydemand in the country in anymonth in recentyears.

Fromavailabledata,thelow-est annual average thermalPLFwasrecordedat52.4%inFY86.CareRatingsexpects“decline inplant load factor of thermalpowerplantstobelow53%dur-ingFY21onaccountofsubdueddemand from industrial andcommercialsegmentsandgrad-ual ramp-upineconomicactiv-itypostCovid-19lockdown”.PLFof coal-based power plantsalready fell to 56.1% forFY20comparedto60.3%forFY19.

ICMR revises Covidtesting strategy

From the Front Page

'Cement dealersstaring at bigdemand shrink'

CEMENTDEALERSACROSSthecountryexpectsluggishsales,elongatedcreditperiodtoretailers,andhigherworkingcapitalneedsinthewakeoftheCovid-19pandemicthisfinancialyear,revealedaCrisilResearchsurvey.Awhopping93%oftherespondentssaidtheyexpectedvolumestoshrink10-30%inFY2021inthebasecasescenario,i.e.lockdowneasinginMay.

NHMfor30%taxonselect tobaccoANON-GOVERNMENTALORGANISATIONhasclaimedthata30%taxonnon-virginia tobaccocanfetch`30,000-crorerevenueand it canbeusedto fight thepandemic.TheNationalHealthForum(NHM),whichworks in thefieldof tobaccocontrol,recentlywrotea lettertothegovtandsought toregulate saleof suchtobacco.

Pollonunpaiddues toMSMEsACIIpoll showeddelayedpaymentsof`1,819croretoabout450of itsMSMEmembercompanies,the industrybodysaidonMonday.

Quick

View

WWW.FINANCIALEXPRESS.COM

PLFof coal-firedpowerunitsat all-time lowof 42% inApr Returneeswith

influenza-likeillness symptomswill be testedwithin 7 days

Markets tank asIndia Incdisappointedwith boosterINMAY,so far, theyhave beenbuyersbutprimarilybecauseofa large block deal in shares ofHindustan Unilever. Foreigninvestors have also sold $2bil-lionworth of bonds inMay sofar,followingsalesof$10.1bil-lionbetweenJanuaryandApril.The sales byFPIs of bonds andstockshavepressuredtherupeewhich depreciated to 75.9150onMonday, losing0.4%to thedollar,themost intwoweeks.

Investors have been con-cernedwithexpertsexpectingadeeper recession in the Indianeconomy.Goldman Sachs saidonMonday India’s GDPwouldcontract45%intheJunequar-ter. Economists have pointedout the fiscal impulse fromthepackage is relatively small ataround 0.8%ofGDPand thatthe measures largely addressstructural and supply-sideissues.Industryhasbeenaskingfor measures that can boostdemandmeaningfully.Thepro-longed slowdown also damp-enedthesentimentasitimpliesmany big consumer catch-mentswouldremainclosed.

The stockmarkets sawthinvolumes in the F&O segmenton the NSE onMondaywith aturnover worth `9.03 lakhcrore against the six-monthaverage of `14.21 lakh crore.The cashmarket sawvolumesworth `52,063.71 croreagainst the six-month averageof`40,898crore.

Delay inminingapprovalsdampeninginvestor spiritWORSE,THEmost important

environmental and forestclearances take 270 days and570 days, respectively, on anaverage.Nowonder since theamendment to theMines andMinerals Development andRegulation (MMDR) Act in2015 to ease investment pro-cedures, just 12 newminingblocks of non-coal mineralssuch as iron ore, limestone,bauxite have got opera-tionalised.The lownumberofnew operational leases isdespite the fact that 95 suchassets have been auctionedsincethe2015changes,whichwere intendedtoimpartmoretransparencyandefficiencytothe process of regulation andawardof leases.

TheMineralLaws(Amend-ment) Act, 2020, passed onMarch 12, allowed the newowners of the merchantmines, where lease periodexpired inMarch 2020 (auc-tioning was allowed evenbefore the expiry of the leaseperiod), to carry on miningactivity for a period of twoyears fromthedateofgrantofnew lease,without acquiringfresh environment and forestclearances.The lease holderscould also apply for freshlicence beyond the period oftwoyears.The purpose of thisleniencywasobviouslytofast-track investments and boostproduction.

Of the95blocksauctionedoff since the 2015 amend-ment to the MMDR Act, 19belonged to this category;sources said after makingrequired payments, thesemineswould startproductionimmediately.

Apartfromthestickyregu-latory issues and the tediousdelaysassociatedwithgrantofenvironmental and forestclearances, the enormity oftaxes and levies also continueto be an irritant for investorsin non-coal mining, where

India’s performance is farbelowpotential,makingitvul-nerable to huge import bills.Indian levies, on average, arearound 40-45% (withoutincluding the corporate tax)compared to5-14%globally.

“It practically takes two-three years to get all theapprovals. We would havebeen happier had the govern-ment allowed de-factoapprovals of these clearancesandallowedustostartminingimmediately after grantingleases tous,”saidaKarnataka-basedminer, on condition ofanonymity.

Investors in the miningsector have also beenthwarted by the end-userestrictions.Theconditionforat least three bidders alsohampers the leasing outprocess, even in cases whereinvestorinterestexists.In Jan-uary this year, the Centreissued an Ordinance to makeavailable dozens of captivecoal mines,without any end-use restrictions. So domesticand foreign steel companies,aluminiumorcopperproduc-ers and also local power com-panies can now take part intheauctionstobeheldtoreal-locate the captive blocks can-celled by the Supreme Courtin 2014.So far,only 90 of the204 blocks cancelled by theapex court have been reallo-cated, including 60 assignedtoPSUsonanominationbasisand29auctionedoff,and just29of themare operational.

In the past, VedantaResources chief Anil Agarwalhaspointedout that just10%of the country’s area withmining potential has beenexplored compared to95%inthe case ofAustralia.Agarwal,infact,isoftheviewthatasen-sible mining policy can cutminerals imports by half andcreate 20 million jobs in thebargain.

Extra borrowinglimit: ‘Onerous’reform termsworry states“IN ORDER to borrow, statesneed the Centre's nod underArticle293,”SomanathantoldCNBCTV18.

Union finance ministerNirmala Sitharaman on Sun-day raised the net borrowinglimit for state governmentsfrom3%ofgrossstatedomes-tic product (GSDP) to 5% tomake available an additional`4.28 lakh crore to all thestates combined. While 0.5percentage point of the extraborrowing window will beavailable toall statesuncondi-tionally, 1 pps will be madeavailableinfourequaltrancheswith each to clearly“specified,measurable and feasiblereform actions”. The balance0.5ppscanbeaccessedifmile-stones are ‘completelyachieved’ in at least three outof four reform areas. Thereform linkagewill be in fourareas – universalisation of‘OneNationOneRationCard’,ease of doing business,powerdistribution and augmenta-tion of urban local body rev-enues.

The raising of the borrow-ing limit would mean thestates could borrow an addi-tional `4.28 lakh crore fromthemarket on a net basis if allthe conditions are adhered to.States have been demandingthe hike in borrowing limitgiventhatthererevenueshavebeen squeezed and the Covid-19pandemichasdramaticallyincreased their short-termexpenditureonhealthcareandwelfare schemes.

The Finance Commissionhadalreadyrecommendedtheimplementationofdirectcashtransfers by states to provide

subsidy to eligible power con-sumers. The release of the`90,000-crore loan throughPFC-REC to discomswill alsobe contingent on the respec-tive state government under-takingtoputinplaceacrediblemechanismtoreleasethesub-sidies – meant for the con-sumersbutroutedthroughthediscoms– inadvance.

Aggressively pushing areformagendaonwhichacon-sensusisyettobedevelopedata time when states haveapproached the Centre foradditional borrowing out ofsheer desperation, is not inkeepingwith the spirit of co-operative federalism,Palaniswami said.“Ideally, theproposed reforms ought tohave been discussed in detailwith the states, a consensusdeveloped depending on thespecific conditions in eachstateandthereformslinkedtospecial central Covid grants,and not to additional borrow-ing by the state. Linking thecentral government's powerunder Article 293(3) of theConstitution to permit addi-tional borrowing by the statesto conditionalities is unprece-dented,”headded.

However, BJP-ruled statesand some non-BJP states likeOdisha (ruledbytheBJD)werenot so critical of the Centre’smove to put conditions.Bihar(BJPispartofthestategovern-ment) deputy chief ministerSushilKumarModiinfactwel-comed the higher borrowinglimit,whichcouldgiveanaddi-tional `12,922-crore debtwindowforthestate.

Officials from over half adozen states told FE that theirstates’ own tax revenues inAprilwere less thanafourthofthe usual (estimated) level,withsomeputtingthefigureateven10%.Thishadpromptedseveral statechiefministers todemandthat theFRBM-man-

dated fiscal deficit ceiling beraisedfrom3%ofGSDPto5%forFY21toenablethemtobor-rowmore funds.

After Zomato,Swiggy to lay off1,100 employeesto cut costs“WHILEWEareveryfortunateto have raised capital justbefore Covid hit and have suf-ficient runway today, it isincredibly important to pre-pare forworse scenarios in themacroenvironmentandmakesurewe are protected,”Majetywrote. He added the need ofthe hour is to build a much“leaner organisation andreducecosts”tobeabletowith-standanyfurtherriskfromtheuncertainty.

Swiggy, whose losses bal-looned toover`2,000crore inthe year toMarch 2019 from`385 crore in FY18,will alsoshut or scale down adjacentbusinesses like the cloudkitchenvertical.

With relief from the gov-ernment not yet forthcomingand with revenues for bothrestaurateursanddeliveryser-vices having collapsed, layoffsare increasing.

Deepinder Goyal, founder& CEO, Zomato, had said lastweekheexpectsthenumberofrestaurants to shrink by 25-40% over the next 6-12months. “We need to makesure thatwepreserve asmuchcashaspossibletoweatherthestorm if the business environ-ment getsworse,or continuesto be the same for the rest ofthe year or longer,”Goyal hadobserved.

Analysts at Crisil Researchestimate that online ordersfrom restaurants have shrunkby50-70%sincethelockdownbegan towards the end ofMarch. Consequently, many

eateries have been forced toshut down operations. TheFederation of Hotel & Restau-rant Associations of India(FHRAI) believes about 70-80%ofthe industrymayneedto discontinue operations.Although restaurant kitchensare permitted to operate forhome delivery, very few arerunning.Operational restric-tions in various cities and ashift in consumer preferencetohome-cookedfoodhavealsohurt thebusiness.

Liquidity boostto create jobs,pep up demand,says GadkariSTATINGTHAT infrastructureworks halted due to the lock-down needed to be com-mencedimmediately,themin-istersaid:“Weneedmaximumpublicprivate investmentandforeign investment in infra-structure—roads,railway,avi-ation and even power sector.There are the big projects,weneed to finance them.And byincreasing liquidity into themarket, we will create moreemployment potential”. “Myview is that when you pumpmoney into the economy, it isgoing to create demand. If 45lakhMSMEswillgetadditional20%credit(Rs3lakhcrorecol-lateral-free credit, jobs areindeedgoing tobecreated.”

Theministeraddedthatthefacilityoffered inthestimuluspackage for stressed MSMEaccountswas going to triggerrestructuring of assets.“Alreadywe have restructuredsix lakh MSMEs till March2020. We have decided toextend the date to December31.So,bythiswayourexpecta-tion is that 25 lakh MSMEaccountswillberestructured.”

Theministerreiteratedthatone of the problems faced by

MSMEswasthat theywerenotgettingtheirpayments intime-notjustfromtheCentralgov-ernment and ministries orPSEs,but fromstates and theiragencies, departments andfrom the private sector also.“Now,wehavetakenadecisionthat their payments (from theCentral government and itsagencies) would be madewithin45days.”

As part of the economicstimulus package,the govern-mentsaidrecentlyitwouldofferfull guarantee to banks to pro-videRs3lakhcroreasautomaticcollateral-free loans tomicro,small andmediumenterprises(MSMEs) whose accounts arestillstandard.Theideaistobringcash-starved small businessesback fromthebrinkof collapseinthewakeoftheCovid-19out-break.The government hopesthat as many as 45 lakh unitscould resumebusiness activityand safeguard jobs, thanks tothesuccour.

Additionally,theCentrewillalso facilitate an equity infu-sion of Rs 50,000 crore intothesebusinessesthatareviableand need some handholding,by leveraging a fund of fundswith a corpus of Rs 10,000crore. Similarly, the govern-ment will provide a separatescheme for stressed MSMEs,which will benefit 2 lakh ofthem. Itwill provide Rs 4,000crore as its share to set up acredit guarantee trust,whichwill then give its guarantee tothebanks.Atotalsubordinateddebt of Rs 20,000 could beextend under this to suchstressedbusinesses.

While thesemeasureswillhelp ease the liquiditywoes ofMSMEs,someindustryexecu-tivessaytheabsenceofanyfis-cal support to tide over theimmediate,nagging issues ofpaymentofwagesandintereston existing loans comes as adisappointment.

❝ ❝

AMPHANSN Pradhan, NDRF chief

Amphan is nowa 'super cyclone' and it is aserious issue.The only other cyclone thatwasvery deadlywas inOdisha in 1999.When itmakes landfall onMay 20morning or noon, itwill be an extremely severe cyclonic storm.

No ‘blunt’spendingcuts plannedFE BUREAUNewDelhi, May 18

DESPITE CENTRE'S REV-ENUES substantiallyfalling inApril,“there is no intention ofanybluntcutsinexpenditure,”expenditure secretary TVSomanathan said onMonday.“Wewill lookforsavingswher-ever possible,” SomanathantoldCNBCTV18.

Withrevenueshithardandexpenditure commitments tomeet, the Centre increased itsFY21 borrowing limit by`4.2 lakhcrore.

Spendingcurbs imposedbythe Centre on all governmentdepartmentswill likely reducethe budgetary expenditure inApril-Juneby`1.4lakhcroreor4.6%of the annual budget forFY21.TheCentrewillprioritiseexpenditurethisfiscalby keep-ing funding unaffected forflagship central schemes,SomanathanhadtoldFEearlier.

Bihar claims to have spent`5,000 crore to fight CovidSUMITJHANewDelhi, May 18

WITH THE MIGRANT labourreturninghome,Biharhasesti-mated that reliefmeasures sofar in the wake of Covid-19standat aminimumof`5,000crore,whichincludesdirectcashtransfers, transportation costand expenditure involved inkeeping returnees in isolationwards, deputy chief ministerSushilKumarModisaid.

Alargepartofthecostiscur-rently being borne by the CMrelieffundandthestate’sdisas-ter relief fund, but Modi saidBiharmayneed todip into reg-ular funds depending on theseverityofthesituationincom-ingdays.

The state has transferred`1,000 to each of 1.6 croreration card holders and thesameamount to about20 lakhmigrants currently residing inotherstates.The statehasbeenusing a mobile applicationdeveloped for the purpose ofidentifying genuine migrant

labourswhoareinotherstates.“The healthcare-related

costs themselves aren’t veryhighasexistinghospitals'infra-structurewhich includes doc-tors, paramedics and otherhealthcare professionals isalreadybeingmaintainedbythestate exchequer.Similarly, thecost of PPE kits and infraredthermometers aren’t substan-tiallyhigh,whilewehave beensaved fromthe requirement ofmore expensive ventilators inlargenumbers,”Modisaid.

However,thecostoferectingisolationwardswithtoiletsandproviding electricity to runthoseissubstantial.Besides,themigrant labour in isolationwardswouldhavetobefedforatleast14days.

“During their stay in isola-tionwards,residents are beingprovidedwithabasickit—asetof 21 items including clothes,utensils,combs anddental kitsamongothers—costing aboutabout`1,000perhead.Theyareallowed to take these itemswhen leaving these centers,”

Modi said.He added that so farabout 2 lakhpeople have beenadmittedtoisolationwardsandthe number is estimated totouch up to 5 lakh in next fewweeks.

Modi said the state-runBihar Foundation in variousstates has beenproviding foodtonearlya lakhmigrant labouron a daily basiswhile another20,000 foodpackets are beingdistributed. Additionally, thestate is bearing the transporta-tion cost of those arriving viatrains,while nearly700 buseshavebeenpressedintoservicetoferrypeople to respectiveblockheadquarters.Thestatehasalsobrought backhundreds of stu-dents studying in Kota,Rajasthan,and is running twospecialtrainswithinthestate.

“Thosewhoare arrivingviatrainsarehandedatleastRs500immediately. So the costincludesthecashplustheticketfare,”Modi said. Further, pay-ments of old-agepensionhavebeen front-loaded for theMarch-Mayperiod.

Shops inDelhimkts toopenonodd-evenbasisPRESSTRUSTOF INDIANewDelhi, May 18

DELHI CHIEF MINISTERArvind Kejriwal on Mondayannounced opening of shopsin markets on an odd-evenbasis and running of buseswith20passengers in the city,but said Metro services,schools,colleges,barber shopsand salonswill remain closedtillMay31.

“Wehavetograduallymovetowardsopeningtheeconomy.We used the lockdown periodtomake preparations to dealwith COVID-19.The penancedone by Delhiites in the lastoneandahalfmonthswillnotgowaste,”he said in an onlinemediabriefing.

“Coronaviruswill remain,but lifewill also have to go on.We cannot have a lockdownpermanently,”he said, addingthat we have to live withCovid-19.

The chief minister said allkinds of shops would beallowedtoopeninthenationalcapital and restaurants canopen for home-delivery and

takeawaysbutdiningfacilitieswillnotbepermitted.

Barber shops, salons andspas will, however, remainclosed tillMay31,headded.

While hotels will remainclosed, all liquor shops in thecity will be allowed to open,except for those in contain-ment zones,malls and shop-pingcomplexes,Kejriwal said.

“Shopsinmarketswillopenonodd-evenbasis.Standaloneshops, neighbourhood shopsand shops in residential com-plexwillremainopen,”hesaid.“If social distancing is notmaintained by a shopkeeper,hisorhershopwillbeclosedbytheauthorities.”

Kejriwal said buses andcabswould runwithrestrictions

Highwaydelays: Gadkariwarns indecisive officialsNAMITATEWARINewDelhi, May 18

SENDING OUTA strongmes-sage, Union minister NitinGadkari has said the govern-mentwill consider removal ordemotion of officials whoseindecisiveness is obstructinghighwayworks as many suchprojects have also beenimpactedbythe lockdown.

“Enough of warning hasbeengiventoofficialssittingonfilesandnottakingdecisions.Alarge number of our highwayprojects are suffering due tothis.Itistimethatsuchofficialswho despite being promotedand empowered to take deci-sions be demoted or removedand give chance to thosewhowant to perform,"Gadkari saidinaninterview. PTI

Ahmedabad

INDIA ON MONDAY joinednearly120countriesatacrucialconferenceof theWorldHealthOrganisation inpushing foranimpartial and comprehensiveevaluation of the global re-sponse into the coron-avirus crisis aswell as toexaminetheoriginofthedeadlyinfection.

Thetwo-day73rdses-sion of theWorldHealthAssembly (WHA) of theWHO began in Genevaamid growing calls in-cluding byUS PresidentDonaldTrumptoinvesti-gate howthevirus origi-nated in China’sWuhancity and subsequent ac-tionbyBeijing.

Another flash pointbetween China and theUS has been over theTrumpadministration’spush for inclusionofTai-wan in theWHO. Chinahas been strongly op-posed to the move as itconsiders Taiwan to bepartof itsterritory.

TheWHAis expectedto delve into pooling inadditional resources todeal with the pandemicthathaskilledover310,-000people and infectednearly4.7million.Adraftresolutionpushedbythe27-nation EU and sup-portedbyalargenumberof countries fordelibera-tions at theWHA calledfora step-wiseprocessofimpartial, independentandcomprehensiveeval-uationoftheWHO-coor-dinated international re-sponsetoCovid-19.—PTI

ECONOMY 3FINANCIALEXPRESS

WWW.FINANCIALEXPRESS.COM TUESDAY, MAY 19, 2020

NEOGEN CHEMICALS LIMITEDCIN: L24200MH1989PLC050919Regd. Ofice: Office No. 1002, 10th Floor,Dev Corpora Bldg., Opp. Cadbury Co,Pokhran Road No.2, Khopat, Thane – 400601Tel No: +91 22 2549 7300 Fax: +91 22 2549 7399Email: [email protected]: www.neogenchem.com

NOTICE OF BOARD MEETINGNotice is hereby given pursuant to Regulation 29, 30 and 47 of SEBI (ListingObligations and Disclosure Requirements) Regulations, 2015, that a meetingof the Board of Directors of the Company is scheduled to be held on Saturday,May 23, 2020, inter - alia, to consider, approve and take on record the AuditedFinancial Results (Standalone and Consolidated) of the Company for the quarter andfinancial year ended on March 31, 2020 and to consider recommendation of a finaldividend (if any) for the financial year ended on March 31, 2020.

Further, pursuant to Code of Conduct of the Company under SEBI (Prohibition ofInsider Trading) Regulation, 2015, the Trading Window for dealing in the securities ofthe Company was closed for all the Directors and connected persons covered underthe code from Wednesday, April 1, 2020 and the closure period will end 48 hours afterthe declaration of the Audited Financial Results of the Company for the quarter andfinancial year ended March 31, 2020.

The information contained in this Notice is available on the Company’s websitei.e. www.neogenchem.com and also on the website of the Stock Exchanges, whereshares of the Company are listed i.e. www.bseindia.com and www.nseindia.com

For Neogen Chemicals LimitedSd/-

Date : May 18, 2020 Unnati KananiPlace : Thane Company Secretary & Compliance Oficer

Membership No. A35131

Whilst care is taken prior toacceptance of advertising copy,it is not possible to verify itscontents. The Indian Express (P.)Limited cannot be heldresponsible for such contents,nor for any loss or damageincurred as a result oftransactions with companies,associations or individualsadvertising in its newspapers orPublications. We thereforerecommend that readers makenecessary inquiries beforesending any monies or enteringinto any agreements withadvertisers or otherwise actingon an advertisement in anymanner whatsoever.

''IMPORTANT''


INDIANAGRICULTURE GRO-WTHwillwitnessmoderatede-celeration in themedium-andlong-termdue to the lockdownto contain coronavirus,accord-ingtoaNITIAayogmember.

There is a fear of seriousoverall price deflation in thenon-agriculturesector,whereastheagriculturesectorislikelytowitness temporaryepisodes ofprice spikes at the consumer-level and price crashes at theproducer-level, NITI memberRamesh Chand observed in apaper.

“At themacro-level,Covid-19 is likely to affect agricultureandnon-agriculturesectorsdif-ferently.Whileononehand,thenon-agriculture sector is pro-jectedtofollowaV-shapedorW-shapedrecovery,theagriculturegrowth rate,on theotherhand,will followmoderate decelera-tion in themedium- and long-

termwithout sharp decline orsharp increase in output,” henoted in the paper titled‘COVID-19 and Food SystemRisksinIndia’.

Chand, who is an agricul-tural economist,said notwith-standing somegeneral predic-tions about the impacts ofCovid-19,theworldseemstobeentering anunchartered terri-toryof policymakingwithun-certainties.

“Prolongedcoronavirusdis-easewill pose a huge threat tovalue chains and supplychainsduetohigherrisksofdisruptionand cost,”he said,adding thatthis will put pressure on in-creasing self-reliance andevenself-sufficiency in food asagainst reliance on tradewithothers.

Chand,however,pointedoutthat it is heartening that amidthis pandemic,agricultural ac-tivities and food supply haveshownremarkable resilience inmostcountries.

PRESSTRUSTOF INDIAMumbai, May 18

AMERICAN BROKERAGEGOLDMAN Sachs expects theIndianeconomytocontractby5% in FY21, making it theworst performance by thecountryever.

Thebrokeragesaid theGDPwould contractbyamind-bog-gling45%intheJunequarterascomparedtotheJanuary-Marchperiod onanannualised basis,becauseof thecontinuing lock-downwhichischillingeconomicactivity,beforerecoveringlater.

A slew of watchers are ex-pectingacontractionintheIn-dian economy in FY21, someeven after the `20-lakh-crorestimulus announced by the

government.Goldmanwasear-lier expecting a 0.4%contrac-tionbeforerevisingitdowntoalevel it shares with JapanesebrokerageNomura.

“The (-)5%growthwefore-cast for FY21would be deepercompared to all ‘recessions’In-dia has ever experienced,” itsanalystswrote inthenote.

The virus continues tospreadinIndia,resultinginthepushing of the nationwidelockdownwith gradual relax-ationofrestrictions,whilecon-cerns among consumers andbusinessescontinue,it said.

ThereboundfromaquarterlyperspectivewillbeverystrongintheSeptemberquarter,itsaid,ex-

pecting a 20% growth in GDPover the level of June-end, butaddedthatthesamewillbegrad-ualfromthenon.Joiningitspeers,the brokerage said the reformmeasuresannouncedbythegov-ernmentwill helpgrowthonlyover themediumtermandarenotexpectedtohaveanybenefitinthenear-term.

●DEEPESTRECESSION EVER?


THECONGRESSONMondaysaid the fiscal stimulus pack-ageannouncedbythegovern-ment is “hopelessly inade-quate”given thegravityof theeconomic crisis as it amountstoonly`1.86lakhcrore,whichis0.91%of theGDP.

The party sought a revisedandcomprehensivepackageof10%of theGDP.

SeniorCongress leaderandformerfinanceministerPChi-dambaram said the stimuluspackage has left several sec-tions like the poor,migrants,farmers, labourers, workers,small shopkeepersandmiddleclasshighanddry.

“In ourview,a fiscal stim-ulus of `1,86,650 croreamountingtobarely0.91%ofGDPwill be totally inadequategiven the gravity of the eco-nomiccrisisandthediresitua-tion in which people findthemselves,”he said.

Chidambaram said mostanalysts, rating agencies andbanks have placed the size ofthe fiscal stimulus between0.8and1.5%.

On Sunday, former unionminister and Congress leader

Anand Sharma accused thegovernment of misleadingpeople with its “trickery, fak-ery, quackery” and said theeconomic measures an-nounced by the Centreamounted to only1.6%of In-dia'sGDP,i.e.worth`3.22 lakhcrore insteadof`20lakhcroreas claimed by the primemin-ister.

“We express our thoroughdisappointment and requestthe government to reconsiderthe stimulus package and an-nounce a revised and compre-hensive fiscal stimulus pack-age of not less than `10 lakhcroreof real additional expen-diture equivalent to 10% of

GDP,”Chidambaram said at apress conference throughvideo-conferencing.

Healsoaccusedthegovern-ment of being opportunisticby pushing reforms. It is by-passing stakeholer consulta-tion,legislationanddiscussionin Parliament on the packageand this will be strongly re-sisted and challenged in theHouse,he added.

“I think the government isdeliberately sidelining Parlia-ment.Ameeting of the Parlia-mentaryCommitteeshouldatleast beheld todiscuss the fis-calstimuluspackage,”theCon-gress leadersaid.

“If there is a genuine re-form that takes economy for-ward,wewill support it butwewill have to read the fineprint,”he said.

“The government is beingopportunistic. They are justannouncingwhat one personor one group of persons thinkis right without thinkingthroughtheconsequences.Ed-itorialsandarticlestodaypointout downside of some of theannouncements.”

“You can't fool all the peo-ple all the time. This fiscalstimulus package is inade-quate,”he said.

Chidambaram says govt’sfiscal stimulus packagehopelessly inadequate

DEEPAJAINANILucknow, May 18

ENCOURAGED BY THE Cen-tre’s announcement of a`90,000-crorereliefpackageforpowerdiscoms,thesugarindus-try in Uttar Pradesh is hopingthat its`1,500crore cogenera-tiondueswillbeclearedsoon.

In a letter to the chairman,UPPCL, Uttar Pradesh SugarMillers Association (UPSMA)has pleaded for a“preferentialtreatment” in the release oftheirduesthathavebeenpend-ing with the Uttar PradeshPower Corporation (UPPCL)sincethepast15months.

“The sugar industry hasbeen encouraged by the an-nouncementofareliefpackagetodiscoms thathasbeengivenfor the exclusive purpose ofclearingliabilitiestowardsgen-eratorsandwearesurethatliq-uidation of dues the cogenera-tion power supplied by thesugarmillswould get a prefer-ential treatment,” said DeepaGuptara, secretary general ofUPSMA,inthe letter.

“Sugarmillsareexpectedtoclear the cane dues at an earlydateasitisdirectlylinkedtotherural economy. It is thereforeimperative that receivables arecollected on anurgent basis in

the interest of the cane farm-ers,” it said, adding that thematterhasturnedintoaseriouscrisis as all the other revenuestreamsof thesugarmillshavebeenbadlyimpactedduetotheprevailingsituation.

TheUPsugar industry is al-ready saddled with massivecanepriceduestouchingastag-gering `15,000 crore and ex-perts feel that by the time thesugar season ends in another15-20days,canedueswillswellbyanadditional`2,000crore.

“The situation in the sugarindustryisgettingscarierbytheday.While on onehand,all ourrevenue streams have beenchokedduetothelockdown,ontheotherhand,weareseeinganupswing in caneplantation fornextyear.With suchhuge car-ryover liability and growingcane acreage,we do not knowwherewillwe go,”said a sugarmiller on condition ofanonymity.

UPsugar industry seeks‘preferential treatment’ forclearance of powerdues

Agri growthmay seemoderatedeceleration inmedium to longtermdue toCovid: NITImember

The brokerage also saidIndia’s GDPwould

contract by 45% in theJune quarter compared tothe January-March periodon an annualised basis,

because of thecontinuing lockdown

Ashwagandhacanhelp fightCovid-19, claimsresearchby IIT-D,Japan'sAISTAYURVEDIC HERB ASHWA-GANDHA can be an effectivetherapeutic and preventivedrug against the Covid-19 in-fection,acollaborativeresearchby IIT-Delhi and Japan's Na-tionalInstituteofAdvancedIn-dustrialScienceandTechnology(AIST)hasfound.

The natural compoundsfromAshwagandhaandPropo-lishavethepotentialtobeanef-fective novel coronavirus pre-ventive drug,according to theresearchteam.“TheresearcherstargetedthemainSARS-CoV-2'senzyme for splitting proteins,known as the main protease(Mpro), that plays a key role inmediatingviralreplication.Thisis an attractive drug target forthisvirus,andashumansdon'tnaturally have this enzyme,compounds that target Mproare likely to have lowtoxicity,”said D Sundar,head of IndianInstitute ofTechn-ology (Del-hi)’sBiotechnologydepartment.

“The findingsmaynot onlyconnect to save time and costrequired forscreening foranti-Coviddrugs,butmayalsooffersomepreventiveandtherapeu-ticvalueforthemanagementoffatalpandemic,andhence,war-rantprioritisedvalidationinthelaboratoryandclinicaltests.”

—PTI

PRESS TRUSTOF INDIANew Delhi, May 18

REFORMS OF THE WorldTrade Organization (WTO)have to take into account theinterests of all the membercountries and it has to comeout with a forward-lookingagenda in an inclusive man-ner, former Union ministerSuresh Prabhu said on Mon-day.

He said a newworld is go-ing to unfold,andmultilater-alism is under a seriousthreat.

“The question is how todealwith this threatwhen it isneededmost.TheWTOisonaventilator and it has to comeout of it.We have to find a so-lution. It can't be one way oranother.WTO's reforms haveto take intoaccount the inter-ests of all members. It has tocome out with a forward-looking agenda in an inclu-sivemanner,”he said.

Prabhusaid thiswhilepar-ticipating in a webinar on‘Covid-19and the Imperativeof Resurrecting theMultilat-eral Trading System’, organ-

ised byCUTS International.Participating in the pro-

gramme,formerdirectorgen-eral ofWTO Pascal Lamy saidthat a multilateral, rules-based and open trading sys-tem will be even more chal-lenged in a post-coronavirusworld.

“There has to be a balancebetweenmarket access needsand regulations related to en-sure safety and security forthe consumers...Also, it is ex-pected that there will be asteep increase in precaution-arymeasures,whichwill fur-

therharmcross-border trade.In sum, we will see a morefragmented trading system,”he said.

CUTS International Secre-tary General Pradeep Mehtasaid it is the responsibility ofthemiddle powers, includingIndia,to collectivelyprovideastrong leadership for the res-urrection of the multilateraltrading system.

WTOis164-membermul-tilateral body,which framesrules for global trade. India isone of its members since1995.

WTO’s reforms have to take into accountinterests of allmembers, says Suresh Prabhu

IndiaGDPto contract by5%in FY21: GoldmanSachs

IndiasupportsmoveatWHOto seekoriginof coronavirus

Ahmedabad


ADAYAFTER the government allowed e-commerce companies to deliver non-essential items in designated red zones(barringthecontainmentzones),Amazonand Flipkart said themovewill boost theMSMEs and revive economic activity.Amazonworkswithnearlysix lakh retail-ers and MSMEs, the company said in astatementonMonday.

So far, e-commerce companies wererestrictedtosellingonlyessential itemsintheredzones,althoughtheywerepermit-ted todelivernon-essentials in green andorange zones.The revised guidelineswillfacilitate resumption of full operation by

e-commerce companies.However,onlinefirmswill continue to deliver only essen-tial items in the containment zones, theguidelines notified by the ministry ofhomeaffairs (MHA) said.

Flipkart said it is awaiting advisoriesfromdifferent states andwill continue towork in accordance with the directivesissuedbythestategovernmentsandlocalauthorities. The MHA said states and

union territories may prohibit certainother activities in various zones based ontheirassessment.

FlipkartandAmazonjointlycommandclose to 80%market share in the e-com-merce sector.While announcing the Q12020 results,US-basedAmazon said thatIndia has been themost impacted inter-nationalmarket.

Meanwhile,PaytmMall said the com-pany has seen a 50% increase in sale oftrimmers, epilators, face scrubbers andother personal grooming products fromTier-2,Tier-3citiesandbeyond.Beforethegovernment allowed deliveries of non-essentials in red,green andorange zones,thecompanygotover35,000requestsfortheproducts.

CompaniesFINANCIALEXPRESS4 WWW.FINANCIALEXPRESS.COM

TUESDAY, MAY 19, 2020

❝❝

❝❝

DIGITALCOMMERCESriharsha Majety, co-founder & CEO, Swiggy

While this crisis has impacted our core business negatively, there isno doubt thatwe are nowat an inflection point for the penetrationofdigital commerce and homedelivery in India.This offers usopportunities to continue investing our efforts in grocery andother service offerings thatwe thinkwill continue to dowell

Uber makes masksmandatory forriders, driversUBERONMondaysaiditisintroducingasetofmeasures,includingmandatoryusageoffacemasksforbothdriverandriderinIndiaduringaride,aspartofitseffortstoensuresafetyamidtheCovid-19pandemic.UnderthefourthphaseoflockdownstartingMonday,statesandunionterritorieshavebeengiventhepowerdecideonthecontainment,buffer,red,orangeandgreenzones,aftertakingintoconsiderationtheparameterssharedbythehealthministry.

Indsildeclares lockoutatPalakkadunitIndsilHydroPowerandManganeseonMondaysaid ithasdeclared lock-outat itsPalakkad factoryinKeralaafterworkersdemandedawageincrease.“Duetoanunreasonablepre-conditionofademandforwageincreaseandconsequent refusal toattendtoworkbytheworkforceat itsfactoryatPalakkadpost theCOVID-19 lockdown,themanagementhasdeclareda lockoutof theplantuntilfurthernotice,”according toa regula-toryfilingbythecompany.

KiaresumesproductionatAnantapurplantKiaMotors India,awholly-ownedsubsidiaryofKiaMotors Corpora-tion,has resumedproduction at itsAnantapurplant afteramonth-longshutdown in a bid to contain thespread of coronavirus.Currently,theplant is operating a single shift andoperationswill begin in full forceonlyonce theCovid-19 situationturnsnormal.

NissanIndiaopensbookings fornewKicks

NISSANINDIAonMondaysaidthatithascommencedbookingsofthenewKicks2020fortheIndianmarket.TheKicks2020variantshavebeenpricedbetween`9.49lakhand`14.14lakh.

BoschIndia launcheshealthcare infoplatformBOSCHINDIAonMondayannouncedthelaunchof‘CareZeus’,aone-stopplatformthathelpstheusertoaccessinformationonavailabilityandaccessibilityofhealthcarefacilitiesinthewakeoftheCovid-19pandemic.TheplatformaccumulatescriticalinformationrangingfromavailabilityofICUbeds,typesofmedicalfacilitiesinahospital,testing/diagnosticcentres,toquarantinecentres.

Elgiarmlaunchesnewsterilisationsolutions

GARAGEEQUIPMENTmanufactureranddistributorATSELGi,asubsidiaryofElgiEquipments,onMondayannouncedthelaunchofitsnewrangeofvehiclesterilisationsolutions.TheOzoneAirSterilizerusesozonetoeliminatebacteria,virus,moulds,allergens,odoursandharmfulpollutantslikevolatileorganiccompounds,ensuringasafeandcleanin-vehicleenvironment.

UK’sMicroFocusrollsoutAPMtools in India

UK-BASEDPURE-PLAYenterprisesoftwareplayerMicroFocus rolledout itsLoadRunnerfamilyin IndiaonMonday.Thisunifiedsetofenterprise-gradeperformanceengineeringsolutions incorporatesintelligentanalytics,supportextensive integrationswithDevOpsandapplicationperformancemonitoring (APM) tools.

SCOPEorganiseswebinaronfinancialplanning

StandingConferenceofPublicEnterprises (SCOPE)organised itssixthwebinaron‘FinancialPlanningandLiquidityManagement inCurrentPandemicScenario’,withexperts fromKPMGaddressing theconcernsandneed foreffectivefinancialplanningand liquiditymanagement.The interactivewebinarsawtheparticipationofover300PSEexecutives,includingCMDsanddirectors.

Quick

View

Biocon Biologics announced its Q4FY20numbersrecently.TheongoingCovid-19cri-sishasimpactedthebusinessinasignificantway.Biocon Biologics CEOandMDChris-tianeHamacher discusses with SrinathSrinivasanthecompany’swaysofadjustingto the situationand executing operations inthenewnormal.Editedexcerpts:

Given thehit to theBiologicsbusiness inQ4,doyouseethistrendcontinuing?Biocon Biologics segment reported a de-growth of 21% to `357 crore inQ4FY20primarily due to operational challengesrelatedtoCovid-19.ExcludingtheCovid-19impact,BiologicssalesforQ4FY20reporteda single-digit growth.The temporary set-backcameafterrobustperformancesinthefirst three quarters of FY20.Weexpect thebiosimilars business to recover Q1FY21onwardson thebackofgrowthopportuni-tiesofourkeybiosimilarssupplementedbytheexpectedUSlaunchof InsulinGlargine

inmid-calendaryear2020.

BasedontheperformanceinFY20,isBio-conBiologicsstillconfidentofmeetingitstargetof$1billionrevenueinFY22?BioconBiologicshas reporteda strong rev-enuegrowthof29%at`1,951croreforthefullyearFY20on thebackof excellentper-formance in three consecutive quarters.Going forward,we expect tomaintain theupwardtrajectorybycapitalisingonthenewglobal opportunities thatwill propel us toourFY22target.

The recent commercialisation of Ful-phila (biosimilarPegfilgrastim) inCanadaandAustraliaaddstoouroncologyportfoliowith Trastuzumab in both countries.WeexpectsalesofbiosimilarPegfilgrastimandTrastuzumabtopickupintheUS.Moreover,severalpositivedevelopmentsduringFY20havekeptusontrackforthelaunchofSem-glee (Glargine) inmid-calendaryear2020.Glargine is a$2.2-billionmarket in theUS

andwebelievethisproductwillbeanimpor-tantcontributortoourgrowthinFY21andbeyond.WefurtherexpectPegfilgrastimandTrastuzumabsalestogaintractioninmanymarkets across Europe.As ourbiosimilarsstartmaking inroads inmost of thedevel-opedmarketsandwithcontinuedgrowthinmostoftheworldmarkets,weareconfidentofcrossing$1billioninrevenuesandreach-ing5millionpatientsannuallyinFY22.

WHOhassaidCovidmaynevergoaway.Insucha scenario,howdoyou see this as atemporarysetback?We are expecting the business to recoverfromQ1FY21onwards.

Fromthelonger-termperspective,Covidhas givenus an even largeropportunity toshape the biosimilar landscape. Globalhealthcare will be compelled to leverageboth generics and biosimilars to containhealthcare costs andwewould like toposi-tionourselvesinaleadershipleaguethatdri-vesourvisionofdeliveringaffordableaccesstoinnovativeandinclusivehealthcaresolu-tions.Thetotalglobalmarketofallbiosimi-larmonoclonal antibodiesandtherapeuticproteins is anticipated togrowfrom~$25billiontodayto$55billionin2025,basedonconsensusestimates.

Our scientific expertise in developingandmanufacturing complex biosimilarstogetherwithourpartner’scommercialisa-tionstrengthspositionuswelltobeaglobal

leaderinthebiosimilarsspaceoverthelongterm.

Doyouhaveenoughproductioncapacitytocatertoglobaldemandforyourbiosim-ilarsproducts?Wealways dovetail capacity to ourmarketplans and ensure that capacities comeonlinetocatertoincreasedmarketshareortoanticipatedregulatoryapprovals invari-ous jurisdictions.Whilewehave adequatecapacitytocatertoourneartermneeds,wehavetriggeredexpansionsofexistingfacil-ities andnewgreenfield constructions tosupportfuturedemandforourbiosimilars.During FY20, we received the US FDA’sapproval for enhanced manufacturingcapacityfortwoofourkeybiosimilarprod-ucts,TrastuzumabandPegfilgrastim.

Theseapprovalswillenableustoscaleupcapacitymulti-fold andaddress the grow-ing market opportunities in the US andotherglobalmarkets.

‘Covid provides largeropportunity to shape the biosimilar landscape’

DEVIKASINGHNewDelhi, May 18

THE ONGOING CRISIS and economicuncertaintydue to Covid-19has led to e-commerce companies looking foruniquehyperlocal distribution tie-ups.The supplychain disruptions caused due to the lock-downandprohibitionsintermsofdeliveriesacrossvariousregionshasresultedine-com-mercemajorstyingupwithlocalkiranasorneighbourhoodmom-and-popstores.

Recently-launchedonlinestore JioMartbyReliance Industries,whichwent live onWhatsApp in select locations inMumbai,claimstohavetiedupwithmillionsofkiranastores.PaytmMall announced its partner-shipwith10,000neighbourhood stores toscaleupitsgrocerydeliveryservicesaroundIndia.“Wehavebeeninvestinginscalingourhyperlocal operations over the last fewweeksandarenowofferingdeliveryofgro-ceryessentials inmore than20cities,withplans to expand further,” says SrinivasMothey,seniorvice-president,PaytmMall,whichplans to offer technological supportand services like inventorymanagement,paymentsandlocallogisticstothesestores.

AmazonIndia,whichforsometimenowhas been running a pilotwith over5,000corner stores on its platform,too,plans tofurtherexpandits‘LocalShopsonAmazon’initiativeandinvest`10croreinit.

Besides these,Flipkart has alsohad tie-upsinplacewithkiranassincelastSeptem-ber.However,thecompanyismostlytappingthem for last-mile deliveries unlike othercompanies,whichwant todeploythemforsellingessentialproductshyperlocally.

“Today,wehave37,000kiranapartners,ofwhich12,000actasAuthorisedBuyZones(assistedbuyzones fornewcustomers) andcloseto25,000ofthesearepartnersinlast-miledeliveryactivities,across thecountry,”saysaFlipkartspokesperson.

Experts say themove to tap kiranas bythese companies is to get a betterhold onIndia’sFMCGmarket initially.Accordingtomarket research agencyNielsen,there are120 lakh kirana stores in India and these

accountforabout90%ofFMCGanddom-esticretailsales.Ontheotherhand,only2%ofoverall FMCGsales in the countrygoviae-commerce currently, as per Nielsen. Insuchascenario,kiranascanplayavital roleinthestrategiesof thesefirmstobettertapthemarketandgainmore insight intocus-tomerbehaviour.Kiranascouldinturnalsobenefit bygetting insights on fast-movingitems,therebymanaginginventoryandcap-italinabetterway.Postthecrisis,expertssay,these partnerships can be leveraged bye-tailerstoexpandtoothercategories,too.

“While essential products are orderedmorefrequentlybycustomerscurrently,theaverage order value (AOV) is smaller andmargins are well defined with limitedexpansion.Hence,these companieswouldeventuallywant to expand to other cate-gories, unstructured products and non-brandedproductswhichhavehighermar-gins,” says Ankur Pahwa, partner andnational leader – e-commerce and con-sumerinternet,EYIndia.

Thebiggestchallenge,however,forthesecompanies is to figure out the rightmodeltoengagewithkiranas.Currently,mostplay-ershaveadoptedahyperlocalmodel,whichhadnotprovedcost-effective fore-grocerycompanies likeGrofers andBigBasket ear-lier,which latermoved to an inventory-ledmodel.E-commerce companies could alsohave a tough time convincing the generalstoreownersforadaptingthenewapproach.

“A kirana currently buys from 30-40FMCGdistributors,whoapartfromdeliver-ing the stocks everyweek,also help themwithmerchandisingetc.Notonlywill thesee-commercefirmshavetoreplacethesedis-tributors but also offer all the servicesoffered by them to the store,” says RajatWahi,partner,DeloitteIndia.

E-commerce firms turn tokiranas for distribution

SIDDHARTH CAVALE &CHANDINI MONNAPPABengaluru, May 18

DIAGEO, THEWORLD’S largest spiritsmaker, is exploring options to delist itsIndian arm,United Spirits (USL), by buy-ing outminority shareholders,CNBCTV-18reportedonMonday.

Diageo, the maker of JohnnieWalkerwhiskeyandTanquerayGin,currentlyownsabout 56% stake in United Spirits afterslowlybuildingitupoverseveralyears.

The company has started talks withinvestment bankers and consultants ona delisting offer, the CNBCTV-18 reportsaid, citing sources familiar with thematter.

“The management believes that the

currentmarketconditionsandthepricingofUSLisconducivetoadelistingandthat’swhy they are exploring this option,” theCNBCreportsaid,citingaseniorexecutiveat the company,who did not want to benamed.

UnitedSpirits’shareswere tradingflatat 0825 GMT on the National Stock

Exchange onMonday.The stock is downnearly 25% over the past threemonths,slightly outperforming the broaderNifty50 index’s27%decline.

UK-based Diageo’s shares were up1.8%at2,792penceontheLondonStockExchange.

Diageo India said it would not com-mentonmarketrumoursandspeculation.

The unit counts the Indian govern-ment and institutional investors such asVanguard Group among its minorityshareholders.

Diageo’s move comes nearly a weekafterminerVedantaResources said itwasdelistingitsIndianunitVedanta,asitseeksto accelerate the simplification of its cor-porate structure amid the coronaviruspandemic. REUTERS

Diageo exploring options todelist United Spirits: Report

In a boost to the‘Make in India’initiative inthe defence sector, the government hasunveiled several reforms over theweekend,whichwillgiveafilliptolocalmanufacturinggoing forward in India’s defence space. JDPatil,whole-timedirector (defence& smarttechnologies),Larsen andToubro, told FE’sShubhraTandonthatthereformswilldriveinvestmentsintothesector.Excerpts:

Whatwill be the impact of the govern-ment’s announcement tonotifya list ofweapons/platforms for ban on importwithyear-wisetimelines?Stopping importsphase-wisewithdefinedtimelineswill provide a clear roadmap forIndianindustrytobuildcapacity&capabil-ity,foster indigenousR&Dandinnovation.This reformwouldprovide long-termvisi-bility,muchneededtodriveinvestmentsinthissector.

How will indigenisation of importedspareshelp?Significant opportunities, especially forMSMEs,will openupwith amove tomax-imise indigenisation of imported spareswith tie-upswithOEMs insteadof import-ing them.These initiatives had been pro-motedbythedefenceminister for indige-nous life cycle support to our majorplatformsimportedinearlieryears.

Thegovernmenthas spokenabout sepa-ratebudgetprovisioningfordomesticca-pitalprocurement;whatdoesthisentail?

Aseparatebudgetfordomesticcapitalpro-curementwill protect the indigenouspro-grammes that have seen repeated defer-ment,givenbudget constraints causedbybig ticketG-to-G contracts that have beenentered in to asurgent requirements.Thiswill bring in renewed focus on indigenousdefence production, build confidence ofIndian private sector firms to invest andbuildcapability.Italsoprovidesassurancetothe supply-chain ecosystemof continuedutilisationof built-up capacity.It is hopedthispartofthebudgetwillgrowinpercent-age share,yearonyearas directional com-mitmenttoindigenisingdefence.

Howwill time-bounddefence procure-mentprocessandfasterdecisionmakingchangethecurrentscenariointhesector?Time-bound procurement process andfasterdecisionmakingwill accelerate thecontractingprocessandproductioncycles.Itwillmake the equipment availablewithintechnological life cycles and at lowercostsbycutting downon inflation component,workingcapitalcostsandforeignexchangeratevariationsassociatedwithlongercycles.

The government had allowede-commerce companies todeliver non-essential items in

designated red zones, barring thecontainment zones

GEETANAIRPune, May 18

TATAMOTORSHAS resumedproductionatitsPimpriplantinPunefromthisweek.The decision to restart operations wastakenafterthePimpri-ChinchwadMunic-ipal Corporation and the Maharashtrastate industries department approvedplans to restartoperations fromSaturdayonwards. The company is permitted tostartwith33%of theworkforce andded-icated company transport facilities apartfrom strictly following new safety andhygienenorms.Thecompanyhadsaidthatthe Pune plant begins with ambulancevehiclemanufacturing.

TataMotors started operationswiththe general shift in themorningonMon-daywithspecialgatesandentrypointscre-atedtocheckemployeehealthandensuresocialdistancingnormswhileenteringtheplant.Thecompanydidnotshareanyfur-ther details on the number of employeesat theplantortheproductionplans.

TataMotorshadalreadystartedopera-tions at Pantnagar in Uttarakhand andSanand in Gujarat plants last week. Thecompany had said it was making a cali-bratedstart across all plantswith limited,

essential staff. Selected dealerships forcommercial and passenger vehicles toocommencedoperationsnationwide

Guenter Butschek, CEO & MD, TataMotors,hadearliersaidinastatementthatas theirprioritywas the safetyandwellbe-ingofemployees,customersandecosystempartners, they are restarting operationswith limited,essential staff in each plant,adhering to all mandated safety normswhile efficiently meeting operationalrequirements.Wewill scale up operationsin a gradedmanneras the entire enablingecosystemofsuppliers,vendors,dealersandcustomerscomeuptospeed,Butscheksaid.

The company said all mandated safetynormswerebeingdiligentlyfollowed,withdedicated ‘restart’ teams at each locationandithadconductedintensivetrainingformaintaining social distancing at allwork-places, shop floors and canteen facilities.Enhancedsanitisationmeasuresarebeingimplemented and only limited, opera-tionally required staff are being asked tocometowork,TataMotorssaid.

TataMotorsmakes both commercialvehicles and passenger vehicles at thehighlyvertically integrated Pimpri plant.Tata Motors also has its R&D, productengineering centre, tool-making divisionand design studios based here.The com-mercial vehicle plant has six assemblylinesmanufacturing HMCV,LCV trucks,buschassis,ICVultrarangetrucksandbuschassis, UVs, pick-ups,Winger vans andSUVs,withcapabilitytoproduce730vehi-cles per day,working in two shifts. TataMotors alsomakes defencevehicles fromhere.ThePVplanthas twoflexibleassem-blylineswithcapacityofproducing1,000carsperdayacross twoshifts.

But for now the company can operateonlyoneshiftperdayaspeopleandmate-rial movement is not allowed between 7pmand7am.

TataMotors restarts ops at Pune plant


MARUTISUZUKI INDIA (MSI)onMondaysaid ithasdeliveredover5,000cars in thepastfewdayswithover1,350showroomsoperationalacross thecountryatpresent.

Thecompanyhasputinplacecompre-hensive standard operating procedures(SOPs) for all its dealerships,MSI said in astatement.

With the SOPs in place, over 1,350

Maruti Suzuki showrooms and over 300TrueValue outlets are operational now, itadded.

“The company has put in place com-prehensivenorms toensure that theircarbuying experience is completely safe.

Thesenormsarebasedonguidelinesfromthe central and state governments,”MSImanaging director and CEO KenichiAyukawasaid.

He further said, “We would like toencourage our customers to digitallychooseandbooktheircarandtakeadvan-tage of the convenience of homedeliveryof theirnewvehicles.”

MSI has a network of 3,086 show-roomsacross1,964townsandcities.

PTI

Maruti Suzuki delivers 5k cars in pastfewdays; 1,350 showrooms operational

Maruti has a network of3,086 showrooms across 1,964

towns and cities

●TALKSWITH INVESTMENTBANKERS

● INTERVIEW: CHRISTIANE HAMACHER, CEO &MD, Biocon Biologics

Tata Motors plant in Pune onMondayPHOTO: DANIELSTEPHEN

● INTERVIEW: JD PATIL, whole-time director(defence and smart technologies), Larsen andToubro

‘Separate budget for domesticcapital procurement toprotectindigenous programmes’

Amazon,Flipkart hail govt’smove

Ahmedabad

COMPANIES 5FINANCIALEXPRESS


NOTICE-CUM-ADDENDUM NO. 6/2020-21

NOTICE-CUM-ADDENDUM TO THE SCHEME INFORMATION DOCUMENTS (“SIDs”), KEY INFORMATION MEMORANDA (“KIMs”)

AND STATEMENT OF ADDITIONAL INFORMATION (“SAI”) OF BOI AXA MUTUAL FUND (“FUND”)

Introduction of Systematic Investment Plan (SIP) Pause Facility (“The Facility”):

Notice is hereby given to all the existing investor who have an ongoing SIP that a new facility “SIP Pause Facility” would be introduced in the

schemes of BOI AXAMutual Fund effective from May 19, 2020 to enable investors to temporarily pause their SIP, subject to the following terms

and conditions:

• The SIP Pause Facility is available for SIP registration with monthly frequency only;

• The request for SIP Pause should be submitted at least 15 days prior to the subsequent SIP date;

• The request for SIP Pause can be for either 3 instalments or 6 instalments;

• Investor can opt for the SIP Pause facility only once during the tenure of a particular SIP; and

• The SIP shall continue from the subsequent instalment after the completion of Pause period automatically.

Further, in order to avail this facility the investors are required to submit a signed SIP Pause facility form duly complete in all respects at any

of the Oficial Points of Acceptance of BOI AXA Mutual Fund. The Investors can also avail this facility online by registering their request at

www.boiaxamf.com.

The AMC reserves the right to change/modify the terms and conditions of the Facility or withdraw the Facility at a later date. Investors are

requested to kindly refer the SIP Pause Facility Form and instructions before enrolment.

This Notice-cum-Addendum forms an integral part of the SID/KIM/SAI of various schemes of the Fund (collectively documents). All other terms

and conditions appearing in the documents being modiied through this addendum remain unchanged.

For BOI AXA Investment Managers Private Limited

(Investment Manager for BOI AXA Mutual Fund)

Place : Mumbai Sd/-

Date : May 18, 2020 Authorised Signatory

Unionshit out atTata Steel’sEuropean job cut plans

REUTERSAmsterdam,May 18

LABOUR REPRESENTATIVESATTataSteel’sDutchoperationssaid onMonday the companyplannedtocut1,000jobsintheNetherlands and that the sub-sidiary’s chairmanwould stepdown after opposing the lay-offs.Aspokesman forTataSteelEurope confirmed that chair-manTheoHenrarwillleaveTataSteelNetherlands in adecisionagreed by “mutual consulta-tion.”

Tata Steel Europe begantalkswithworkersinNovemberover a “transformation pro-gramme” that would lead to1,250jobcutsinEurope,follow-ing a decision by EuropeanUnion competition regulatorsto block a joint venture with

Germany’sThyssenkrupp.TataSteelNetherlands’Cen-

tralWorksCouncil(CWC)saidina statement on Monday TataSteel Europe aimed to cut itsDutch operations in order tosave its loss-making Britishoperations.

“TheCWCdoesnot agree tothe scrapping of 1,000 jobs intheNetherlands,”theCWCsaid.

Tata Steel Europe spokes-manDamienBrooks said therewas no conflict between theBritish andDutch subsidiaries,thoughboth are in restructur-

ing talks.Tata Steel Europeemploys21,500people,includ-ing9,000peopleatIjmuideninthe Netherlands and 8,500 inBritain.Brookssaidtalksoverjobcuts in Europe that began inNovemberwerecontinuing.

LabourUnionFNVSteelsaidHenrarhadtriedtopreservetheDutchoperations.“TheownersofTataSteel inIndiaarekeentodownsize Ijmuiden,” RoelBerghuis of FNVSteel said in astatement. “Henrar had beenabletoconvincethemtimeaftertimeof the large importanceof

thesubsidiaryforTataSteelandtheNetherlands.”TheCWCsaidHenrarhadbeen“dismissed”inwhat they described as an“incomprehensibleandill-con-sidered”decisionmade in theinterestsofTataSteelUKat theexpenseoftheDutcharm.

“Both the shareholders inIndiaandtheEuropean leader-shipofTataSteelhavebeenfail-ing tosolveproblems inBritainfor years,” it said. “Billions ofpoundsandeuroshavenotbeenabletomakeTataSteelUKprof-itable.”Tata Steel Europe saidlastmonth it haddelayed reor-ganisationplansuntilafterJuly1,due to the coronavirus pan-demic. Steelmakers aroundEuropeareoperatingatreducedcapacity due to a drop indemandfromtheautoindustryfollowingthepandemic.Brooksconfirmed that Tata Steel ismakinguseofgovernmentsup-port programmes in bothBritainandtheNetherlands,butthecompanyisnotworriedthatwill createpoliticalbarriers toarestructuring.“Idon’tthinkso,”hesaid.“Weneedtorestructuretosurvive.”

CompanytomakeNetherlands bear thebruntwith1,000lay-offs,say labourrepresentatives

Reuters file photo of a company logo outside theTatasteelworks near Rotherham in Britain

INDRONILROYCHOWDHURYKolkata, May 18

ATATIMEwhenthegovernmentisbringinginreformstoendCoalIndia’s (CIL’s) monopolywhilealso allotting funds to enhanceevacuationfollowingthesettingofatargetofproducing1billiontonne by 2024, power sectordueshaveputtheminingmono-lithunderfinancialstress.Someof the subsidiaries are forced towithdraw its fixed depositsbeforematurity,whilealsolook-ingforcredit linesto meettheirworkingcapitalneeds.

Receivables frompowerutil-ities have risen to an all-timehighof`17,000croreasinAprilthisyear.Thishassetalarmbells

ringingintheminingPSU,withrisingconcernoffinancialunvi-ability.While costs are likely togoupwithincreasedproductiontarget and need to purchasemore equipment, realisationneedstobeatparwithoutput.

Power sector dues havealready gone up as high as 75daysofsupply,thehighestsofar,encumbering the financialinflowofthecompany.

There isdemandforfurtherextending credit lines for coalsupplies fromthepowersector

whichleavesthesubsidiariesofCIL gasping for liquidity. Thesubsidiaries are already stret-ched thin financiallybut inde-pendent power producers arepushinghard fordeferment ofpayments forcoal supplies.Thepending payments from boththestateandcentralgeneratingcompanies and independentpower producers to CIL as awholespikedupcloseto37%ina three months span from`12,423croreasofJanuarythisyearto`17,000croreasofApril,an increase of `4,577 crore, asourceintheknowsaid.

To ease the economic stressof its powerutilities and othercustomers under the ongoingpandemic,CILoffereda slewofrelief measures like usance of

letter of credit, contunance ofsuppliesdespitepaymentdefa-ult,extendingthevalidityperiodforliftingcoalunderpowerFSAsand all auctions without anypenalty.ButthemountingdueshaveputCIL in a financial bindthat subsidiaries like BharatCokingCoal andCentral Coal-fields have becomecash strap-ped and have been forced forprematurewithdrawal of fixeddeposits.The subsidiaries haveapproached their bankers forloanstopayoffsalariesandfundtheirworkingcapital.

CIL’soutstandingduesfromthe power utilities stood at`14,374 crore at the close ofFY20. But in one month theduesjumpedby`2,626crore,anincreaseof18.3%byApril2020.

Power sector dues put CILunder stressReceivables from powerutilities have risen to anall-time high of `17,000 cr

as inApril this year


BILLIONAIREANILAGARWAL-ledVedanta’soilandgasdivisionCairnCEOAjayDixithasdecidedtohanguphis boots atmonth-end after completing his con-tractual term, becoming thefifthchiefexecutivetoleavethefirm since itwas taken overbythe mining baron more thaneightyearsago.

Dixit, who was appointedCEOofCairnOilandGasinmid-Aprillastyear,hasdecidednottoseekanextensionofhiscontractwhen it comes to an endat theendof themonth,sourceswithdirect knowledge of the devel-opment said. The company,however,insistedthatDixit,61,wasmovingonaftercompletinghiscontractedtenureof5years

attheendofMay2020.“AjayKumarDixitmoveson

fromhisroleasCEO,CairnOil&Gas,VedantaLtdasheconcludeshis contractwith the companyonMay31,2020,”thecompanysaid when reached for com-ments. While the companyinsistedthatDixitwasgoingoutinthenormalcourseofhistermcoming to an end,sources said

the employeeswithin the firmcame toknowofhis goingonlyonMondayand if his contrac-tual tenureendwasroutinethemanagementwouldhavemadeasuccessionannouncement.

The retirement age inCairnis 58years.“Besides his recentstint in oil and gas, he con-tributedtoVedanta’spower,alu-mina and bauxite and alumu-niumbusiness.

“Hehasledthecompany’soilbusiness and digital transfor-mation todrive production forthe energyneedsof thenation,including through recent oilpricevolatilityandtheCovid-19pandemic, and the manage-mentwisheshimthebestashemovesontopursuehispersonalgoals,”thestatementsaid.Dixit,itsaid,“willretirefromthecom-panyonMay31,2020”.

Vedantaoil&gasheadAjayDixitquits; co says termcomes to end

PRESS TRUSTOF INDIANew Delhi, May 18

TATA CONSUMER PROD-UCTS (TCPL) onMonday saidit would acquire the stake ofPeopsiCointheirjointventureNourishCoBeverages.

Thesizeof thedealwasnotdisclosedbythe company.

ThemoveisaneffortbytheTata Group firm to widen itsportfolio in the growing foodandbeveragesspace,TCPLsaidina statement.

NourishCo, a 50:50 JV ofTCPLandPepsiCo,operates inthe healthy hydration spaceandhasbrandslikeHimalayanmineralwater,TataGlucoPlusandTataWaterPlus.

“This move is consistentwithTataConsumer’sfocusonwidening its portfolio in thefood and beverages space.Thesebrandshavebeencraft-ingtheirgrowthmodelswhicharenowreadyfordeploymentonawiderscale,”TCPLsaid.

NourishCo was formed in2010 as a joint venturebetweenTataGlobalBeverages(nowTCPL)andPepsiCo India.

TCPL intends to use itssizeable resources, the capa-bilities acquired and thebrands it now has , to give“wings to its ambition in thevalue added liquid refresh-ment beverages space” inIndia,it said.

“This decision has beenmade after extensive deliber-ation between the JVpartnersandwe feel this will bring ingreaterfocus totheNourishCoBusiness.Theliquid beveragescategory has exciting growthpotential and this movewillhelp us strengthen andwidenourpresence in it,”TCPLMD&CEOSunilD’Souza said.

Over the years,NourishCohas built a capable teamandanetwork of distributors,co-packers and vendors.

Tata to buyout PepsiCostake in JVNourishCoBeverages

RRAVICHANDRANChennai, May 18

TIRUPUR GARMENT ANDKNITWEARclusterisupbeatonthe directorate general of for-eign trade’s (DGFT’s) Saturdaydecisiontoallowexportofnon-medical,non-surgicalmasks.

India’s largest garmenthubexpects an additional revenuegeneration of anywherebetween$500million and$1billion annuallygoing forwardas wearing mask is set tobecomeauniversalnormglob-ally, following the Covid-19pandemicattack.

Infusing cheer into theindustry, the government hasallowed the exports of non-medical andnon-surgicalma-sksofcotton,silk,woolandknit-tedwhilecontinuingtoprohibitallothertypessuchasN-95andsurgical masks. The TirupurExporters’Association(TEA)hasbeenpressing theUniontextile

andcommerceministriestoall-owmask exports fora fewmo-nths. TEA president Raja MShanmugham said: “We arehappy to have been allowed toexportthenon-surgialandnon-medicalmasks,whichcameatatimewhen thegarment indus-try is under stress with theexports due toCovid-19acrosstheworld.Wehavebeengettingenquiries for masks for sometimenowbutcouldnotdosoasthe government prohibitedexportof suchmasks till Satur-day.

The decision to allow notonly brought immenseprospectstothetextileindustrybutalsowillhelpgenerateaddi-tional revenue for the 1,500-oddexportunits.”

“We(thecluster) areexpect-ing anadditional revenuegen-erationtothetuneof$500mil-lion in the immediate future,andhas thepotential to gener-ate$1billionover thenext few

years as theworld,particularlytheUSandtheEuropeanUnionwillwitness‘newnormal’goingforward.Even countries acrosstheworldhavestarteddemand-ing masks for their regularusage.Evenbigretailcustomersof Tirupur have alreadymadeenquiries for samplingmasksand all the units herewill startsendingsamplessoonandthencomes the order for exports,”Shanmughamsaid.

He said: “Interestingly,majority of the buyers areexpected to source masks indesignandfabricstomatchthatof readymade garments. It'sgoingtobeacolourfulandaper-manentexportopportunityforTirupurcluster,at least fornextfewyears.”

According toTEApresident,hundreds of MSME units,engagedingarmentexports,aresettobenefitimmensely,which,inturn,willhelptheadjacencies(ancillaryunits).

Tirupurclusterexpects additionalrevenueof$500mfrommaskexports

CO-WORKING MAJORWeWork India, owned by realty firmEmbassyGroup,will layoffaround20%of its total500employ-eeswitheffectfromJunetocutitsoperationalcostsafteritsbusi-nesshitbythecoronavirusoutbreak,sources said.

KaranVirwani,theCEOofWeWorkIndia,informedthisdeci-sion through internal communication to company employees.Around 100workerswould be affected by the decision, sourcessaid.According to sources,WeWork Indiawill honour thenoticeperiod and also offer severance packages to its employees.Thecompanywill continuemedical insurance until the end of thisyearandalsooffer its coworkingcentres freeof cost. —PTI

WeWork India to lay off 100

Ahmedabad


FINANCIALEXPRESS6 WWW.FINANCIALEXPRESS.COM

❝ ❝

APACKAGE FORALL?Congress leader P Chidambaram

I think thegovernment is deliberately sidelining

Parliament.Ameetingof theParliamentary

Committee should at leastbeheld todiscuss

the fiscal stimuluspackage

WE OFFER OURmain takeawaysfrom the fiverounds of eco-nomic stimulus

packages announced in lastweek andtheir likelyeconomic impact.

Inourview,thegovernmentneedstodeliver its policy response inmultiplephases.Inthepresentsurvivalphase,thecash flow shockmust be addressed topreventpermanentdamagetotheecon-omy.When the infection curve is undercontrol,thegovernmentwillneedtostepinviaademandstimulus forconsump-tion and investment to revive growth.Fixing the financial plumbing willrequire recapitalisation of PSBs,and acomprehensive one-time solution todealwith thebaddebt situation.Struc-tural reforms are crucial, though theydon’taddressnear-termchallenges.

The Centre has tried to ensure sur-vivaloffirms,vulnerablesegmentsofthepopulation,andtheresourceconstraintsfacedbystates.ForMSMEs,100%guar-anteed loans (`3 lakh crore), subordi-nateddebt,andequityinfusionprovideliquidity.Raisingtheminimumthresh-old for insolvencyproceedings shouldinsulate MSMEs. Some relief has alsobeengiventosmallbusinessesviaa2%interest subvention (MUDRA-Shishuloans) and to street vendors to enablethemtorestartoperations.

Formorevulnerable segments, theincreased allocationunderMGNREGAwillprovidejobsandincomesupporttoreturningmigrantworkers.Forfarmers,additionalcreditworth`2lakhcrore(viaKisan credit card), and an emergencyworking capital funding for crop loans(viaNABARD) have also beenprovided.Support forthe formal sector,however,hasbeenlimited(toEPFcontribution).

Overall,weestimatetotal supportof~1.9%ofGDPforMSMEs,ofwhichthebulk is reflected in theCentre’s contin-gent liabilities,similar to the ~0.4%ofGDPsupport offered to shadowbanks(see graphic).Thevulnerable populacehave received ~1.2%ofGDP,ofwhichthebulk is reflected in the fiscal deficitimpact.Forfarmers,theoverallsizeoftheintervention is quite large,though theactualfiscaloutgoislimited.

Preventing bankruptcies: Fresh

initiationof insolvencyproceedings fora year is suspended, and Covid-19-related debt excluded from thedefini-tionof‘default’underIBCtogivebreath-ingspacetocash-strappedfirms.

Assessing credit risk: Rising riskaversion among banks and MFs hasresultedinaliquiditypinchforhigh-riskborrowers.GuaranteedMSME loans,aspecial liquidity scheme for shadowbanks,and thepartial credit guaranteeschemeforNBFCswillhelpaddress thisissue.Thesuccessofthefirstwilldependon banks’ appetite to disburseMSMEloans. The scheme for shadow banksshould see higher take-off,andwouldbenefit from more allocation. Partialcreditguarantee(forAAorunratedpaperofshadowbanks),though,mayseelowerinterest—defaultrisksarehighfortheseborrowers,and a 20%guaranteemaynotbeenoughtoenticebanks.

Missingelements:First,some for-mal economysectors—aviation,hospi-tality,travel&tourism—arelikelytosuf-ferfromlowerrevenuesformuchlongerfrombeingrequiredtooperateatalowercapacity.The stimulus packagedidnotofferanytax relief, interest subvention,or wage subsidy to these. Second, thebanking sector’s immediate need for

recapitalisationwasnotaddressed.This,alongwithoverall sectoral reformsandaddressingtheNPAcrisis,isessentialformedium-termgrowth.Third,except fortheone-yearextensionof credit-linkedsubsidies for affordable housing,demand stimulusmeasures aremiss-ing—likelytodisappointinvestorslook-ing fora growthbooster.But,demand-related stimuluswill become essentiallater;survivalremainstheprioritynow.

Reforms:The Centre’s announce-mentoflonger-termreformsarefocusedmainlyonagricultureandtheindustrialsectors.Theseinclude:

■ Increasing infrastructure invest-ments in agriculture value chains,attractingprivateinvestments,enablinghigherpricerealisationforfarmers,etc

■Allowingcommercialcoalmining,andtransferofmineralminingleases

■HigherFDIindefencemanufactur-ing(from49%to74%)

■Privatisationofgovernmentpowerdiscomsinunionterritories

Not all announced reformsarenew,but,thestructuralreformssignalthatthegovernment is looking at privatisation,andattractingmore risk capital to raiseIndia’smedium-termgrowthoutlook.

Growth outlook unchanged: Of

theCovid-19supportpackageof10%ofGDP,RBIliquiditymeasuresaccountfor4%ofGDP,while fiscal/financial/othermeasuresamountto6.5%ofGDP.Ofthelatter, the bulk emanates fromhigherfinancial supportviahighercontingentliabilities(guarantees)at2.15%ofGDP,whilenet cashoutgoings fromtheCen-tre’sbudget(aggregatingfiscalimpactofall packages) amounts to only0.8%ofGDP. The government has aimed formaximumbangwithminimumbuck.

We expect the Centre’s FY21 fiscaldeficit to slip to7%ofGDP,double thebudgetestimate,takingintoaccounttheimpact of weak nominal GDP growth(~0.5% of GDP), lower net revenuereceipts (~2.6%), disinvestment pro-ceeds (~0.9%),and the fiscalmeasuresannounced (0.8%),which shouldmorethanoffsetmeasurestosaveexpenditure(~1.3%).Thenetfiscalimpulsetogrowthshould remain low.State governments’deficit has been allowed towiden from~3%ofGSDPto5%,assuming reformconditionsaremet.Thegeneralgovern-ment deficitwill likelywiden to 10.5-11.0%ofGDPinFY21.

TheCentre has raised its borrowingceilingby2%ofGDPfrom`7.8lkhcrto`12lkhcr,whilestategovernments’bor-rowingceilinghasbeenrevisedhigherby2%of theirGSDP,from`6.41 lkh cr to`10.69 lkh cr.Overall governmentbor-rowingwill riseby4%ofGDP(`8.5 lkhcr) in FY21.We continue to believe theCentre will announce additional bor-rowings,butinH2FY21.

Thepackagelargelymeetsourexpec-tations.However,webelievethegovern-mentwillneedtostep inagaintorevivegrowth through demand stimulus, aswellasmeasurestosupportthefinancialsector.Intermsoftheeconomicoutlook,weexpect a slowanduneven restartingof the economy. We expect real GDPgrowth in 2020 to contract -5%y-o-yfrom-0.5%,withgrowthtoremainneg-ativeforthreeconsecutivequarters.Ourquarterlyprofilehasgrowthfalteringto1.5%y-o-yin1Q2020,beforeplungingto-14.5%in2Q,andthenweaklyrecov-eringto-6%in3Q,and-1.5%in4Q.

EditedexcerptsfromNomura’sIndia:Howpotentistheeconomicvaccine?

(May18,2020)

●COVID STIMULUSTHEGOVT'S ECONOMIC STIMULUS PACKAGEAIMS FORMAXIMUMBANGWITHMINIMUMBUCK.THE REFORMSANNOUNCEDCOULDBEAMEDIUM-TERM POSITIVE, IF IMPLEMENTEDWELL

SONAL VARMA&AURODEEPNANDI

Authors are ResearchAnalysts,AsiaEconomics, Nomura.Viewsare personal

MOHAMEDA EL-ERIANChief EconomicAdviser,Allianz. Views are personal

HAVINGALREADYBEEN buffeted bytwobig shocks in the last tenyears,theglobaleconomy’shighlyinterconnectedwiringissufferingathirdbecauseoftheCovid-19pandemic.Globalisation thusfaces a three-strikes-and-out situationthat couldwell result in a gradual butratherprolongeddelinkingoftradeandinvestment, which would add to thesecular headwinds already facing theglobaleconomy.

Appeals to recommit to the currentglobalisationprocessarealmostcertainto fall on deaf ears—particularlybecause this latest shockwill bedrivensimultaneouslybygovernments,com-panies, and households in developedcountries.Thosekeentopreserveglob-alisation in the longer term wouldinstead be better advised to focus onminimising the disruption caused bythe coming period of deglobalisation,and laying the groundwork for amoresustainableprocess thereafter.

For starters, it is already clear thatmany firmswill look to strike amorerisk-aversebalancebetweenefficiencyandresilienceastheyemergefromthedamagingpandemicshock.Thecorpo-rate world’s multi-decade romancewith cost-effective global supplychains and just-in-time inventorymanagementwill giveway to amorelocalised approach involving thereshoringof certainactivities.

Thisinclinationwillbereinforcedbygovernmentmandates to secure saferinputs for sectors deemed to be ofnational-security interest. We arealreadyseeingsuchrequirementsintheUnited States for energy generation,telecommunications,healthcaremate-rials, and pharmaceuticals. It is only amatterof timeuntil this trend spreadstoothersectorsandcountries.

The aftermathof the current crisis-managementphase is also likely to fea-tureanintensifiedblamegame,addinga

geopolitical impetustodeglobalisation.Already, the US is complaining thatChina didn’t do enough to contain thespread of the virus and inform othercountriesof itsseverity.SomeUSpoliti-cians have even called forChina to payreparations as a result. And, many inAmericaandelsewhereperceiveChina’sinitialCovid-19responseasyetanotherexampleofthecountryfailingtoliveuptoitsinternationalresponsibilities.

Moreover, theworsening geopoliti-cal situation will likely intensify theweaponisationofeconomic-policytoolsthat accelerated during the recentChina-UStradewar—thesecondrecentblowto the globalisationprocess.That,in turn, will confirm many multina-tionalcompanies’fearsthattheycannolonger rely on two key operatingassumptions:theevercloserintegrationand interconnectedness of global pro-duction,consumption,andinvestmentflows;andtheorderlyandrelativelypre-dictable resolutionof trade and invest-ment conflicts through multilateralinstitutionsapplyingtheruleof law.

Today’santi-Chinarhetoricwillalsogive fresh momentum to the firstpushback against globalisation thatemergedadecadeago.With someseg-ments of thepopulation feeling alien-ated andmarginalised by the process,the anti-establishment backlash gaverise, in some places, tomore extremepolitical movements that have scoredsome surprising successes, not leastBrexit. Such developments greatlyweakened global policy collaboration,as has been starkly evident in theworld’s uncoordinated approach tocontainingCovid-19.

This is not an ideal time for theworld economy to undergo seculardeglobalisation.Most countries, andvirtually all segments of theireconomies (companies,governments,andhouseholds),will emerge fromthe

crisiswithhigherlevelsofdebt.Absentamajor round of debt restructuring,developingcountries inparticularwillfind their ability to service this debthamperedbyhighlevelsofunemploy-ment, lost income,more sluggish eco-nomic activity, and, perhaps, lessdynamicconsumption.

Againstthisbackground,thosewhoappreciate the power of cross-borderinterconnectivity to unleashwin-wineconomicopportunitiesandreducetherisk ofmajormilitary conflictswill beinclined to defend the pre-pandemicstatusquo.But,thisapproachisunlikelytogaintractionatatimewhengovern-mentshavebecomemoreinward-look-ingastheybattlethepandemic’sdirectand indirect damage, companies arestill reeling from disruptions to theirglobal supply chains andmarkets,andhouseholdshaveaheightenedsenseofeconomic insecurity.

Rather than fight an unwinnablewar of principle, advocates of globali-sation shouldadopt amorepragmaticapproach that focuses on two priori-ties. First, they should find ways tomanageanorderlyandgradualprocessof partial deglobalisation, includingavoiding a descent into self-feedingdisruptions that result inunnecessarypain and suffering formany. Second,they should start putting in place afirmer foundation to relaunch amoreinclusive and sustainable process ofglobalisation,inwhichtheprivatesec-torwill inevitably play a bigger designand implementationrole.

Toreverttothebaseballanalogy,thisthird strike against globalisation hassent it back to thedugout fornow.But,as in baseball, therewill be another at-bat.Thechallengenowistousethetimeon the bench to understand the situa-tionbetterandcomebackstronger.Copyright:ProjectSyndicate,2020.www.project-syndicate.org

Forsaken migrantsThe25migrantworkerswho losttheir lives in a trailer-truck collision inUttar Pradesh’sAuraiyadistrict, sixwho lost their liveswhena truckoverturned inMadhyaPradesh’sSagar district, 16who lost their liveson the tracks inMaharashtra’sAurangabad, andmanymorewholost their lives onnational highwaysdue to accidents andexhaustionwereour compatriots.Thenationloses lives not just to the coronavirusbut also to thegovernment’sinsensitivity.Abetter plannedlockdown, adequate financialsupport, and transport facilitiescould have avoided these tragicdeaths. How thegovernmentremains unmovedandunruffledbythe tragedies and refuses to helpstranded, cash-strappedmigrantworkers is incomprehensible. It hasdemonstrably abdicated its basicresponsibility to ensure the safereturnofmigrantworkers to theirnativeplaces.Migrantworkers arenot supplicants; they are India’scitizens, entitled to its resources.Thegovernment sparednoexpense tofly home Indians strandedabroad. Itseems tohave forsakenmigrantworkers anddevelopedacertainmental resistance to their needlessdeaths.The100million-strongmigrantworkers formaconsiderablepart of the country’sworkforce.Theyearnwagesbyworking in theconstruction industry, factories, andfarms.They are unorganised, informaleconomyworkers, lacking unionsororganisations tovoice theirgrievancesor fight for their rights.The imageofseveralmigrantworkersemerging fromacementmixer stillhaunts us.Thenever-endingmigranttragedies reflect adearthof truedeshbhakti.There is no actmorepatriotic than caring formigrantworkers andothers in untoldmisery.—G David Milton, Maruthancode

Advocates of globalisation should focus onfindingways tomanage an orderly andgradual process of partial deglobalisation

LETTERSTOTHE EDITOR

Howpotent is India’seconomic vaccine?

Navigating deglobalisation

Lockdown4.0 signals apragmatic shift

Centre didwell to leave red-orange-green zoning to states,the lattermust nowbridge the gaps in theirCovid response

Free up online education

AppINCENTIVESNow that Aarogya Setu is nomoremandatory,

governmentmust offermore features to boost usage

THELOCKDOWN4.0guidelinesshowthattheCentreismovingtowardamorepragmaticanti-Covid-19strategy.Insteadofdecidingonwhatgetsclassifiedasared,orangeorgreenzoneitself,theCentrehasleftthistothestategovernments,whichmustgivedueconsiderationtotheparameters

laiddownbytheministryofhealth and familywelfare.Tobe sure,the earlier lock-downs helped the countrybuy crucial time to put in place somehealthcare infra-structurebydelayingthepeak.And,givenhowtheinfectioncurveisgrowing—therewere600casesatthestartofthefirstlockdownonMarch25,and42,000attheendof the second lockdown; at the end of the third lockdown, the cases stood at over95,000—liftingthe lockdowncompletelywouldhavebeendisastrous.At thesametime,however,thelockdownhasimposedpunishingeconomiccosts.Indeed,aschiefministers seemtohave indicated in theirmeetingwith theprimeminister,a lock-downwiththeearlierbenchmarksforclassifyingred,amber,andgreenzoneswouldhavemeantworse economic pain.As research byAxis Bank shows,53%of India’sGDPwas fromtheareasclassifiedas redzoneundertheearlierbenchmarkingsys-tem.Tothatend,allowingstatestotakethecallonhowtoclassifyzoneswithatten-dantrestrictionsisagoodmove.Forinstance,ifaDelhiisallowedtolabelonlyacon-tainment zone or a buffer area around it as a red zone, it can better monitormovement inthearea,aswellasconductmoreeffectivecontact tracing.

But, for lockdown4.0 to bemeaningful, there has to be a slewofmeasures thatstatestaketoensurethateconomicactivitydoesn’theadintoanothershutdownafterabriefperiodofresumptionduetooutbreaksthatcan’tbecontrolledotherwise.WhiletheDelhigovernmenthaswelcomedtheCentre’sguidelinesandhasallowedmanyservicestoresume,CMArvindKejriwalhastobearinmindthatevenasmallmisstepcould blowup into anunmanageable crisis.During the first lockdown,casesweredoublinginnearly4days,whilebytheendofthesecondone,thishadrisento13days.Atendofthethirdlockdown—certainrestrictionswereliftedinthisperiod—thedou-blingperiodhasworryinglyslippedto12days.ThiscanbecomealotworseifDelhi—andthisholdsforallstates—doesn’tmoveaggressivelyontesting,identifyingcases,isolation,andcontacttracing.Indeed,evenifthedoublingperiodfallsto,say,10days,andstaysatthat level,Delhiwouldhavenearly1.98lakhcasesbytheendofJune.

Itisimperativethatstatesmountthemostrigorousanti-Covid-19responsethattheycan.Thismeans theycan’t simplytryto sidestepcountingCovid19deathsbyfocusingonco-morbiditiesasaseparatecategory,or,asDelhihasdone,tostoptest-ingthedeadforCovid-19,eventhoughbodieswillbereleasedasCovid19deathsifdoctors are reasonably satisfied that infection could be suspected.While this hasbeendonetocurbpressurefromfamilymemberstotestapersonwhodiesathome,thefactisthatthiswillhaveasignificantbearingoneffectivecontacttracing,espe-ciallywith Covid-19 increasingly getting associatedwith a number of symptomsthatoverlapwithotherdiseases.Whiletestingmaynotbetheperfectanswer,thereisnoignoringthefactthatmanystateshaveidentifiedmorecasesastheyexpandedtesting.Apart from this,statesmust provide real timeupdates onCovid19hospi-talisationcapacity(numberofisolation,ICU,ventilatorsfree,etc)aswellasonCovid19 preventive gear, like N95masks and PPEs for doctors,preferably on a publiclyavailable dashboard.Such information is crucial for dynamic policy decisions,aswellasgivingthepublic thetruepictureof thepandemic inthestate.

THE HOMEAFFAIRSministry’s latest guidelines for lockdown 4.0makeitclearthattheAarogyaSetuappisnotmandatory,thoughtheydoleavetheroomforlocalauthoritiesto“advise”(possibly,makemandatory)theuseoftheappbythemasses.Earlier,ithadbeenmademandatoryforcon-

tainmentzones,andpublicsectorandprivatesectoremployees.Giventheroletheapp can play in anti-Covid 19 efforts—data from the appwas used to flag 300emerginghotspots in the country—thegovernment should findawayto encour-ageitsusebypeople.Withthecontacttracingitenablesandtheinformationitpro-videsusersontheriskof infectioninacertainarea,smartphoneusersshouldany-way be downloading this to ensure their own safety.However, the governmentshouldperhapsincorporatemorefeatures,sothatevenifit isnotmandatory,thereare incentives forpeople todownload it.

Theapp,forinstance,couldallowteleconsultationwithdoctorsonCovid19andotherillnesses,or,forthatmatter,allowallowacashbackincentiveeachtimesome-oneregistersontheplatformandcarriesoutaself-assessment—cashbacks workedwell fordigitalpaymentsadoption.It is alreadybeingusedasane-pass fordriverswith logistics concerns,whynot expand this to other travel aswell? Perhaps, theplatformcanbeupdated to allowbookingofCovid19 tests basedoncontact-riska user gleans from the app data, apart from enabling the user to access their testresultsontheapp.Byofferingsuchafeature,theCentrewillnotonlyensuremoredownloads but alsomore people reporting for testing.It can also upgrade its fea-turesbyenablingmapfacilitiesandhighlightinghotspots.Itmustaddressprivacyconcernswhilemaking theappmore than justaCovid19tracking tool.

Whyallow just 100universities to offer online education?

HADTHEREBEENafacilitativeregulatorystructureinIndia,higheredu-cationwouldhavebeenCovid19-ready,withflourishingonlineeduca-tion.Instead,thepandemichasunderscoredmissedopportunities,evenas it itself presents anopportunitytoeaseofferingofonlineeducation

byuniversities.The higher education regulator,UniversityGrants Commission(UGC),hadbannedonlinecoursesbyuniversitiesin2015,beforeitallowedthesein2018—butonlyforthetop-100universities,withaNAACgradingof3.26andabove.Notjustthis,theuniversitieshadtogetlicencesforonlineeducation,and,thankstothe regulatory sclerosis, just seven have received these so far.Meanwhile,compa-nies likeCoursera,Udemy,edX,whichofferallmannerofcoursesfromforeignuni-versities,havewitnessed an increase in Indian registrations.Against such a back-drop, the government allowing the top 100 universities in India to start onlinecoursesfromMay30intheautomaticrouteisasignificantstepforward.But,thefactis, this still leaves out 90%of India’s over 900 universities,where students areenrolled forregularclasses thatare likelyto remainsuspendedfora lengthof timethat is hard to predict. It is hard to understandwhy the government believes thatuniversitiesgoodenoughtoteachstudents inclassroomsmaynotbegoodenoughtoteachstudentsonline.If standardsare thecriteria foronlineteaching,shouldn’tthe same standards—or the lack of them—affect teaching in regular classrooms?Read against the fact thatmore than 1 lakh students have registered for onlinecoursesbyforeignuniversities since the lockdown,theglacialpaceatwhichpolicyhasmovedononlineeducationseemscriminal.

Evenwithautomaticapproval,the100topuniversitiesstillhavetocomplywithUGCnormson infrastructureandappointpersonnel foronlineeducation; so,it isnot clearhowmanywouldbe inaposition to roll outonlinecourses fromMay30.

Theeducationsectorhasbeensufferingfromchronicallypoorpolicy,andthereseemstobe little thoughtpaid tocourse correction.For instance,thegovernmenthasannouncedthelaunchof12channelsforteachingclass1-12studentsinareasthathaveverypoorinternetconnectivity.Giventhegovernment’spastexperiencewith teaching-content for television has been less than encouraging, it is hard tounderstandwhyitisn’tpartneringwithaByju’s—whichsaw6millionnewstudentregistrations during the lockdown—or a similar education content generator todeliverthis.Afterall,itsexperiencewithdigitalpaymentsshouldhaverevealedthepotential that canbeunlockedbymakingspace fortheprivate sector.

●Write to us at [email protected]

Opinion

Extent of support tokey stakeholders

What's contributing to thefiscal slippage? (% of GDP)

(% of GDP)

2.01.81.61.41.21.00.80.60.40.20.0

3.5

3.5

-1.3

0.8

0.5

FY21 final fiscal deficit

Fiscal package 1.0+2.1

Fiscal deficit (ex-stimulus)

Expenditure saving

MSMEs Vulnerable Shadowbanks

Farmers

Fiscal deficit (growth impact)

Revenue shortfall

Growth downgrade impact

Original fiscal deficitFiscal impact

Contingent liability(Central govt)

Non-fiscal benefits

7.5

6.2

7.0

0.07

0.54

0.2

0.031

.51

0.62

0.18

1.97

0.28

Source: CEIC, Ministry of Finance and Nomura Global Economics

Ahmedabad

RNI No. GUJENG/2006/22183 Printed and published byHareshkumar K Bhagdev on behalf ofM/s The Indian Express Private Limited and printed at Bhaskar Print Planet, SurveyNo. 148P, Changodar-Bavla Highway, Tal. Sanand, Dist. Ahmedabad and published at 3rd Floor, SambhavHouse, Bodakdev, Ahmedabad-380 015. Phone (Board) : 26872481-82-83, Fax: 079-26873950.

Chairman of the Board - Viveck Goenka,Managing Editor - Sunil Jain, Editor (Ahmedabad): Jyotsna Bhatnagar* (*Responsible for selection of news under the PRBAct ) © Copyright: The Indian Express Private Limited. All rights reserved. Reproduction in anymanner, electronic or otherwise, inwhole or in part, without priorwritten permission is prohibited. The Financial Express®

AVIRUS THATHAS connectedthe world as no other is alsoresponsible for increasinglyinward-lookingpolicies.Overthe comingmonths, India, as

is thecasewithmanyothercountries,willbe confrontedwith crucial policy choicesin achieving ‘atmanirbharta’, or self-resilience and self-reliance,while at thesametimenotgiving intoprotectionism.Indoingso,whilesomerulesof trademayhavetoberewritten,it isalsoimportanttoupholdexistingrightsandobligations.Asanoriginalmultilateralistandafoundingmember of the GATTand theWTO, Indiahas a crucial role to play in ensuring thatCovid-19doesnotrendertheWTOanditsframeworkof rules redundant.

The WTO’s dispute settlement sys-tem—oftenreferredtoasitscrownjewel—has been rendered dysfunctional sinceDecember 11,2019,as a result of the USblocking the appointment of any newmemberstotheWTO’sstandingAppellateBody.OnApril 30,2020,a groupofmem-bers comprising of the European Union(including its 27members), and 18 othercountries—Australia, Brazil, Canada,China, Chile, Colombia, Costa Rica,Guatemala,Hong Kong (China), Iceland,Mexico,New Zealand,Norway, Pakistan,Singapore, Switzerland, Ukraine andUruguay—submittedtotheWTOaMulti-PartyInterimAppealArbitrationArrange-ment Pursuant to Article 25 of the DSU.TheMPIAbrings temporary relief to thecrisisat theWTOcausedbytheabsenceofanAppellate Body. India has so far stayedawayfromtheMPIA.This article argues itcannotafford tohoveronthesidelines.

TheMPIAsignatorieshaveemphasisedin their Statement to theWTO that theMPIA is a ‘contingencymeasure’whosepurpose is to“preserve theessential prin-

ciplesandfeaturesoftheWTOdisputeset-tlementsystemwhich include itsbindingcharacter and two levels of adjudicationthrough an independent and impartialappellate review of panel reports, andtherebytopreservetheirrightsandoblig-ations under theWTOAgreement.”Thereasonwhy this ‘interim’mechanism is asignificantdevelopment lies in theroleof‘appellate review’ in theWTO’s disputesettlement system.Central to this systemis two-tier resolution of trade disputes—first thehearingof disputes bya speciallyconstituted ad hoc ‘panel’ comprising ofthreemembers,andnextanappellatelevelforappealsonquestionsoflaw.Therulingsby aWTO panel or that of the AppellateBody(insituationswherepanelrulingsareappealed) have to be necessarily adoptedbyWTOmembers (through the DisputeSettlementBody,ortheDSB),andcanonlybe rejected by‘reverse’ or ‘negative’ con-

sensus—meaning for a ruling to remainunadopted,all of the164membersof theWTOhave to reject the same. In a span of24years (1995-2018),595disputes havebeen initiated at theWTO.While severaldisputes were settled bymutual settle-ment,WTOmembersadoptedcloseto400reports (ranging from original panelreports, to appellate body reports, andreportsofthecompliancepanel).TheUS’scriticism of theAppellate Bodyprimarilystemmed from a fewofAppellate Body’srulingsagainst theUS.

TheWTOagreements and the disputesettlementmechanism are not withoutflaws.However, they represent one of themost effective instruments of interna-tional lawenforcement.Finding a resolu-tion to theAppellate Body crisis is, there-fore,ofcrucialimportance.ProfessorPeterVan den Bossche, formermember of theAppellate Body, in his farewell speech in

May2019succinctlyexplainedthat:“Onecanpredictwithconfidencethat,oncetheAppellate Body is paralysed, the losingpartywill inmost cases appeal the panelreportandthuspreventit frombecominglegallybinding.WhywouldWTOmembersstill engage in panel proceedings if panelreportsarelikelytoremainunadoptedandthus not legally binding? As from 11December 2019, it is therefore not onlyappellate reviewbut also the entireWTOdispute settlement system that will nolonger be fully operational andmaypro-gressivelyshutdown.”

This is where the EU-led MPIA has avaluable role to play. India is facedwithseveral sensitivedisputes,andperhaps itsshort-terminterest is tohaveastatusquopositionthatwouldensurethatnoadverserulingfromaWTOpanelwouldneedtobeimplemented through legislative reform.Since the WTO’s DSU has not been

amended, the ‘right to appeal’, though onpaper only, can be used as a reason to notimplementanyrulings.Forinstance,Indiahas taken a view that it need not imple-mentarecentadversepanelrulingagainstits export subsidies, since an appeal hasbeenfiledagainstthepaneldecision.Sim-ilarly, India is facedwith several sensitivedisputes, including against its sugar sub-sidies (againstwhich disputes have beeninitiated by Australia, Brazil andGuatemala),and its tariffs on ITproducts(againstwhich the EU andChineseTaipeihave both asked for panels to be estab-lished). India is also a complainant in twopendingdisputesagainst theUS,and is atthereceivingendofUSWTO-inconsistentwithdrawal of its developing countrysta-tus for the purposes of GSP, aswell as intrade remedyactions.

WithmostofIndia’scurrentlypendingdisputesbeingagainst theUS,anMPIAto

which theUS isnotapartyhas littlevaluefor the effective resolution of those dis-putes.Ontheotherhand,severaldisputesagainst Indiahavebeen initiatedbyothercountries (such as the sugar and IT sectordisputes). Not being party to the MPIAwouldessentiallynegatethepossibilityforany effective dispute resolution in theabsenceofanappellateprocess.

This limitedstrategicadvantage,how-ever,is of littlevalue.

Instead, India needs to have a look atthe larger picture.Themost obvious fall-out of a dysfunctionalWTO dispute set-tlementwillbeincreasinguseofunilateralmeasures. It is not in the interest of Indiaoranyothercountrytobefacedwithsuchan eventuality.Theworld, today, is in themidst of apandemicandeconomic crisis,and also onewhere countries are increas-inglyimplementingtraderestrictivemea-sures.Toensurethatthisdoesnotresult inanarchy,therulesrelatingtotradeobliga-tions and use of the exceptions to traderules to address the pandemic need to beconsideredinletterandspiritoftherules-based system.The relevance and need topreservetheWTOsystemisperhapsmuchmorecrucialnowthaneverbefore.

Acommonsenseapproachwouldbetobe part of the MPIA,while working outclearstrategies toaddressboththeAppel-late Body crisis aswell as other systemicissuesof theWTO.Inaworld that is inter-dependent,astrongsystemofmultilater-allyagreedrulesliesatthefoundationofastable and predictable system.And in aworld during and after Covid-19whereeconomic challenges seem inevitable,such ruleswill have an evenmore crucialrole toplay.

India needs to revisit its recalcitrance,and play a far more proactive role inaddressingWTOdisputesettlementcrisis.

OPINION 7FINANCIALEXPRESS


JAMALMECKLAI

The author is CEO,MecklaiFinancial.Views are personal

THE RUPEE HAS been above (stronger than) itsopeningall-timelowof76.77for14straighttrad-ingdays,and is alsoholdingabove the long-termsupportlinestartingfromthelowof68.45(hitinSeptember2013).Thechartshowsthatwhenever

therupeehassustainedabove its thenall-time lowformorethantwoweeks,ithasstayedfirmforquiteawhile longer.

Since2011,therehavebeensevenepisodesofsharprupeedeclinesandithasneverturnedlowerafterrecoveringfromthelowforsolong.Theshortestperiodofrupeestrengthfroman all-time lowwas 49 days (inDec 2011),and the shortestperiodwithinwhichitrevisitedthoselowswas109dayslater(again,waybackin2012).Ithasalsohadverylongperiodsofstrength(beforecrossingtheearlierlow)—aslongas2.5years(fromSep13toMar16).Whileweknowhistoryneverreallyrepeatsitself,readingthisdatabegsthequestion:Couldwebeentering intoaperiodofrupee‘strength’?

Onfundamentals,whicharetodayprimarilydrivenbythecoronavirus,there is little chance forsustainedstrengthany-whereintheworld,leastofallinIndia,wherethegovernment’seffortshavebeentragicallyinadequate,judgingfromthehor-rifyingcollateraldamagetomillionsofdailywageearners,andpeoplewhowereself-employedorhadjobsinsmallenterprises.

Ontheotherhand,andspeakingtechnically,theNDFmar-kethasquieteneddownsubstantially,withthe5-dayaverageof the spreadbetweenoff-shore andon-shoremarkets nearzero,whichwas its levelwhen the rupeewas steady.ThiswascertainlyatleastpartlydrivenbyRBI’ssurpriseinterventionintheNDFmarketonMay11,whenthespreadactuallychangeddirection—dollarswerehugelycheaperon-shore thanoff.Tobesure,thespreadhasclimbedalittlebitagainanditremainsto be seenwhetherRBIwillremain active off-shore tokeep‘speculative’sentimentincontrol.

Anothercurious issue isRBI’s reserves have risenquite dramatically (by$7.5billion)betweenend-Marchand earlyMay, despite FPIinflowsremainingnegativeduring the period (not ashugelyas inMarch,but stillnegative).Someof thiswasdue to the increase invalueofRBI’sgoldholdingsasalsoitsnon-dollarreserves(sincethedollarstrengthenedbyabout1%during this period).Still that leaves about$4billion thatRBIhasboughtinthemarket,preventingtherupeefromget-tingstronger; ithasalsobeensellingforward,perhapstopre-ventthepremiafromrisingtoohighundernegativesentiment.Despiteloweroilprices,tradedeficitishigher,withbothexportsand importsdownsharply; and inwardremittancesandout-flowsundertheLRSschemearebothdown.PerhapsRBI’spur-chasesreflectbunchedinvestmentinflows(Reliance?).

Onthedownside,rupeevolatilityisstillclimbing,althoughitseemstobeshowingsomesignsofapeak.Wewouldneedtoseeanotherweekorsoofasteadyrupeebeforewecouldthinkofplayingtherupeestrengthcarddefinitively.Ofcourse,asweallknow,marketsarestrangebeasts,andtryingtomakesenseofthemisafool’serrand—Ihavelearnedthroughlongexperi-ence that all the perfumes ofArabiawill never sweeten thesmell ofmarketviewsgonewrong.This iswhywealways rec-ommendaconservativeapproachtohedgingrisk,settingsen-sibleexpectations—tryingforthebighitisasurerecipefordis-aster.Youneedtosetmodesttargetsandhedgesystematically.

Ourhedgingmodelforimports(MHP-I),whichhasbeeninusefornearlyfiveyears,deliverswhataretomymindreason-ablygoodresults.Oneclient,whohasbeenusing it sinceSep-tember2017,has saved,on average,22 paise perdollar forexposuresmaturinguptoOctober2020,ascomparedtozerorisk(viz.,hedgingonDay1).Themodelisconservative,yetout-performedboth zero risk and100%risk (stayingunhedged,which,ofcourse,isneverrecommended).Whileitisn’tperfect—theratewasworse thanzeroriskasmuchas34%ofthetime(1 in3months)—thehedging structure ensures that‘losses’,whentheyoccur,aremodest,andgainsaremuchhigher.Themonthly funding costwas higher than 8.5%p.a.only fourtimes,whilethebestfundingcostwasnegative20%p.a.!

LikeIsaid,modesttargetsandreasonableperformancearethehallmarksofsustainableriskmanagement.

Respite for`?

Atmanirbharta

and theWTO

HERE’SAQUIZ.Whichcoun-tryhas thehighestnumberof Covid-19 deaths cur-rently?Noprizeforanswer-ing: the US. Which of the

threeNorthAmericancountriesisfaringbestindeathrates?Here,theprizewillgoto the correct answer onwhich statisticthequizmasterisusing.IfweusetheCaseFatality Rate (CFR),whichmany reportspublish, theUS (5.96) seems to be doingbetter than Canada (7.45) and Mexico(10.51). Before NAFTA’s Covid-19mor-talityprize isawardedtotheUS,itwillbeuseful to look at anothermortality indi-cator—of the recorded Covid-19 deathspermillionpopulation(DPM).Here,Mex-ico(35)faresfarbetterthanCanada(145)andtheUS(263),asreportedtillMay15,2020.IntermsofactualCovid-19deaths,that is theorderthat represents thereal-ity of death burdens. If you have somedoubts,lookatNicaragua,withahorrificCFR of 32 and a very reas-suring DPM of only 1 atpresent.

Tomakethedifferencesinthesetwomortalityindi-cators,weexaminedglobaldataof53countrieswhichhaveaCFRhigherthan theUS (see table). Some ofthem have higher popula-tion level mortality ratesthan the US,while severalhave much lower values.Why this discordance andwhy are two measuresneededanyway?

CFR measures thedeaths among those diag-nosed to have the disease, bywhateverclinicalorlabtestcriteriausedtodefineacase. It estimates the severity of the dis-easeintermsofitslethaleffectsandvariesbetweendiseases.Forexample,EbolaandMERS haveveryhigh CFRs compared toCovid-19orcommonflu.CFRalsovaries,at thesametime,betweendifferentpop-ulation groups.For example, the elderlyand persons with co-morbidities havehigherCFRthantheyoung.DifferencesinCFRhave been noted betweenmen andwomen inEuropeandbetweendifferentracial groups in the US.Different treat-ments and competencies of healthcaresystems,too,canyield different CFRs forthesamedisease.

DPMmeasures the extent to whichthediseasehas causeddeaths across thewholepopulation,at anygiven time.It isa functionof the spreadof the infection,the severity of illness, and the compre-hensiveness and competence of theresponsewhich combinesboth contain-mentandcare.AdiseasewithahighCFRcan still be limited to a lowDPMif it canbequicklycontainedandlocalised.Adis-easewithalowCFRcancumulativelykill

manyandhave a highDPM,if it spreadsfastandfar—asistrueofCovid-19,whencompared toEbola,MERSorSARS.

BothCFRandDPMaredependentonthe same numerator (recorded andascribed deaths). Problems of under-counted or misclassified deaths arecommon to both.Verbal autopsy tech-niquescanfill in thegaprelatedtodiag-nosis of out-of-hospital deaths. Thedenominator,however,differsbetweenthe two indicators. In CFR,the denomi-natorcanbelargeorsmalldependingontesting rates, but the case mix of diag-nosed cases can also vary according totesting criteria. Large-scale testingexpands the denominator and oftenadds more mild cases, as compared tolowlevels of testing,whichyielda smalldenominator often comprising themore severely ill cases who have beenprioritised for testing. Even if the casemix is similar, increased case detectionexpands the denominator more thanthe numerator, since only a small frac-tion of the additionally detected caseswould die. Though the numerator isfixed, large-scale testing yields a lowerCFR than limited testingwhichyields ahigh CFR, for these reasons. ManyCovid-19 infected personsmay remainasymptomaticandhenceuntested,giv-ing lower than accurate denominatorandhencehigher than accurateCFR.Astesting is restricted inthe initial stageofthenewepidemic,wegetahighnumberfor CFR but as testing ramps up tohigher levels, CFR has a lower number.Comparing countries on CFR,withouttaking variations in testing rates andtesting criteria,canbeverymisleading.

The denominator for DPM is fixedandisnotvariable.It is thepopulationofthewhole country inmillions.So,unlikeCFR,whichhasvariabilityinbothnumer-ator and denominator, DPM is a morestable measure of Covid-19 deaths asexperiencedacrossthewholepopulation(exposed and unexposed). DPM willincrease over time, as the epidemicadvances, asmore persons get exposedandsomeofthemdie.However,itisatrue

measure of disease-relatedmortalityinthewholepop-ulation. It is this figureweneed to track and contain,aswemove furtheron.

CFR and DPM havegreatdiscordancewhenthetesting rates are low, butevenwhentestingratesarehightheydonotrelatewell.Do we need to test muchmore just to push CFRdown?That is not rational,whenCFR is not correlatedtoabsolutemortalityinthepopulation.Testing crite-ria, especially in resourceconstrained health sys-

tems, have to optimally use the testingkits available without being singularlyfocused on testing numbers. It is perti-nent to cite a recent statement fromtheCovid-19GroupattheImperialCollege,UK: “Testing is essential for pandemicsurveillance but its direct contributionto the prevention of transmission islikely to be limited to patients, HCWs(healthcareworkers)andotherhigh-riskgroups.” Testing has to be guided andaided by symptom-based syndromicsurveillance.Containment also calls forothermeasures likephysicaldistancing,masks andhandhygiene.

Weneeda slewofpublic healthmea-sures to contain Covid-19 and keep thetotal deaths in our population low evenas the count of cases rises.A DPM of 2indicateswearedoingwellsofar.Cantherate of rise be kept slow even after thelockdownends?Weneedasmuchagilityinourpublic health interventions as thevirus has exhibited in its spread, and asmuchability in ourclinical care systemsas the virus has displayed in striking atmultiple locations in the body.Perhapsevenmore.

Comparingcountries on

Covid-19deaths

We need a slew of public healthmeasures to

contain Covid-19 and keep the total deaths in our

population low even as the count of cases rises

Authors arewith the Public Health Foundationof India (PHFI).Views are personal

CFRmeasuresdeaths among

those diagnosed tohave the disease;DPMmeasures theextent towhich thedisease has causeddeaths across thewhole population,at any given time

K SRINATHREDDY& SURABHI PANDEY

ILLUSTRATION: ROHNITPHORE

The author is partner, Clarus LawAssociates, Delhi, andspecialises in international economic lawandpolicy

RVANURADHA

India needs to play a farmore

proactive role in addressing the

WTO dispute settlement crisis

CFR Per million population

Country (%) Deaths Tests

US 5.96 263 32,166

Iran 5.98 82 7,678

Switzerland 6.15 217 37,954

Curaçao 6.25 6 2,372

Syria 6.25 0.2 NA

Ireland 6.32 305 52,491

San Marino 6.33 1,209 97,282

Sierra Leone 6.37 3 NA

Andorra 6.44 634 21,657

Romania 6.48 55 14,866

Indonesia 6.52 4 636

Burkina Faso 6.60 2 NA

Philippines 6.67 7 1,732

Burundi 6.67 0.08 24

Brazil 6.89 66 3,462

Trinidad & Tobago 6.90 6 1,841

Isle of Man 6.93 271 46,755

Slovenia 7.04 50 32,074

Haiti 7.33 2 132

Bermuda 7.38 144 75,290

Martinique 7.41 37 NA

Canada 7.45 145 31,019

Ecuador 7.67 133 5,050

Saint Martin 7.69 78 NA

Channel Islands 7.83 248 30,762

Algeria 8.21 12 149

Barbados 8.24 24 12,111

CFR` Per million population

Country (%) Deaths Tests

Turks & Caicos 8.33 26 2,820

Guadeloupe 8.39 32 NA

Guyana 8.85 13 1,338

Montserrat 9.09 200 7,212

Comoros 9.09 1 NA

Liberia 9.30 4 NA

Mauritania 10.00 0.4 435

Suriname 10.00 2 689

Spain 10.02 584 52,784

Mexico 10.51 35 1,211

Zimbabwe 10.81 0.3 2,432

Belize 11.11 5 2,630

Bahamas 11.46 28 4,328

Chad 11.53 3 NA

Antigua & Barbuda12.00 31 1,871

Sweden 12.35 350 17,590

British VirginIslands 12.50 33 5,529

Netherlands 12.86 326 16,508

Hungary 12.94 46 13,167

Italy 14.06 519 46,426

Yemen 14.12 0.4 4

UK 14.42 495 32,713

France 15.33 420 21,219

Belgium 16.40 769 53,839

Sint Maarten 19.74 350 7,685

Nicaragua 32.00 1 NA

Countries that have CFR higher than the US’s

CFR: Case Fatality Rate; Source:Worldometers Coronavirus Pandemic Data (until May 15, 2020)

`/$ (Jan 2011 to date)(inverted scale)

-80

-75

-70

-65

-60

-55

-50

-45

-40

Medicalworkers in protective clothingmove the body of a deceased patient, in Brooklyn, NewYork, US BLOOMBEERG

Ahmedabad

RIVERS FLOW DOWNHILL, which inmuch of Asia means they start on theTibetan plateau before cascading away tothe east, west and south. Those steepdescents provide the ideal setting forhydropowerprojects.AndsinceTibetispartofChina,Chineseengineershavebeenmak-ing themost of that potential.TheyhavebuiltbigdamsnotonlyonriversliketheYel-lowandtheYangzi,whichflowacrossChinato the Pacific,but also on others, like theBrahmaputraandtheMekong,whichpassthrough several more countries on theirwaytothesea.

Chinahaseveryrighttodoso.Countries

luckyenough to control the sources of bigrivers often make use of the water forhydropoweror irrigation before it sloshesaway across a border. Their neighboursdownstream,however,arenaturallytwitchy.If the countriesnearest the source suckuptoomuchoftheflow,orevensimplystopsiltflowingdownorfishswimmingupbybuild-ing dams, the consequences in the lowerreaches of the river can be grim: parchedcrops,collapsedfisheries,saltyfarmland.Inthebestcases,thevariousripariancountriessign treaties setting out howmuchwatereachwillguaranteetothenext.Intheworst,bickering over the flow is a source of con-stanttensionandrecrimination.

Tension and recrimination have beentheorderofthedayforChinaanditsneigh-bours, alas. In part, this is because a riverlike theMekongdoes not contain enoughwater to go round.Chinahas alreadybuilt11damsacrossthemainriver(neverminditstributaries)andhasplansforeightmore;

thedownstreamstateshavebuilt twoandarecontemplatingsevenmore.

Lastyear,duringadrought,theriverranso lowthatCambodiahad to turnoff abighydropower plant. Evenwhen rainfall is

normal, the altered flowand diminishedsiltation are causing saltwater to intrudeintotheMekongdelta,which is thebread-basket ofVietnam,and depleting the fishstocksthatprovidetheonlyproteinformil-

lionsofpoorCambodians.Chinahaslongresistedanyformalcom-

mitmenttocurbitsconstructionofdamsortoguaranteedownstreamcountriesamin-imumallocation ofwater. Itwill not evenjointheMekongRiverCommission,abodyintended tohelp ripariancountries resolvewater-sharingdisputes.Theproblemisnotjust that China gets huffyabout anythingthatcouldbeconstruedasforeigninterfer-enceinits“internalaffairs”.

The country’s leaders are also mes-merisedbybigengineeringprojectsandsel-domshowmuchconcernforthepeopledis-placedordisadvantagedbythem,evenwhenthevictimsaretheirfellowcitizens.

SokeenisChinaonbigdams,infact,thatit is helping Pakistan build several on theIndus—a river too small and remote in itsChinesereachestobeworthdamming—andis trying to persuadeMyanmar to build ahuge barrage across the Irrawaddy,whosetributariesflowthroughChinaforjustatan-

talisingcoupleofkilometres.But even if China’s rulers cannot over-

cometheirengineeringfetish,theycoulddoplentymore to reassure theirneighbours.Sharingdataonwaterlevelsroutinely,with-outinterruption,wouldbeagoodstart.

During a rowoverapoorlydemarcatedsectionoftheirsharedborderin2017,Chinastoppedproviding Indiawith informationabout the flowof theBrahmaputra that isused toprovide floodwarnings tovillagersdownstream.It took a summit of the twocountries’ leaders to get the informationflowingagain.

By the same token,downstreamcoun-tries would love to know when Chinesehydropower plants plan to retain or dis-chargewater,to allowfarmers and fisher-men in the lower reaches time to prepare.AnditwouldnothurtChinatoundertaketoalleviate droughtswhen it can.Thatwouldsendafloodofgratitudeflowinguphill.¦

©TheEconomistNewspaperLimited

● LOSING STREAK

BLOOMBERGMay 18

SOFTBANK SAID ITS Vision Fund busi-nesslost1.9trillionyen($17.7billion)lastfiscalyearafterwritingdown thevalueofinvestments,includingWeWorkandUberTechnologies Inc.

Thecompanypostedanoveralloperat-ing loss of 1.36 trillion yen in the 12months ended March and a net loss of961.6billionyen,accordingtoastatementonMonday.TheTokyo-basedconglomer-ate released figures in two preliminaryearnings statements last month. Thelossesare theworst ever in thecompany’s39-yearhistory.

SoftBank founder Masayoshi Son’s$100 billionVision Fundwent from thegroup’smain contributor to profit a yearago to its biggest dragonearnings.Uber’sdisappointing public debut lastMaywasfollowed by the implosion ofWeWork inSeptember and its subsequent rescue bySoftBank.NowSon is strugglingwith theimpactofthecoronavirusontheportfolioof startupsweighted heavily toward thesharingeconomy.

“Thesituationisexceedinglydifficult,”SonsaidatabriefingdiscussingtheresultsonMonday.“Ourunicornshavefallenintothis suddencoronavirus ravine.But someof themwilluse this crisis togrowwings.”

The drop in Uber’s share price wasresponsibleforabout$5.2billionofVisionFund’s losses intheperiod,whileWeWork

contributed$4.6billionandanother$7.5billioncamefromtherestoftheportfolio,SoftBank said.The $75 billion theVisionFundhas spent to invest in88companiesasofMarch31isnowworth$69.6billion.

SoftBank also recorded losses from itsown investments, includingWeWork andsatelliteoperatorOneWeb,whichfiled forbankruptcyinMarch.

Last year, afterWeWork’s effort to gopublic fell apart, SoftBank stepped in toorganize a bailout and put its own chiefoperating officer, Marcelo Claure, inchargeofturningaroundthebusiness.Butthe pandemic has hammered its opera-tions asworkers shyawayfromgatheringinsharedoffice spaces.

WeWork’svaluationisnow$2.9billion,downmore than90%fromitspeak.Soft-Bank has investedmore than $10 billion

in thecompany.Son’s investments in hotel-booking

service Oyo Hotels & Homes and Uber,among the biggest in his portfolio, havealso faredpoorly.

Oyo,inwhichSoftBankinvestedabout$1.5 billion, last month furloughedemployees in countries outside its homemarket of India as it struggles to survivethe virus.Uber’s shares are trading about28%belowits IPOprice.

As the concerns about investmentsmounted, Son respondedwith two sharebuybacks in rapid succession.

The first 500 billion yen repurchaseannounced inmid-March initially failedto lift SoftBank’s stock.When the sharesplungedmore than30%in theweek thatfollowed, Son unveiled a 2 trillion yenfollow-up.

REUTERSGeneva, May 18

CHINA'SPRESIDENTCALLEDonMondayfor an independent review of the globalresponse to the coronavirus pandemicundertheWorldHealthOrganizationoncethe virus is under control, and defendedBeijing’sownhandlingof thepandemic.

Inavideomessagetoavirtualmeetingof theWHO’s decision-making body, theWorld HealthAssembly,President Xi Jin-pingalsopledged$2billionovertwoyearstohelpwith theCovid-19response.

During the two-daymeeting, healthministers from around the world areexpected toback calls foran independentevaluation of the WHO’s performance,criticism of which has been led by USPresidentDonaldTrump.

Themeetingcouldalsobedominatedbytension between China and the UnitedStates, which fiercely criticised Beijing’sresponseintheearlystagesofthepandemic.

Callingthepandemic“themostseriousglobal public health emergency since the

end ofWorldWarTwo”,Xi said: “All alongwe have actedwith openness and trans-parencyandresponsibility.”

“We have turned the tide on thevirus,”hesaid.TheWorldHealthAssemblyis expected to discuss a resolution beingpresented by the European Union thatcalls foran independentevaluationof theWHO's performance under its director-general,TedrosAdhanomGhebreyesus.

Names on a draft resolution seen byReuters showed support from116 of the194countries in theWHO.

UN Secretary-GeneralAntonioGuter-rescalledtheWHO“irreplaceable”andsaiditneededgreaterresourcestoprovidesup-port fordevelopingcountries.

SwissPresidentSimonettaSommarugapledged her country’s “full support andcooperation”toTedrosastheWHOcoordi-nates the global response to the coron-aviruspandemic.

The WHO and most experts say thevirusisbelievedtohaveemergedinamar-ket sellingwildlife in the central city ofWuhan late lastyear.

Over100m inChinaface renewed lockdown

CEOMasayoshi Son isstrugglingwith the impactof the coronavirus on theportfolio of startupsweighted heavily towardsthe sharing economy

Apple to reopen 25more US stores, eyes100worldwideAPPLEWILLTHISweekreopenmorethan25of itsbrandedstores in theUnitedStates,thecompanysaidonSunday,continuingagradualprocessthathasunlockeddoorsatnearlyafifthof itsworldwide retail outlets.Thestoreswill imposesocial-distancing rules,limitoccupancyandsomewill offeronlycurbsideorstorefront service.

Fentanylhaul seized inAsia’sbiggestdrugsbustMYANMARPOLICESAYtheyhaveseizedahugehaulof liquid fentanyl,the first timeoneof thedangeroussyntheticopioids thathave ravagedNorthAmericahasbeenfound inAsia'sGoldenTriangledrug-producingregion.More than3,700litresofmethylfentanylwasdiscoveredbyanti-narcoticspolicenearLoikanvillage inShanState innortheastMyanmar.

Microsoft’sMinecraftgets lockdownboostMINECRAFT,THEVIRTUALworldgameMicrosoft acquired in2015,isseeingaboominplayas theCovid-19pandemic shutters schoolsand leaveskids stuckathome.ThenumberofnewinstallationsofMinecraft acrossvariousplatformsrose25%inAprilfromMarch,Microsoft said.

Quick

View

Japanbraces forworst postwareconomic slump,tips into recession

InternationalFINANCIALEXPRESS8 WWW.FINANCIALEXPRESS.COM


BLOOMBERGMay 18

SOME 108 MILLION people in China’snortheast region are being plunged backunder lockdown conditions as a newandgrowing cluster of infections causes abackslideinthenation’sreturntonormal.

Inanabruptreversalofthere-openingtakingplaceacrossthenation,citiesinJilinprovince have cut off trains and buses,shut schools and quarantined tens ofthousands of people.The strictmeasureshave dismayedmany residentswho hadthoughttheworstofthenation’sepidemicwasover.

People “are feeling more cautiousagain,”saidFanPai,whoworksatatradingcompany in Shenyang, a city in nearbyLiaoning province that’s also facingrenewed restrictions.“Children playingoutside are wearing masks again” andhealthcareworkersarewalkingaroundinprotective gear, she said.“It’s frustratingbecauseyoudon’tknowwhen itwill end.”

While the clusterof34 infections isn’tgrowingasquicklytheoutbreakinWuhanwhich started the global pandemic lastDecember, China’s swift and powerfulreaction reflects its fear of a secondwaveafter it curbed the virus’s spread at greateconomicandsocial cost.

It’s also a sign of how fragile the re-openingprocesswill be inChinaandelse-whereaseventheslightesthintofaresur-genceof infectionscouldpromptareturnto strict lockdown.

The government of Shulan, a city inJilin,saidonWeChatMondayitwouldputin place its strictestmeasures yet to con-tain the virus. Residential compoundswith confirmedorsuspected caseswill be

closedoff,withonlyonepersonfromeachfamilyallowedtoleavetopurchaseessen-tials fortwohourseverytwodays.

A sense of deja vu is permeating Jilincity, which underwent the same strictlockdown implemented inmost of Chinain February and March despite onlyreporting daily cases in the single digitsthen.Overall, Jilin province’s total casesstandat127;Hubeiprovincehad68,000.

Shen Jia, a Shenyang-based salesmanat a life sciences company, canceled athree-day business trip to Jilin city lastweekbecausehewouldhavebeenquaran-tined foras longas21daysonhis return.

SELECTIONSFROM

REUTERSTokyo, May 18

JAPAN’S ECONOMY SLIPPED intorecession for the first time in 4-1/2yearsin the last quarter, putting the nation oncourse for its deepest postwar slump asthe coronavirus crisis ravages businessesand consumers.

Monday’s first-quarter GDP dataunderlined the broadening impact of theoutbreak, with exports plunging themost since the devastating March 2011earthquake as global lockdowns andsupply chain disruptions hit shipmentsof Japanese goods.

The world’s third-largest economycontracted an annualised 3.4% in thefirst quarter, preliminary official GDPdata showed, less than a median marketforecast for a 4.6% drop. Analysts warnof an even bleaker picture for the currentquarter as consumption crumbled afterthe government in April requestedcitizens to stay home.

LEADERSWATER TORTURE

Its secrecymeans that farmers and fisherman indownstream countries cannot plan

IfChinawon’tbuild fewerdams, it could

at least share information

❝ ❝

MORETHAN EVERTedrosAdhanomGhebreyesus,WHO chief

Nowmore than ever,we need a healthierworld.Nowmore than ever,we need a saferworld. Nowmore than ever,we need a fairerworld. And nowmore than ever,we need a strongerWHO.There isno otherway forward but together

Fed chairman: Downturnmay last until late 2021

Moderna‘svaccine showspromise inearly study,shares soarREUTERSMay 18

MODERNASAID ONMonday its experi-mentalCovid-19vaccineshowedpromiseinasmallearly-stagetrial,withthevaccineproducing virus-neutralizing antibodiessimilartothatfoundinrecoveredpatients,sendingshares soaring25%.

The company’s vaccine is at the fore-front of the efforts in developing a treat-ment forthe fast-spreadingvirusand lastweek, won the US health agency’s “fasttrack” label to speed up the regulatoryreview.Moderna expects to start a largerlate-stage trial in July.

Therearecurrentlynoapprovedtreat-ment or vaccine for Covid-19, caused bythe new coronavirus, and experts predicta safe and effective vaccine could take12-18months to develop.Eight patientswhowereadministeredModerna’svaccinewerefoundtohaveantibodylevelssimilarto those in blood samples of peoplewhohave recovered fromCovid-19.

PRESSTRUSTOF INDIAMay 18

THE US ECONOMY, theworld’s largest,which has been thrown into a recessiondue to the coronavirus pandemic, willrebound but the recovery could stretchthrough the end of next year, FederalReserveChairmanJeromePowellhassaid.

His statement came days after a topeconomic advisor to President DonaldTrump favoured giving tax incentives toAmerican companies tomove theirman-ufacturing units from China to the US,amidst anewrift in thebilateral relation-ship overBeijing's handling of the coron-avirus crisis.

TheUShasexpresseddisappointmentover China's handling of the Covid-19which has claimed nearly 90,000 livesinAmerica.

China, which is the world’s secondlargest economy, in the beginning of theyear signed the Phase-1 of a trade dealwiththeUS,endingabittertwo-yeartariffwarthathadrattled theglobal economy.

FederalReserveChairmanPowell,dur-ing a “60 Minutes” programme on CBS

News onSunday,said that in the long runand even in themedium run, onewouldnot want to bet against the Americaneconomy.“Thiseconomywill recover.Andthat means people will go back towork.Unemploymentwill get back down.We'llget throughthis.Itmaytakeawhile.

NO END IN SIGHT

■Cities in Jilin province have cutoff trains and buses, shut schoolsand quarantined tens ofthousands of people

■China’s swift and powerfulreaction reflects its fear of asecondwave

■Overall, Jilin province’s totalcases stand at 127; Hubeiprovince had 68,000

❝ ❝

The situation is exceedinglydifficult... Our unicorns havefallen into this suddencoronavirus ravine. Butsome of themwill use thiscrisis to growwings

—MASAYOSHI SON, SOFTBANKCEO

SOFTBANK DOUBLEDTHE amountit plans to spend buying back sharesand announced changes to its board,including the resignation of long-timedirectorJackMa.

SoftbankGroupwillraise1.25tril-lion yen ($11.7 billion) usingAlibabastock to fund buybacks of its ownshares,ChiefExecutiveMasayoshiSonsaid onMonday.That’s on top of anequally sized repurchase it hadannouncedinmid-March.TheTokyo-based company also announced sev-eralchangestoitsboard,includingthedepartureofMa. —AGENCIES

SoftBankVisionFundposts$18bnlossonWeWork,Uber

Ma leaves boardas SoftBankplansbuybackusingAlibaba shares

❝ ❝

All alongwe have actedwith openness andtransparency andresponsibility.We haveturned the tide on the virus

—XI JINPING, CHINESE PRESDIENT

Powell says that in the long run andeven in the medium run, onewould

notwant to bet against theAmerican economy

Xipledges$2bn inCovid-19 fight,backs reviewofWHO’s response

Global cases pass

4.7millionDeaths exceed

315,600Recoveries

1.72million

MAPPINGTHEVIRUSChina reported seven newcoronavirus infections,withthree of them locallytransmitted cases in Jilinprovince and Shanghai,whilefour are imported cases inInner Mongolia. Total deathsin China rose to 4,634, afterthe National HealthCommission said on Sundaythat Jilin province revised itsfatality count by one

The UKmay have 19,000additional deaths fromCovid-19 thismonth as the countrybegins easing lockdownmeasures and an additional13,000 in June, placing it in aworse positionwhencomparedwith Germany,France and Switzerland,according to researchers atthe business school INSEAD

Iran reported 2,294 newcoronavirus cases onMonday,the largest daily increase inmore than sixweeks,according to Health Ministryfigures.The rise took theoverall tally to 122,492confirmed cases,withmorethan 7,000 deaths, KianushJahanpur, a spokesman fortheministry, said in atelevised statement

In Denmark, bankers and theirbosses have been so contentwith the quality of theworkthey do from home thatalmost one-third plan to

continue some form of theregime once the crisis is over,according to a survey

Germany hopes talkswith 10European Union partnersMondaywill make progresstoward lifting a global travelwarning and enabling citizensto takevacations thissummer, ForeignMinisterHeikoMaas said

Citigroup said itwill allow anadditional 600 staff to resumeworking from their Hong Kongpremises onWednesday afterthe city relaxed social-distancing curbs amid anoverall reduction in thenumber of new coronavirusinfections

Singapore is testing 30,000preschool staff in batchesfromMay 15-26 as thegovernment prepares for thereopening ofpreschools,according to amessage sentvia its gov.sgWhatsAppchannel. More than 6,000 staffhave already been swabbed

Pandemic shattersworld order, sowinganger andmistrust

US auto industryreturns to life afterlockdown

China faces angryworld seekingvirusanswers at keyWHOmeeting

Italy shops to reopen,but formany it’s too late

Germanyfaces 54%surge in insolvencies,according to study

England’s PremierLeagueplayers toresume training

Xi saysChinawillmake any vaccineuniversally available

Italy newcases dropto earlyMarch levels

Ahmedabad

IN LINEWITH its closest peer Siemens,ABB too struggledwith revenues,down20%y-o-y,andgavecautiouscommen-tary for Q2CY20. Negative operatingleverageand forex loss led toamere1%Ebitda margin. The silver lining is10% y-o-y growth in new orders(`19.5bn)drivenbymotion(+30%y-o-y , railways) and industrial automation(+10%y-o-y ,wind-led), despite a 45%y-o-y plunge in robotics (auto-led).

Keytakeaways fromcommentary:(i)Enhancedfocuson3Cs—customer/ser-vices,costoptimisationandcashflows—toadapt to thenewnormal; (ii)market con-solidation,infraboostandhigherlocalisa-tion are thekeyopportunities.We retainHoldwith revisedCY20/CY21eearnings(cutby23/14%)andTPof`900asweroll

forwardthevaluationtoMar’22(40xPEvs.42x earlier).We continue topreferSIEMoverABBgiven the latter’s betterscalabil-ityandgrowthpotential over two–threeyearsandwiderindustrycoverage.

Lowerrevenue and highercosts take atoll onPATDeferment of dispatches and lower ser-vices revenue (14% of revenue inQ1CY20versus 17%forCY19) draggedoverall revenue 18% y-o-y. This isbroadly in line with peers such asSiemens.ABB stated it missed revenuebooking of `3.2 bn during the quarter.

Negative operating leverage coupledwith higher other expenses and a forexloss(`350mn)depressedEbitdamargintomerely1%.Thecompanyrecordedanexceptionalgainof`570mnonthesaleof its solar inverterbusiness.

Focus on key segments and cost-opti-misationWhileABB factories arenowopeningup,the resumption of supply chain is key.Managementdoesnotexpectamajorrisktotheexistingorderbook,buttheywouldbewatchful of anydeferments/delays inacceptancesatcustomer-end.Inthenearterm, the focuswill clearly shift to seg-

ments that are expected to bounce backfaster—utilities,water,powergeneration,food & beverage, pharma & chemicals,datacentres,etc—withaconcurrentopti-misationof itscoststructure.

Outlook:AdaptingtochangesABB,inourview,wouldbeamongaselectfewtosail throughtheroughwaters,butits earnings growthwill depend on howkey segments such as transportation,energy, healthcare and infra pan out.Retain‘HOLD/SP’; it istradingat63/39xCY20/21eEPS.

EDELWEISS

KOTAK BANK REMAINS best placedacrossmetrics, in ourview,with a best-in-class liability franchise, prudentunderwriting, strong capital position,adequatemargin levers (100bp higherSA rate vs peers despite recent cut), andstrong currency to explore inorganicopportunities.Q4FY20resultswerealsomarginally positive with core PPOPgrowth of 14%y-o-y (5% ahead of ourexpectation) despiteweak loan growthof<7%y-o-y(<3%includingPrime).

Marginleversareyettoplayout(SAcutinApril) and should aidKotak to deliverbetterPPOPperformance(12-13%CAGRover FY20-22F) despite muted growthexpectations (7%/10% loan growth forFY21/22F). That said, bank will not beimmune to current cycle (170bp/130bpcredit cost expected forFY21F/22F) andROEs (post dilution) of 10-11% forFY21F/22Fleave limitedroomforanyre-rating,given richvaluations at 2.6x/28xFY22Fdilutedbook/EPS.Wehencemain-tainNeutral,whileweacknowledge it tobethebestplacedtoridethecycle–ourTP

implies 3x/28x FY22F BV/EPS. FasterrecoveryfromCOVID-19-relatedimpactsandgreater-than-anticipated asset qual-ity impact are the keyupside/downsideriskstoourTP.

Resulthighlights(i) Core PPOPgrew14%y-o-y,drivenbymarginal improvement inNIMs; (ii) lia-bility franchise remains best in class,with further improvement in fundingcost and ~`130 bn of savings account(SA)accretionaidingCASA%improvingto 56%; (iii) loan growth was muted

<7/3% for the Bank/Bank+Primewithgrowthmoderation in unsecured loans(cautious stance) and y-o-y contractionin CV/auto book; (iv) capital positionremainsstrongwithTier-1at+17%,andpost QIP (`78 bn built in) tier-1 willimprove to ~20%; (v) asset qualitywasstablewithq-o-qadjustingfor`6.6bnofstandstill accounts, ramped-up provi-sion cover (69%) and provided `6.5 bn(10%)onoverdue loans.

Managementcommentary(i) Will focus on strengthening balance

sheet,building strongdeposit franchiseand continue to grownon-credit linkedsubs;(ii)lendingapproachneedstochangegivenhigherriskinsectorswithhighfixedcosts/leverage,while governmentmea-sures around MSMEs is a big positive;(iii) management remains cautious onunsecuredloansandthinksCV/unsecuredretail is seeingelevatedpainandmorato-rium for retail is also higher thanoverall26%moratoriumfor thebank (lower forother lendingsubs),whilemoratoriuminSMEisdespite lowerworkingcapitalutil-isation (cautious approach); (iv) deposittractionisstrongdespiteSAratecut.

NOMURA

Company is best placedacross metrics thoughcurrent cycle will impactit; ‘Neutral’ maintainedas valuations are rich

23/14% cut in CY20/21eEPS; company expected toride out the storm; ‘Hold’retainedwith TP of `900

●ABB INDIARATING: HOLD

Lower revenues, coststook toll on bottomline

Investor● KOTAKMAHINDRABANK RATING: NEUTRAL

Amarginally positive performance inQ4Year-end FY20 FY21F FY22F FY23F

Mar 31 (`) Actual New New New

PPOP (mn) 100,208 116,085 123,920 133,321Reportednet profit (mn)59,469 57,878 69,241 82,516Normalisednet profit (mn) 59,469 57,878 69,241 82,516FDnormalised EPS 30.13 29.32 35.08 41.81FD norm. EPSgrowth (%) 18.2 -2.7 19.6 19.2FD normalisedP/E (x) 39.4 40.5 33.8 28.4Price/Adj.book (x) 4.7 3.8 3.4 3.1Price/Book (x) 4.6 3.8 3.4 3.1Dividend yield (%)0.2 0.1 0.2 0.2ROE (%) 13.0 10.4 10.6 11.4ROA (%) 1.8 1.6 1.8 1.9Source: Company data, Nomura estimates

CY20E CY21E

(` m) New % chg New % chg

Net revenue 60,944 (9.5) 70,309 (8.5)Ebtida 4,081 (22.3) 6,194 (17.2)Ebitda margin 6.7 — 8.8 —Adjusted profitafter tax 2,871 (23.2) 4,625 (14.2)Net profit margin 4.7 — 6.6 —Capex 1,400 0.0 1,600 0.0Source: Edelweiss research

Change in estimates

PersonalFinance

DEEPAK JASANI

RETAILINVESTORSHAVEwitnesseddras-ticerosionoftheirportfoliovalueaccumu-lated overyears for their long-term finan-cialgoals.Theyareunnervedbythismarketvolatility.Thisuncertaintyisnot limitedtoinvestors’community; leaders across theglobehave to take a tough call—the trade-offbetweenprotectinghealthandprotect-ing the economy. Life savings gettingeroded ina short spanof timecancomeasabig shock,but investors shouldnotpanicasall isnot lostunlessoneexitstheasset.

PostCovid-19,yourprioritiesshouldbetotryandreinstateyourincomelevelstotheearlierlevelsandreassessyourriskappetiteas per the current situation and makechanges to your investments as may berequiredasperthenewriskprofiletoenableyoutoreachyourfinancialgoalsontime.

Longer time-frameInvestorswhohavealongertimeframe

(twoyears ormore) to achieve their finan-cial goals are better-off and should notworrytoomuchaboutthiscorrection.Theyshouldcontinuetofollowtheirinvestmentandassetallocationstrategyasmarketswillrebound over time. Going overboard onequities to capitalise on the correction torecoupthelosses(investmentgoalamount)by large lumpsum investment is also notadvisable.A staggered approach over4-6months inqualitystocks/fundscanbe fol-lowed;butthattoowillbedependentontheliquidity situation—which needs to be re-assessedinsuchuncertaintimes.

Building on cash reserves/emergencyfunds is ideal given the knownunknownsinthecurrentsituation.Individualsshouldbearinmindallpossibilities—layoffs,pay-cuts,earlyretirement,etc.,before re-draw-ing their investment plan.Depending onhowmanyyears you have to your retire-ment,youmayeitherneed to scale downyour retirement corpus goal ordelayyourretirementbyafewyearsinordertoachievethe desired corpus.You should also revisityour existing life and disability insurancepoliciestodeterminewhethertheyaresuf-ficient tomeet yourneeds. Investorswhohave immediate needs can considerredeemingtheirdebtportiongraduallyandthenperhaps sell equityholdings.Butyouhave to ensure that debt-equityallocationisnotseverelydamaged.

Prioritising investment goalsTaking a short-term loan tomeet the

immediate investment goal; instead ofredeeming investment assets at such lowprices should also be considered.Prioritis-ingone’s investmentgoals and tradingoffshorter termgoals for long termgoals alsoneedstobeconsidered.Oneimportantles-son we have learn in this crisis is imple-mentingagradualexitstrategy—investorswhoneedacorpus in‘x’years shouldgrad-ually shift fromequities to debt (forpark-ing) a fewmonths before their remaininginvestment time-frame; bydoing so onewouldnotseemassiveportfoliodropdueto

suchuntimelyandunexpectedmarketcor-rections.Investors canuse the tools of sys-tematicwithdrawal or systematic transfermoreoftentotheiradvantage.

Overall,assetallocationanddiversifica-tion (within and among asset classes) arethe fundamental financial planning toolsthatyouneedtofollowdiligentlytoensuresomesafetynet insuchdownturns.Incasethere is a large shortfall in anyof the goalswhicharedue3-5yearsaway,thenyoucanrampupsavingsrateforafewquartersandtry to make good the shortfall, provided

yourincomesourcesremainunaffected.Investingovertheyears,one forgets to

adhere to the asset allocation set up ini-tially. If due to run-up inmarkets, equityallocation has increased from initiallyestablished 70% to 80%, the investorneeds to shift the excess 10% to debt orotherassetclass.Thesameshouldbeprac-ticedaftermarketcrashes;allocatingmoretoequitywouldbebeneficial at that time.Rebalancingandstrictlyadheringtoassetallocation should be practised once everysixmonths.

Whiletheseareunsettlingandchalleng-ingtimes,itisimportantthatwedon’treactoutoffear.Thedecisionsyoumaketodaywillimpactyour long-term financial planninggoals.Investorscouldgrabbetterreturnsinthenext fewmonths/quarters if theystayinvestedduringmarketfalloraddequity(viaSIP in quality stocks/funds for a fewmonths).Investors should innormal timesbepatientandcontinuetoremaininvested.

Havingsaidthat,theyshouldatregularintervals undertake due diligence andreviewtheirportfolio stocks,schemes andnow,evendebtpapers;rebalancetheirport-folio and adhere to their asset allocationstrategy.Amorecautiousinvestmentstrat-egy (capital protection) iswarranted in theshortterm;notonlytotackletheCovid-19shock but also for the second/third roundofeffectsafterthisstormpasses.

Thewriterishead,RetailResearch,HDFCsecurities

● INVESTMENTPLANNING IN MIDSTOFCOVID-19

THISYEAR,WHILEmaking their incometax declarations to employers for the pur-pose of tax deduction at source(TDS),tax-payers are facing a unique dilemma, i.e.,whether to select the traditional old taxregimeofclaimingtaxdeductionsortogiveawaythetaxdeductionsandclaimlowertaxrates providedunder thenewoptional taxregimeintroducedinFinanceAct2020.

Old tax regimeTheold tax regimeprovides a3-tier tax

rate slabs: 5%,20%and30%for incomeabove`2.5lakhupto`5lakh,above`5lakhup to`10 lakh and incomeover`10 lakh,respectively. While calculating taxableincomeunderold scheme,individuals canclaim tax free allowances like LeaveTravelConcession (LTC),House Rent Allowance(HRA),and certain otherallowances.Addi-tionally, standard deduction of `50,000,deduction for interest paid onhome loan,deductionsfortaxsavinginvestmentsspec-ifiedunderchapterVIA,etc.,allowtaxpay-ers to lower their tax outgoby investing inspecific schemes.These tax breaks signifi-cantlyreducethetaxableincome.

Newtax regimeThealternativetaxregimeofferssixslabs

withlowtaxrates,iftaxpayersforegoasetof70 exemptions and deductions availableunderincometaxlaws(includingLTC,HRA,standarddeduction,deductionunderchap-terVIA,etc.).Thenewtaxratesare:5%,10%,15%,20%,25%and30%forincomeslabsof above`2.5 lakhup to`5 lakh,above`5lakhup to`7.5 lakh,above`7.5 lakhup to`10 lakh, above `10 lakh to `12.5 lakh,above`12.5upto`15lakhandincomeover`15lakh,respectively.

Incomeup to`5 lakh is exempt underboththetaxregimes.

The choiceOnthefaceofit,thelowertaxratesinthe

new regime should result in lower taxes.However,thebenefit offered in the formofreduced ratesproves tobe inconsequentialand sometimesnegative,since the same iscounterpoised by removal of exemptionsand deductions. Those who have madeinvestmentsinordertoclaimtaxreliefswillnotfindthenewregimeattractive.

Taxpayerswithnohomeloan,stayinginrent-freeaccommodationandpreferringtomakesmallornoinvestmentsmayfindthenewschemebeneficial.The reduced rateswillalsoleavemoredisposableincomeinthehandsofpeoplewhocannotlocktheirfundsinprescribedinvestmentsfor somereason.

Based on averybroad calculation,anytaxpayer claim-ing total deduc-tions/ exemp-tionsmore than`2.5lakhislikelyto remain bene-ficial under theold scheme.However, tax-payerswill havetodoacompara-tive analysis oftheirtaxliabilityunderoldaswellasthenewregime.If significant amountof taxbreakswerebeingavailedbythe taxpayers,then itwould be better to continue paying taxundertheoldregime.

When tomake the choiceIndividualsnothavingbusinessincome

shallbegivenchoicetoselectbetweenoldornew scheme each year, and thus, mayexercise themore beneficial option aftercareful evaluation eachyear.However,forindividualshavingbusinessincome,optiononce exercised shall be final.Salaried indi-viduals are granted an option to choosebetweenoldandnewschemeatthetimeofmaking their tax declaration to employerfor the purpose of TDS.Having said that,even if any individual chooses one optionat the time of making declaration toemployer forTDS,he is free to change theoptionandselectanotherone,atthetimeoffilingtheITR.

Thewriterisdirector,NangiaAndersenConsulting.InputsfromVasudhaArora

●TAXTALKSHAILESH KUMAR

Existing

tax system

New

tax system

?

Howto forge a newpath toyour financial goals

FINANCIALEXPRESS9 WWW.FINANCIALEXPRESS.COM


BUY

`

ILLUSTRATION: SHYAMKUMAR PRASAD

❝

❝

ONSTOCK SELECTIONAjit Mishra, VP, Research, Religare Broking

We reiterate our cautious stance on themarketsand suggest continuingwith the stock-specifictrading approach. Investors should accumulatequality stocks on dips.

●YOURQUERIES

Tax savings notneeded?Thenswitch tonon-ELSSfunds orNPS●LastyearIstartedinvestinginequity-linkedsavingsscheme(ELSS)fundsthroughSIPof`1,500inthreefunds.Currently,Idon'tneedELSSinvest-mentfortaxsavingpurpose.ShouldIcontinueorswitchtononELSSSIP?

—SelvakumarInvestmentinELSSfundsqualifyfor

taxdeductionsundertheoldtaxregime,ofupto`1.5lakhunderSection80C,inagivenfinancialyear.EachSIPinvestment(andlumpsums) intosuchfundsissubjecttoalock-inof3yearsfromthedateofinvestment.Giventhatthereisnoneedtoinvest inELSSfundsfortaxsavinginfuture,forfutureSIPinvestmentsyoumayswitchtoothernon-ELSSfundsas itoffersflexibilitytoaccessfundsintimesofdireneed.Foradditionaltaxsavings,youmayconsiderinvestingintheNationalPensionScheme(NPS)toavail theadditionaldeductionof`50,000underSection80CCD(1B),availableunderthe

oldtaxregime.Ideally,anassetallocation-basedapproach(mixofequityanddebt)shouldbefollowedforportfolioconstruction,as it isoneofthekeydeterminantsoftheportfolio’sperformance.

●Istherealock-inperiodingoldETF?HowlongshouldIstayinvested?

—RaghuSKrishnanGoldETFsdonothaveanylock-in

period.GoldETFsarelistedonstockexchangesandcanbesoldontheexchangetoothermarketparticipants.Investorscanalsoredeemunitsdirectlywiththemutualfund.However,theminimumamountfordirecttransactionwiththemutualfundishigh;andhenceretail investorsarebestsuitedtoselltheirunitsonthesecondarymarketplatform.

Gold’s importanceasadiversifierhasbeenre-instatedevenrecently,as itdelivered43.41%inthelastoneyear(asofMay12,2020)comparedwithanegative17.63%byequities (BSE500TRindex).Although,overthelongterm(10-plusyears)goldhasunderper-formedequity.Fromanasset-allocationstandpoint,it isadvisabletohavesomeallocationtogoldfordiversificationbenefitsatanypoint intime.Youmayrestricttheallocationtogoldto5-10%ofyouroverallportfolio.Fromataxationstandpoint,investmentingold(includingETFs)attractstaxationsimilartothatofdebtfunds.Capitalgainsforaholdingperiodofuptothreeyearsaretaxedatthemarginaltaxrate,whilegainsforaholdingperiodofmorethanthreeyearsaretaxedat20%(excludingcess)post indexation.

Thewriterisdirector,InvestmentAdvisory,MorningstarInvestmentAdviser(India).

[email protected]

Dhaval Kapadia

Any taxpayerclaiming totaldeductions/exemptions of

more than `2.5 lakhis likely to remainbeneficial underthe old scheme

Old tax regimeor new regime:Making thesmart choice

A cautious investmentstrategy for capitalprotection is warranted inthe short term to tacklethe Covid-19 shock.Investors must reviewtheir portfolios regularly

ILLUSTRATION: SHYAMKUMAR PRASAD

MUTUALFUNDS

Ahmedabad

● `30K-CR LIQUIDITYWINDOW

ANKURMISHRAMumbai, May 18

NON-BANKING FINANCIAL companies(NBFCs) are of theview that onlyprimarymarket purchases should be allowedunderthe`30,000-crorespecial liquiditywindow announced by financeministerNirmalaSitharaman lastweek.

“I think the government could haveexcluded secondarymarket purchase inannouncing `30,000-crore liquidity forNBFCs,”IIFLFinanceCEOSumitBalitoldFE.“If secondarymarket purchase is allowed,intended liquiditymaybe distributed tosectorsotherthanNBFC,”hefurthersaid.

Another chief of an NBFC said, “Byallowing secondary market purchase,mutual funds (MFs)maybenefitmore astheywill offload theirNBFCpapers.”

InabidtoprovidefundstothestressedNBFC sector, the finance minister hadannounceda`30,000-crorespecialliquid-itywindow for entities that are finding it

difficult to raisemoney fromdebtmarketamid the Covid-19 crisis. Under thisscheme, investmentwill bemade in bothprimary and secondarymarket in invest-ment-grade debt papers of non-bankfinance companies (NBFCs), housingfinance companies (HFCs) and microfi-nanceinstitutions(MFIs),shesaidatapressconferencelastweek.Thegovernmentisyettonotifytheschemeofficially.

According to Crisil, the NBFC sectormay face liquidity stress with almost`1.75-lakh-croredebtobligationsmatur-ingbyJunethisyear.AlthoughNBFCshaveprovided moratorium on term install-

ment payments to its clients, the lenderbanks have agreed to give the same relieftoNBFCsonacase-to-casebasis.

TheFMhadalsoannounceda`45,000-crorepartialcreditguaranteescheme2.0forNBFCs,HFCs andMFIswith lowcredit rat-ingtohelpthemextendloanstoindividualsandMSMEs.TheReserveBankofIndia(RBI)hadalsoannouncedtargetedlongtermrepooperation (TLTRO)2.0 of`50,000crore tobeginwithforNBFCs.However,thefirstauc-tion under TLTRO 2.0 for `25,000 crorewith a three-year tenor received total bidsworth `12,850 crore, implying a poorresponsewithabidtocoverratioof0.5.

FE BUREAUMumbai, May 18

INAMOVE to support small andmediumenterprises, stock exchanges onMondayannouncedlistingfeerelaxationsforfirmslooking to list their small and mediumenterprisesplatforms.BothNationalStockExchange(NSE)andBSEweredoingthistosupport small andmedium enterprises(SMEs) during the unprecedented crisiscausedbytheCovid-19pandemic.

NSEhasdecidedtoprovide25%rebateon annual listing fees charged by thebourse to the companies currently listedon their SME platformNSE EMERGE.Onthe other hand,BSE has decided to bringdowntheannuallistingfeeby25%onBSESME platforms.The revised fee structureforBSEwill be applicable to both,compa-nies currently listed on the platform andthe companies that are awaiting to belisted on the BSE SME platform. AjayThakur,head – BSE SME& Startups,BSE,said,“Currently,India isgoingthroughanunprecedented crisis causedbytheCovid19pandemic.In these challenging times,it isourresponsibilitytosupporttheSMEswhichisthebackboneofoureconomy.Wehope that thesemeasures alongwith thebold steps taken by the governmentwillhelpinrevivingtheSMEsandalsoencour-age thousandsofSMEs togo for listing.”

Till date, 209 companies listed onNSE’s EMERGE have raised over `3,200crore using the platform. BSE SME hasseen listing of 322 firmswho have raised`3278.84crore fromthemarket.

BLOOMBERGMumbai, May 18

THE RUPEE DECLINED the most in twoweeks,and equities sank as investorswereunimpressed by the government’s eco-nomicstimuluspackage.

Therupeefell0.4%to75.9150perdol-larat the close in the thirddayof declines.The S&PBSE Sensex and theNSENifty50Index of shares tumbled 3.4% each inMumbai.Bothmeasures capped their sec-ond-weekoflossesonFridayandendedthedayattheirlowestlevelssinceearlyApril.

“Peoplearemoreconcernedaboutshort-termchallengesandnotthebenefitofthesemeasures in the long run,”saidAjitMishra,vice-president of research at Religare

BrokinginMumbai.“Howthesereformswillhelp improve demand in the near term iswhateveryone’sworriedabout.”

The Centre extended its lockdown toMay31,while easing curbs on somebusi-nesses after unveiling a rescue packageequivalent to 10% of the economy sinceFebruary.Barclays estimates the actual fis-cal impact of stimuluswill be only about0.8%ofGDP,while equity strategists andeconomistsareconcernedthemeasureswillfall short of tackling the near-term chal-lenges,includingboostingdemand.

“Markets are factoring in a painfulperiod that will see corporate earningsfalling and bankruptcies rising for smallfirmsandindividuals,”saidAnindyaBaner-jee,acurrencyanalystatKotakSecurities.

BSE, NSE cutannual listing feefor SMEs by 25%

Q4: India-focussedoffshore funds, ETFssee $5-bn outflow

`weakens to 2-week lowas rescue package falls flat

Investors lose `3.65Lcr asmarkets plunge

MITHUN DASGUPTAKolkata, May 18

SAYING THAT MICROFINANCE institu-tions(MFIs)arebetterequippedthanbanksto disburse loans under the government’sspecial credit facility for street vendors,microfinance lenders’umbrella body Sa-Dhanhasurged financeministerNirmalaSitharamantosetupofadedicatedfundof`3,000croreinMudraforthispurpose.

Last week, the government unveiled`5,000-crorespecialcreditfacilityforstreetvendors.Underthisscheme,avendorcangetinitial working capital up to `10,000.Sitharaman had said this scheme wouldsupportnearly50lakhstreetvendors.

“Asmuch as 45%of the borrowers ofMFIs are from the urban and semi-urbanareas,whichworksouttoabout20.46mil-lion,ofwhich nearly 31%are street ven-dors.AssuchMFIsarebestsuitedtoimple-ment this credit facility. Sa-Dhan hasalreadyinitiatedtalkswithDAY-NULMandthe housingministry,”Sa-Dhan executivedirectorPSatishsaidinhislettertotheFM.“Bankswill have to start from scratch togive loanstostreetvendors.Theywillhaveto find outwho these borrowers are, butMFIsarealreadywiththem.Weknowtheircredithistoryaswell,”SatishtoldFE.

“Oncethelockdownislifted,wecanstartdisbursingtheloans.MFIsarealreadyoper-ating ingreen zones.Theonlydrawback istheirfinancialposition,theyneedacreditlineso theycanstartdisbursement.That iswhywehave requested theFMtosetupat least`3,000-crorefundinMudra,”headded.

“I don’t knowhowcanaproperKYCbedoneforastreetvendor.Itisverydifficult.Avendormaybesellingvegetablesorfruitsorflowers on a street,but hemaynot have aproper residential address.Wewillwait forthe government to clarify,”a seniorofficialwithastate-runbanktoldFE.

Microfinanceindustrybodiesexpectthespecialliquidityandthepartialcreditguar-antee schemes announcedby the govern-ment to increase liquidity for the NBFC-MFIsinthemediumterm.WhilethespecialliquidityschemeislikelytohelplargeMFIs,thepartial credit guarantee schemewouldhelpmediumandsmall-sizedMFIs.

“The partial credit guarantee schemewillhelpsmallandmedium-sizedMFIs.Asthegovernmentisguaranteeing,bankswillbeinterestedinbuyingthepapersofsomesmall and unrated microfinance firms.MFIswillgetmoneyatcheaperrates.Thentheywillbeabletosustaintheiroperationsandlendmoretocustomers.Butitwillnothappen immediately.This is amedium-termplan of the government,”MFINCEOHarshShrivastavasaid.

SHRITAMABOSEMumbai, May 18

AN INCREASE INonlinebillpaymentsandapick-upinremittanceshelpeddigitalpay-ment volumes recover in the first half ofMay,industryplayerssaid.Anumberofpeo-plewhowereearlierusedtopayingtheirutil-itybills in cashmayhave shifted to digitalchannelsduringthelockdown,theyadded.

FinoPaymentsBankMDandCEORishiGuptasaid,“Someofthepeoplewhousedtopaybills incashhavenowswitched todigi-tal.”He added that thepayments bankhas

seen a close to60%growth indigital pay-ments for gas bills,20% in payments forlandlinesandbroadbandand7%fordirect-to-home(DTH)payments.

PayPoint India MD Ketan Doshi saidmostofthepaymentsatthisstagehavebeenbillpayments.“Weareseeingbillpaymentscominginabigwaybecausethecountersofutilitiesarenotopenandtheyalsointernallywant to avoid handling cash. Even cus-tomerswanttoavoidhandlingcash,”hesaid,adding that about 40%of these users arenewtodigitalmodesofpayingbills.

As people spend more time at home,

over-the-top (OTT) platforms and stream-ing serviceshave seena rise in subscribers.Paymentplayersareseeingthisasanewdri-verfordigitalpayments.“Anemergingseg-ment could be OTT.As more people stayhome, this could be the biggest area ofgrowth,alongwith payments for theirTV(television)subscriptions,”Doshisaid.

Remittances,too,have improvedby35-50%fromtheirApril levels.Soonafter thelockdown was announced on March 24,domestic remittanceshad takenahit,withmost players reporting a70-80%month-on-monthdropinvolumesinthissegment.

Full recoveryinthissegmentcouldtakeafewmoremonths,goinguptoSeptember,asworkerswhohave lost their jobs take awhile togetbacktheir incomes,saidGuptaofFino.Asforothercategoriesofconsump-tion-based payments, recovery could beswifter. Payworld COO Praveen Dhabhaisaid,“In the next 30-45 days, things will

becomenormalforallretailchannels,exceptfortravelorhigh-endfashion.”

Meanwhile,Aadhaar-enabledPaymentSystem(AePS)willcontinuetoruletheroostasmoney transferred by the governmentthroughDBTcontinues to bewithdrawn.TheycouldcometoreplaceATMsasthepre-ferredmodeofcashwithdrawals.“AePSvol-umesmaydrop,butnotnecessarilytotheirearlierlevelsbecausepeoplewon’timmedi-atelystartgoingtoATMsorbanks,”Dhabhaisaid,addingthataveragetransactionvaluesonAePShavestartedtoriseof lateandthatprovesitsutilitybeyondcashtransfers.

Bill payments drive digital payment volume recovery in first half ofMay

Say if secondarymarketbuys are allowed, liquiditymay go to other sectors

Indiabulls HousingFin raises `1,030 crINDIABULLSHOUSINGFinanceonMondaysaid ithasraised`1,030crorebyissuingbondsonaprivateplacementbasis.ThecompanyonMay18allotted10,300secured,redeemable,non-convertibledebenturesof facevalue`10lakheach,aggregatingto`1,030crore,onaprivateplacementbasis,thecompanysaid inaregulatoryfiling.

KotakMahindraBanklaunchesvideo-basedKYCINAFIRST,private sector lenderKotakMahindraBankonMondaylaunchedavideo-basedKYCthatwillmake it easiertoopenanaccountremotely,especiallyduring theCovid-19pandemic. Customerswillneed toshareAadhaarandPANnumbersaspartof theaccountopeningprocessunderthevideoKYCsystemtoopenthe‘Kotak811savingsaccount’,anofficial statement said.

CanaraBankstartsspecialgoldloanbizverticalCANARABANKhaslaunchedaspecialbusinessverticaldedicatedforgoldloans,keepinginmindthechallengesfacedbyitscustomersduetotheCovid-19pandemic.Agoldloancampaignwillbeheldtill June30thisyearwitha7.85%interestrateperannum.

SATtoremainclosedtillMay31amidpandemicTHESECURITIESAppellateTribunal(SAT)hassaiditwill remainclosedtillMay31inviewofthenationwidelockdownannouncedbythegov-ernmenttopreventthespreadofcoronavirus.Earlier,thetribunalhadsaiditwill remainclosedtillMay15.

Quick

View

MarketsFINANCIALEXPRESS10 WWW.FINANCIALEXPRESS.COM



INVESTORS BECAME POORER by`3,65,469.88croreonMondayastheBSEbenchmarkcrashed1,069points.The30-shareBSEindexended1,068.75pointsor3.44%lowerat30,028.98.

Following theweak trend in equities,the market capitalisation of BSE-listedcompaniesdropped`3,65,469.88croreto`1,19,00,649.71crore.

“Withthestimuluspackageannouncedby the government not seen as adequateconsidering theneedof thehourandwithinfections continuingunabated,themar-kets endeddownbyaround3.4%,in spiteofpositiveglobal cues,”VinodNair,headofresearchatGeojitFinancialServicessaid.

“Mostmeasuresmaybeseenasalong-termpositiveandmarketsweremorewor-riedabout the immediate impactof thesemeasures. With concerns about rising

NPAs, financials were most affected.Uncertainty is likely to continue impact-ing themarketperformance,”headded.

Markets ended sharply lower as the`20-lakh-crore economic package,announced in five tranches, failed to liftinvestors’ sentiment.Moreover,worriesovergrowingnumberofCovid-19casesin

thecountryalso led to sellingpressure."Markets started the week on a pes-

simisticnoteandshedover3%.Itseemsthedetailsofthestimuluspackagefellshortofmarket expectations, which triggered asharpreactiononthedownside.Thesellingpressurewaswidespreadwhereinthebank-ing, financials, auto and realty counterswere trashed badly,” Ajit Mishra, VP -research,ReligareBrokingsaid.

IndusInd Bankwas the top laggard inthe Sensex pack, cracking 10%. Bankswere the biggest contributor in the fall ofthe30-shareBSE index.

Sectorally, BSE bankex, finance, auto,realty,capitalgoods,oilandgas,metalandconsumer durables indices sank up to6.69%,while IT and teck indices endedwithgains.Inthebroadermarket,midcapand smallcap indices plunged up to3.87%. On the BSE, 1,770 companiesdeclined, while 549 advanced and 160remainedunchanged.

Money Matters

May 18May 4

6.083 5.774

The benchmark yieldfell due to buyingsupport

0.006%

G-SEC

May 18May 4

75.717

Inverted scale

75.912

The rupee depreciatedon global cues

0.45%

`/$

May 18May 4

1.090

1.082

The euro rose againstthe dollar

0.02%

C=/$

❝

❝

DIGITALPAYMENTSRishi Gupta, MD & CEO, Fino Payments Bank

Some of the peoplewho used to pay bills in cash havenow switched to digital... Full recovery in remittancessegment could take till September asworkerswholost their jobs take time to get back their incomes.

Remittances, too, haveimproved by 35-50% from

their April levels

ANALYSTCORNER

Retain ‘hold’on Ciplawith higherTPof `575

HSBC GLOBALRESEARCH

COVID-19DISRUPTIONS impactedCipla'sQ4FY20performance; it is seeingagradual return tooperationalnormalcy.Outlook remains stable forthe India business; a scale-upofgProventil is critical to improveUSbasesales trends.We look for improvedexecutionofUSgrowthdrivers. Retain'hold'with higher target price (TP) of`575 (from`560).Cipla sawa sales impact of`200

crore inQ4FY20 (~5%of total sales) dueto challenges in themovementoflogisticsmainly for its India formulationsbusiness andexports to emergingmarkets in the initial lockdownphase.This shavedoff~200bps fromEbitdamargins. It is seeing agradual return tooperational normalcywithmanufactu-ring currently back to 80-85%ofpre-Covid levels.The firmmaintained itsIndia sales growthmomentum for thethird consecutivequarter, reportingQ4growthof12%y-o-y.AsperCipla, thedemand scenario remains dynamic asbusiness activityvaries acrossdifferentlyclassified zones amid the lockdownanditwatches closely togauge India'smar-ket growthevolution. It continues to

push its 'One India' strategy (whichintegratesprescription, tradegenericsandconsumer health). Cipla'sUS inhalerportfolio recently sawabigboost dueto successful completionofPhase 3 stu-dies for genericAdvair Diskus, andexpe-dited FDAnod for gProventil (albuterolsulfate). It also filed another undisclosedcomplex inhalerwith the FDA.We likeCipla for its stable outlook for

keymarkets like India andSouthAfricaandcalibrated approach to capital allo-cation.After reaping low-hanging fruitfor cost controls, a further improvementin operatingmargins andRoICdependson significant scale-upofUS saleswherewehave limitedvisibility beyondgProv-entil in the near tomedium term. Front-end investment in theUS specialty busi-ness could also capmargins/RoIC.AfterQ4FY20,weadjust our estimates forFY21-22e asper the current businessoutlook, leading to4.6%/1.9%cuts inour EPSestimates, respectively.Weintroduceour FY23estimates in thisnote.We increaseour targetvaluationmultiple to 21x (earlier 20x) aswe rollforwardRoE input inGordongrowthmodel to FY21-23e (earlier FY20-22e).As a result, our fair value target priceincreases to `575 (`560).

Maintain‘buy’onM&MFinwithTP lowered to`250

EDELWEISS SECURITIES

MAHINDRA&MAHINDRAFinancialServices (MMFS) reported in lineQ4FY20 earnings (at `220 crore)markedby softer core and higherprovisions (Covid-19-relatedbloat). Keyhighlights: Growthmomentumremained softwith disbursements dipof>20%y-o-y. However, steadyNIMsand lower opex cushioned coreprofitability.Asset quality, asanticipated,was softer—gross stage-3rising—despite seasonally strongestquarter. Credit cost remained elevatedas the companymade `574-croreprovisions for theCovid-19 impact.Given the unprecedented challenges,we expect focus to remain on existingportfolio consolidation andoperationalfrugality.Weprune our growth/assetquality estimates, leading to EPS cut of38%/36% for FY21/22E.Wealso trimmultiple to 1.8x FY22E P/ABV, leadingto revisedTPof`250 (earlier `410).Growthmomentum remained soft

givenmuteddisbursements (down>20%, softer traction across segments)andAUMgrowthof~10%y-o-y.Thatsaid, steadyNIMs andcontrolled costsupportedcoreprofitability. Goingforward,with retiringofhigh-costborrowings andMMFS’ pricingpower,weanticipateNIMs tohave limitedimpact. However, key focuswill beoncost control.Management aims tobringopex/asset to 2%,whichwill cushionprofitability impact in uncertain times.As expected, asset quality remained

soft despiteQ4 being a seasonallystrong quarter.We expect the uncer-tainty on asset quality to persist given>70%of the customers are undermora-torium and the situation is ‘developing’.That said, the strong deep ecosystemconnects and larger rural focuswillkeepMMFS in better shape than peers.Uncertainty on growth and softerrecoverywillweigh onvaluation.Thatsaid, franchise strength and strongrelationshipswill bolster MMFS.Wemaintain ‘buy/SP’.

Worries mount

Nov

Source: Bloomberg

Dec Jan2019 2020

Feb Mar Apr May

Rupee falls with stocks amid disappointment over stimulus measures

Rupee spot-last price (`/$,RHS)

42,000

40,000

38,000

36,000

34,000

32,000

30,000

28,000

26,000

77.00

76.00

75.00

74.00

73.00

72.00

71.00

S&P BSE Sensex index-last price (LHS)

30,296.65

75.93

Sensex Intra-day, May 18

Open Close

31,248.26

30,028.98

29,500

30,000

30,500

31,000

31,500

INDIA-FOCUSSEDOFFSHORE fundsandexchange-tradedfunds(ETFs)witnessedanet outflowof $5 billion in threemonthsendedMarch 2020,making it the eighthconsecutive quarter ofwithdrawal amidthe coronaviruspandemic,according to aMorningstarreport.

In comparison, a net outflow of$2.1 billion was witnessed during thequarterendedDecember.

Since thequarterended June2018,thecategoryhaslost$16.3billionofnetassets.

India-focussed offshore funds andETFsaresomeof theeminent investmentvehicles throughwhich foreign investorsinvest in Indianequitymarkets.

Ofthetotalquarterlynetoutflowof$5billion, India-focussed offshore ETFs reg-istered a netwithdrawal of $3.6 billion,while the remaining $1.4 billion waswithdrawn by India-focussed offshorefunds,the reportnoted. —PTI

Specialwindow:Microlendersbetter equipped to disburse loansto streetvendors,saysMFI body

NBFCswant onlyprimarymarket to be allowed

Ahmedabad


FUEL CONSUMPTION ISrecovering fast in May, withdemand for diesel and petrolshowing signs of revival afterfallingbyarecordpaceinAprildue to the coronavirus-induced lockdown.

FuelsalessurgedduringthefirsthalfofMaycomparedwiththe sameperiod lastmonth,asvehicular traffic returned toroads followingeasingofsomelockdownrestrictions.

According to preliminarysales data of state-owned fuelretailers, diesel consumptionsoared 75% to 1.93 milliontonne in the first half of MaycomparedwiththesameperiodinApril.

Petrolsalesclimbed72%to5,75,000 tonne,while sales ofjet fuel almost doubled to39,000tonne.

However,consumptionwaslower than in the first half ofMay2019.

Sale of petrol was down47.5%comparedwith1.1mil-lion tonne sold during May1-15, 2019,while diesel con-sumption was 37.5% lowerthan 3.1 million tonne lastyear.

SaleofATFwasdown87.5%comparedwith3,10,000tonneinthefirsthalfofMay2019,thedatashowed.

CookinggasLPGwastheonlyfuel that showeda24%rise in

consumption to 1.2 milliontonne duringMay 1-15,2020comparedwith9,65,000tonneinthefirsthalfofMay2019.

The demand is expected topickupfurtherasmorerestric-tionswereeasedfromMonday.

Thedrop in fuel sales in thefirst half ofMay is lower thanthereductionseenduringApril1-15,2020.

Petrol sales bypublic sectorfirms were down 64% in thefirst half of April 2020, butended themonthwith a 61%fall after some uptrend in thesecondhalf.

Similarly, diesel salesslumped61% in the first half,but ended with 56.5% lowersalesforthemonth.

Overall,petrolsalescameinat around 8,70,000 tonne inApril,down from2.23milliontonneinthesamemonthayearago. Diesel consumption wasdown to 2.84 million tonne

from 6.56 million tonnes inApril2019.

FromMonday,more areas

have been openedwith workresumingatalotofofficesandfactories.

MARKETS 11FINANCIALEXPRESS


● BACKTOWORK

NOTICE

Notice is hereby given to the shareholders of the Company pursuant to the provisions of section124(6) of the Companies Act, 2013 (‘the Act’) and the Investor Education and Protection Fund

Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, including any statutory

modifications or amendments for the time being in force (‘the Rules’) as under.

The Act and Rules, amongst other matters, contain provisions for transfer of all shares in respect

of which dividend has not been paid or claimed by the shareholders for 7 (seven) consecutiveyears or more to the Investor Education and Protection Fund (‘IEPF’) Authority.

The Company has sent individual notices to the latest available addresses of the shareholders

whose dividends are lying unpaid or unclaimed for the financial year 2012-13 along withsubsequent 7 (seven) consecutive year’s dividend, advising them to claim the dividends on or

before August 18, 2020.

Further in terms of Rule 6(3) of the Rules, the statement containing the details of name, folio

number/demat account number and number of shares due for transfer is made available on the

Company’s website: www.drreddys.com for information and necessary action by the shareholders.

Shareholders who have not claimed their dividends from the year 2012-13 can write to the

Company’s Registrar & Share Transfer Agent, M/s. Bigshare Services Private Limited, 306, 3rdFloor, Right Wing, Amrutha Ville, Opp: Yashoda Hospital, Rajbhavan Road, Somajiguda,

Hyderabad – 500082 (India) (email: [email protected]) or to the Company on or

before August 18, 2020 for further details and for making a valid claim for the unclaimeddividends. If no valid claim has been made, such shares will be transferred to the IEPF Account

after August 18, 2020.

Any person, whose shares and unpaid/unclaimed dividends have been transferred to the IEPF,

may claim the shares and unpaid/unclaimed dividends from IEPF by submitting an online

application in the prescribed Web Form IEPF-5 available on the website: http://iepf.gov.in/IEPF/corporates.html and sending a physical copy of the same along with the necessary

documents to the Nodal Officer of the Company. Please note that post transfer of unpaid or

unclaimed dividend amount and shares to IEPF, no claim shall lie against the company.

This notice is also available on the Company’s website: www.drreddys.com and on the website

of stock exchanges www.bseindia.com and www.nseindia.com.

For Dr. Reddy’s Laboratories Ltd.

Sandeep Poddar

Company Secretary

Dr. REDDY’S LABORATORIES LIMITED

Regd. Office: 8-2-337, Road No.3, Banjara Hills, Hyderabad - 500 034, Telangana, India

CIN: L85195TG1984PLC004507, Tel: 91 40 4900 2900, Fax: 91 40 4900 2999email: [email protected], website: www.drreddys.com

Place : Hyderabad

Date : May 18, 2020

NANDAKASABEPune, May 18

THREE SEGMENTS OF theMumbaiAgricultural ProduceMarket Committee (APMC) inVashi reopened on Mondayafter a week-long shutdown.Vegetables, foodgrain andspices sections of themarketwereopened.

The fruits, onion, andpotatomarketswillopenfromThursday, top officials of theAPMCsaid.

Adecisiontoopenthemar-ketwastakenatameetingofallstakeholders alongwith gov-ernmentofficialsonSaturday.

Thegrainmarketisworkingon an odd-even formulawithone day for loading of com-modities coming from otherplaces while another day forloading or sending to con-sumersinandaroundMumbai.

Vashi APMC secretaryAnilChavan said theywere check-ing the temperature and andoxygen level of eachandeveryperson before allowing them

entry into the Vashi APMC.“Therewas a bit of confusiononMondaywith crowding atthe grain market since onlyonegatewasopenedbutwearetaking due precautions toensure that this does not hap-penagain,”he said.

The government hasrestrictedentryofthenumberof vehicles into mandis. Forentry, the vehicle requires toget prior registration andobtain a token number andtiming for entry for smooth

medical check-up of its driverand attendants, apart fromproper sanitisation of thevehicle itself.Forvegetables,amaximum of 150 vehicleswouldbeallowedforentryperday. For grains and masalamarkets,300and200vehicleswouldbeallowedtoenterintomandipremises.

Chavan said the APMC islaunching a separate applica-tion throughwhich bulk andretail orders can be placed fordelivery in a day or two.Usu-

ally, around 650vehicles con-taining vegetables used toenterintoAPMCVashi inaddi-tion to thousands of vehiclescarrying grains,masala, fruitsandonion.

Following a lot of preven-tive measures taken by thestate government and themandi authorities, the totalnumber of footfall hasdeclinedto60,000from1lakhduring normal times,he said.The government aims toreduce footfall to prevent thespread of coronavirus whichhasinfectedover550peopleinNaviMumbaiandaround125inVashiAPMC.APMCofficialssaid over the past few days,around 6,000 APMC marketparticipants have beenscreened forCovid-19.

Mathadi worker leaderNarendraPatilsaidfewerwork-ers reported forwork onMon-day asmanyof themhave leftfor theirvillages.However, thecontractorsalsorealisethatitisin their interest to keep themarketrunning,hesaid.

VashiAPMCreopens afterweek-long shutdown

Brent hits two-month high assome economies get restartedSCOTTDISAVINONewYork, May 18

OILPRICES JUMPED onMon-day, with both US and Brentbenchmarks on track for theirhighest settles in twomonths,supported byoptimism aboutresumption ineconomic activ-ityandsteadyoutputcuts frommajorproducers.

BrentfuturesforJulydeliveryrose$2.96,or9.1%,to$35.46abarrel,whileUSWestTexasInter-mediate crude (WTI) for Junetraded$3.61,or12.3%,higherat$33.04.ThatputsbothBrentandWTIontrackfortheirhigh-estsettlessinceMarch11.

Summerweather is entic-ing much of the world toemergefromcoronaviruslock-downs.Shops and restaurantswere reopening in Italy onMonday,whileothercentresoftheoutbreaksuchasNewYorkand Spain will gradually liftrestrictions.

“Optimismon the demandside of the oil equation hashelpedpricesclimbfurther,with

gasoline demand comingbackas governments ease confine-ment measures,” said RystadEnergy’ssenioroilmarketsana-lystPaolaRodriguezMasiu.

However,analystscautionedthatdemandwasnot expectedto recover to pre-coronaviruslevelsanytimesoon.“Clearlythefundamentalsinthemarketareimproving,butwe continue tobelieve that themarket is rally-ingtoomuchtoosoon,withtherisk that further strength willonly prolong the supply anddemandimbalance,”INGanalystWarrenPattersonsaid.

TheheadoftheInternational

Monetary Fund warned theglobal economywill takemuchlongerto recoverfullyfromtheshockcausedbythecoronavirusthaninitiallyexpected.

TherallyintheJuneWTIcon-tract,whichwill expireonTues-day,suggested lastmonth’shis-toric plunge tonegative-$40abarrelwouldnotberepeated.

July WTI was the moreactivelytradedfuturescontractwith volumes in the second-month contract outpacing thefront-month for several daysnow.The July contractwas upabout11%to$32.80.

Despite bleak economicforecasts, oil priceswere sup-ported by production cuts bytheOrganization of the Petro-leumExportingCountries andits allies, including Russia, agroup known as OPEC+. Theworld’s top exporterSaudiAra-biasaidlastweekitwouldcutanadditional1millionbarrels perdayinJune,whileOPEC+wantsto maintain existing oil cutsbeyond June when the groupmeetsnext. —REUTERS

Co-op banks&RRBs get`20,500 crfromNabardPRESSTRUSTOF INDIANewDelhi, May 18

NATIONALBANKFORAgricul-ture and Rural Development(Nabard) onMondaysaid it hasdisbursed `20,500 crore tocooperativebanksandregionalrural banks (RRBs) foron-lend-ingtofarmers.

This amount, is part of the`25,000 crore of special refi-nance facility provided by theReserve Bank of India (RBI) toNabardforrefinancingregionalrural banks (RRBs),cooperativebanks andmicro finance insti-tutions(MFIs).

“We have extended`20,500 crore with `15,200croretocooperativebanksandthe balance of `5,300 crore toRRBsasspecial liquidityfacili-ties in various states,”Nabardsaid ina release.

Thefundisgivenasameansoffront-loadingtheresourcesofcooperativebanksandRRBs.

Regd. Off: Colgate Research Centre, Main Street,Hiranandani Gardens, Powai, Mumbai 400 076.

CIN: L24200MH1937PLC002700Tel: +91 22 6709 5050; Fax: +91 22 2570 5088

Email Id: [email protected]: www.colgatepalmolive.co.in

NOTICE is hereby given that pursuant to Regulation 47 of the

Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations, 2015, a Meeting of theBoard of Directors of the Company is scheduled to be held on

Thursday, May 21, 2020, inter-alia, to consider, approve and takeon record the Audited Financial Results of the Company for thequarter and year ended March 31, 2020.

The Notice of the Board Meeting can also be accessed on the

Company’s website at www.colgatepalmolive.co.in and may alsobe accessed on the Stock Exchange websites at www.bseindia.comand www.nseindia.com

For Colgate-Palmolive (India) Limited

K. Randhir SinghCompany Secretary & Compliance Officer

Place: Mumbai

Date : May 18, 2020

NOTICE

Sugaroutputdeclines19%to26mt in current season so farFE BUREAUChennai, May 18

SUGAR PRODUCTIONBETWEEN October 2019 andMay15thisyearinthecurrentsugar season has declined by19% to 26.46 million tonne(mt) against 32.61 mt in thesame period last season — adropof6.15mt.

Compared with 38 sugarmillswhichwerecrushingsug-arcaneasonMay15,2019,63sugarmillswerecrushingsug-arcaneonMay15thisyear.

AmidCovid-affected times,contracts for export of 4.2mthavebeenmadetillbeginningofMay2020.Asperreports avail-ablefrommillsandports,about3.6 mt have been moved/dis-patched from the mills forexports.Contractsforexportarebeing signed forvarious desti-nations,withmajorquantitiesfor Indonesia and Iran. Ship-ments are also happening andareexpectedtonormaliseinthedays to come, Indian SugarMills’Association(ISMA)saidinareleaseonMonday.

Thegovernmenthasallowedexport of 6mt of sugar undermaximum admissible exportquota(MAEQ)duringthe2019-20 marketing year (October-

September)toliquidatesurplussugarintheglobalmarkets.

According to ISMA, theUnion government has urgedmills for diversion of excesssugarcane and sugar for pro-duction of fuel ethanol as along-term solution to addressthe problem of excess sugarstock. It is already well-acceptedbyISMA,asaugmen-tation in ethanol capacity forthe upcoming years is at dif-ferent stages of progress/implementation.

According to data, UttarPradesh sugarmills have pro-duced12.22mtasonMay15-- 5.48 lakh tonne higher thantheproductionof11.68mtonthe corresponding date lastyear,consideredtobethehigh-

est-ever sugar production inthe state. In Maharashtra,sugar production till May 15was6.08mt against 10.71mtproduced in the 2018-19sugarseason—almost4.63mtlesser.All the operating sugarmills inKarnatakaclosedtheircrushing operations by April30 and produced 3.38mt. InTamil Nadu, sugar productiontillMay15was5.65lakhtonneagainst 7.16 lakh tonne pro-duced on the correspondingdate lastyear.

The remaining states ofAndhra Pradesh, Telangana,Bihar, Uttarakhand, Punjab,Haryana, Madhya Pradesh,Chhattisgarh, Rajasthan andOdisha have collectively pro-duced3.27mttillMay15.

NOW THAT THE lockdown periodseemstobewithdrawnat least insomeparts of the country (greenandyellowzones), some kind of positive senti-ments are coming to the surface.

A specialmentionmust bemade ofthe transport and logistics sector thattake the products to the consumers atthe far end of the country. In later partofMarchandApril 2020,the transportconstraintsdidnotallowtheevacuationofmaterials from the production loca-tions,norwasallowedthemovementoffinished materials from plant/ware-housestotheendusers’premises.

The tick-upof thesentiment in thepost-lockdown scenario is weighedagainst the various projections thataremoving aroundon the prospect ofthekillervirusreachingapeakinIndiaby June, the widespread reports ofmassive andunprecedentednumbersof loss of human lives,mostly in theadvanced and developed countriesand rising mortality rates and freshvictimsof theCovid-19pandemic inafewstates in the country.

The sustenance of this sentimentthuswould determine the path Indianeconomywouldtakeusto.Nodoubttheactualisationofthissentimentfacesanuphill taskwhich ismore challengingand fierce than anyprevious ones likewe had in the global financial crisis of2008-09.Onemust appreciate that alarge part of the current crisis origi-nates in poor demand. As demand isweak, supply needs to match it at amuchlowerlevel,therebycuttingdownproduction, resulting in low capacityutilisation,highinventoriesandhigherfixedcostperunitofproduction.

It is heartening to note that thegovernment as part of its stimulusmeasureshasannouncedanumberoffinancialpackagesaimedateasingtheavailability of liquidity, loan repay-ment and NPAs restructuring forMSMEswhichcontributesignificantlyto GDP, have a high employmentpotential and a predominant share inourexports.

With regard to the steel industry,the roleof SMEs isdisplayedbynearly50% share on production and majorshare in products like TMT,wire rods,structurals,coatedproductsandtubesandpipes.

Similarly, the presence of SMEs insteel user segments such as construc-tion companies, housing companies,equipment, including electrical equip-ment and tools manufacturers, foodprocessing units, canmanufacturers,Railandroadcontractors,TLTmanufac-turers, bus builders, bicyclemanufac-turers, auto componentmakers, steelfabricators and a host of otherusers ofsteelissignificant.Theirrejuvenationinthe post Covid-19 pandemic scene,would contribute to production andconsumption of steel and enhance theavailability of awhole gamut of capitalgoods, consumer durable goods and

packaging goods to cater to the infra,engineering and household demand.The government has also introducedsome long-pending reforms inagricul-ture and mining sector which wouldsurely facilitatemarketing of agricul-tural goods and thereby fetch a remu-nerative price for food items. On theotherhand, themining reformswouldgoa longwaytowardsremovinguncer-tainty in availability and expedite auc-tioning ofmines to improve supplies.Impetushasbeengivenonexplorationof fresh mines in coal, bauxite, lime-stoneandothers.

The post-lockdown period mustfocusoncommencementofbig-ticketinfraprojects.Amongthese,theprior-ityneedstobeaccordedtotheprojectsalready commenced and inwhich thepart of investment has been made.Manyroadprojects,Metro,DFC fall inthis category. These projects have ahigher prospect of being completedfaster than fresh projects and have aquickerdeliverability.Asconstructionofdwellingunits,buildings,irrigationprojects in the rural and semi urbanareas had commenced earlieronApril20 onwards, some demand of con-structional steel (re-bar, wire rods,roundsand lightgaugestructural sec-

tions aswell asGP/GCand steel pipes)have already emerged. This demandwould be further enhanced with thelatest announcement of `70,000-crore bonanza for approximately 2.3crore of houses under CLSS (creditlinked subsidy scheme). Simpledesigns of steel intensive houses byINSDAGare availablewhich indicates1.5-2.5 tonne steel per house. Thisitself has a potential demand forapprox. 34.5-57.5MT of steel whichsounds like a dream, but that is theoutcome of steel intensive structuresin the domesticmarket.

ExpectedlyIIPdata forMarch2020indicates the performance for the firstfortnight only as the next fortnight inthe month got washed away due tolockdown.A21%fall inmanufacturing(may bemarginally upwhen final fig-ures come) during March 2020 hasbroughtdowntheyearlygrowthrateto(-)1.3%against 3.9%growth in FY19.Thecallforself-sufficiencybythePrimeMinisterinbuildingupourownbaseofmanufacturing is indeed timely.

The pandemic has created a vac-uum in global manufacturing spacewith the leading countries,Germany,France, Italy, UK, US losing theirmomentum in basic manufacturingoperations,havealreadystartedwith-drawing their bases from China,Viet-nam. Indian manufacturing sector,especially the MSMEs, must utilisethis opportunity by taking part in theglobal supply chain and therebyattract foreign investment in settingup facilities in India or expanding theexisting facilities.

The GOI is to further simplify thecontractual clauses and documenta-tion for doing business without com-promising our interest.The growth ofmanufacturing ismost crucial for thecountryinthepost lockdownperiodtocreate job opportunities, incomegen-eration,demand forcommodities likesteel (also special grades) and earningforeign exchangevia exports.

SUSHIMBANERJEEDG, InstituteofSteelDevelopment&Growth

Focus should nowbe onmanufacturing

AUBankpromoter sellssharesworth`103 crorePRESSTRUSTOF INDIANewDelhi, May 18

CHIRANJEE LALAGARWAL,one of the promoters of AUSmall Finance Bank,onMon-day sold 25 lakh shares of thecompany for `103 crorethrough an open markettransaction.

According to theblockdealdata available on the NSE,Agarwal sold25 lakhsharesofthe company at an averagepriceof`414.6.

At this price, the transac-tionisvaluedat`103crore,thedata showed.

The shareswere bought bythe Singapore governmentandtheMonetaryAuthorityofSingapore.

At the end of the March2020 quarter, Agarwal held2.25 per cent stake in the AUSmall FinanceBank.

Shares of AU SmallFinanceBankclosedat396.65,down 4.99% from the previ-ouscloseontheNSE.

Earlier, Agarwal soldshares of AU SmallFinance Bank to BhartiSbm Holdings worth`100crore.

Fuel demand shows signs of revival;sales increase in first half ofMay

Summerweather isenticingmuch of theworld to emerge fromcoronavirus lockdowns.However, analysts

cautioned that demandwas not expected torecover to pre-coronalevels any time soon

AnAPMCvegetablemarketwhichwas opened in NaviMumbai onMonday EXPRESS PHOTO: NARENDRAVASKAR

Ahmedabad

12 FINANCIALEXPRESS

WWW.FINANCIALEXPRESS.COMTUESDAY, MAY 19, 2020

HERITAGE FOODS LIMITEDCIN: L15209TG1992PLC014332

Regd. Office: # 6-3-541/C, Panjagutta, Hyderabad-500082, Telangana. Tel:+91-40-23391221/2,

Fax:+91-40-23318090, E-mail: [email protected] Visit us at: www.heritagefoods.in

NOTICE OF POSTAL BALLOT(through remote e-voting)

Place : Hyderabad

Date : May 18, 2020

For HERITAGE FOODS LIMITED

Sd/-

UMAKANTA BARIK

Company Secretary & Compliance Officer

M. No. FCS-631

Members are hereby informed that pursuant to Section 110 and other applicable provisions of the Companies Act, 2013 (“the

Act”) read with Rule 22 of the Companies (Management and Administration) Rules, 2014 (including any statutory modifications,

amendments or re-enactment thereof for the time being in force), SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015 (Listing Regulations) and such other applicable laws, rules and regulations and in terms of the General

Circular No. 14/2020 dated April 08, 2020 and General Circular No. 17/2020 dated April 13, 2020 (the MCA Circulars) issued

by the Ministry of Corporate Affairs, Government of India (the MCA), HERITAGE FOODS LIMITED (the Company) has on

Monday, May 18, 2020 completed the dispatch of the Postal Ballot Notice (the Notice) through e-mail to all its Members who

have registered their e-mail IDs with the Company or Depositories/Depository Participants or Company’s Registrar and

Share Transfer Agent (RTA) viz. Kfin Technologies Private Limited (KFintech), for seeking their approval by way of Special

Resolution in respect of the business set out in the Postal Ballot Notice dated May 14, 2020.

The Postal Ballot Notice has been sent to email address of those members whose names appeared in the Register of

Members/Record of Depositories as on Friday, May 15, 2020 (the cut-off date). Those members, who are not the member of

the Company as on the cut-off date and receive the Postal Ballot notice on their e-mail IDs should treat the Postal Ballot

notice for information purpose only.

Please note that as a valued member of the Company, you are entitled to request a copy of the Postal Ballot Notice. In case

you have not received the Postal Ballot Notice at your registered email address, you can request for a duplicate copy of the

Postal Ballot notice. A request in this respect may sent to Mr. C Shobha Anand, Deputy General Manager by e-mail at

[email protected]. Copy of Postal Ballot notice and other documents (if any) are served through email only. The

Postal Ballot notice is also available on the website of BSE Limited at www.bseindia.com and National Stock Exchange of

India Limited at www.nseindia.com and at the website of the Company at www.heritagefoods.in and also on the e-voting

website of KFintech at https://evoting.karvy.com.

The Board of Directors of the Company has appointed Mrs. Savita Jyoti, Partner of M/s. Savita Jyoti Associates, Practicing

Company Secretaries (M No: FCS -3738) (CP No: 1796) as ‘Scrutinizer’ for conducting the Postal Ballot process through

remote e-voting mechanism only in a fair and transparent manner.

In compliance with Section 108 of the Companies Act, 2013 read with Rules made thereunder and Regulation 44 of the

Listing Regulations, the Company has engaged the services of KFintech for facilitating ‘Remote E-voting’ to enable the

members to cast their votes electronically instead of physical mode. In terms of the MCA Circulars, voting can be done only

by remote e-voting. The members are advised to use the remote e-voting procedure by themselves and not through any

other person/proxies. The Remote E-voting facility will commence on Tuesday, May 19, 2020 at 09:00 a.m. (IST) and will end

on Wednesday, June 17, 2020 at 05:00 p.m. (IST) (both days inclusive). Remote E-voting will be disabled by KFintech at

05:00 p.m. (IST) on Wednesday, June 17, 2020.

The following information is being provided to the members in respect of remote e-voting.

1. The Postal Ballot notice has been issued in compliance with all the applicable provisions of the Companies Act, 2013

and Rules made thereunder and in terms of the MCA Circulars. The members may cast their votes on all resolutions

set out in the Postal Ballot notice using remote e-voting only.

2. In compliance with the requirements of the MCA Circulars, hard copy of Postal Ballot notice along with Postal Ballot

forms and prepaid business envelope will not be sent to the members for this Postal Ballot and members are required

to communicate their assent or dissent through the remote e-voting system only.

3. The Postal Ballot notice containing the procedure for e-voting is also displayed on the website of the Company at

www.heritagefoods.in, website of the KFintech at https://evoting.karvy.com and on the website of the Stock Exchanges

on which the shares of the Company are listed.

4. The e-voting rights of the members/beneficiary owners shall be reckoned on the paid-up value of the equity shares

registered in the names of the members as on Friday, May 15, 2020 being the cut-off date for dispatch of Postal Ballot

notice. The members of the company having equity shares registered in their names either in dematerialised or in

physical form, as on the cut-off date only shall be entitled to avail the facility of remote e-voting.

5. The e-voting period shall commence on 09:00 a.m. (IST) Tuesday, May 19, 2020 and ends on 05:00 p.m. (IST)

Wednesday, June 17, 2020 (both days inclusive), after which voting shall not be allowed and the e-voting module will

be disabled by KFintech. Once vote on a resolution is cast by the member, he/she shall not be allowed to change it

subsequently or cast the vote again.

6. Those members who have not yet registered their email address are requested to get their email addresses registered

by following the procedure given below:

a. In light of the MCA Circulars, members who have not registered their email address and in consequence could

not receive the e-voting notice may temporarily get their email registered with the KFintech by clicking the link:

https://karisma.kfintech.com/enaukreg and following the registration process guided thereafter. Post successful

registration of the email, the member would receive soft copy of the notice along with the User ID and the

Password to enable e-voting for this Postal Ballot. In case any queries, the member may write to the

[email protected].

b. It is clarified that for permanent registration of email address, the members are however requested to register

their email address, in respect of electronic holding with the Depository through their concerned Depository

Participants and in respect of physical holding with the Company’s Registrar and Share Transfer Agent, KFin

Technologies Private Limited [Unit: Heritage Foods Limited], e-mail: [email protected], Toll Free No.:

1800 345 4001 by following due procedure.

7. In case of any query/ grievance pertaining to E-voting, please visit Help & FAQ’s section of https://evoting.karvy.com or

contact Ms. C Shobha Anand, Deputy General Manager at KFin Technologies Private Limited [Unit: Heritage Foods

Limited], Selenium Tower B, Plot 31 & 32, Financial District Nanakramguda, Serilingampally Mandal, Hyderabad –

500032, Telangana, India, e-mail: [email protected], Toll Free No.: 1800 345 4001.

8. The result of the Postal Ballot shall be announced on or before Friday, June 19, 2020 i.e. not later than 48 hours of

conclusion of voting through ‘Remote E-voting’. The same shall be posted on the website of the Company at

www.heritagefoods.in and website of the KFintech at https://evoting.karvy.com and will also be communicated to the

Stock Exchanges where the shares of the Company are listed. The Company will also display the results of the Postal

Ballot at its Registered Office. The resolutions, if assented by the requisite majority, shall be deemed to be passed on

the last date specified for e-voting, i.e. June 17, 2020, in terms of the Secretarial Standards on General Meetings

(SS-2) issued by the Institute of Company Secretaries of India.

indianexpress.com

The Indian Express.

For the Indian Intelligent.

I arrive at a conclusionnot an assumption.

Inform your opinionwithdetailed analysis.

Ahmedabad

HERITAGE FOODS LIMITEDCIN: L15209TG1992PLC014332

Regd. Office: # 6-3-541/C, Panjagutta, Hyderabad-500082, Telangana. Tel:+91-40-23391221/2,

Fax:+91-40-23318090, E-mail: [email protected] Visit us at: www.heritagefoods.in

To,

The Member(s),

NOTICE is hereby given, pursuant to the provisions of Section 110 and other applicable provisions, if

any, of the Companies Act, 2013, (the ‘Companies Act’), read with Rule 22 of the Companies

(Management and Administration) Rules, 2014, Regulation 44 of the Securities and Exchange Board of

India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’),

Secretarial Standard issued by Institute of Company Secretaries of India on General Meetings (‘SS-2’),

(including any statutory modification(s) or re-enactment(s) thereof, for the time being in force), and

other applicable laws and regulations, if any, it is proposed to seek the consent of the Members of

HERITAGE FOODS LIMITED (the ‘Company’), by way of special resolutions appended herein below

through postal ballot (‘Postal Ballot’) by way of remote electronic voting (e-voting).

In view of the pandemic situation of COVID-19 and pursuant to the guidelines and notification issued by

the Ministry of Home Affairs, Government of India (the ‘MHA’) and in light of circulars issued by the

Ministry of Corporate Affairs, Government of India (the ‘MCA’) vide its General Circular No.14/2020

dated April 08, 2020 and General Circular No.17/2020 dated April 13, 2020 (the ‘MCA Circulars’) and

pursuant to Section 110 of the Companies Act and the Rules made thereunder, the Company proposes

for passing of resolutions as per this Postal Ballot Notice.

In terms of the MCA Circulars, in view of the current circumstances due to COVID-19 pandemic requiring

social distancing, companies are advised to take all decisions requiring Members’ approval, other than

items of ordinary business or business where any person has a right to be heard, through the mechanism

of Postal Ballot/E-voting in accordance with the provisions of the Companies Act and Rules made

thereunder, without holding a general meeting that requires physical presence of members at a common

venue. The MCA has clarified that for Companies that are required to provide E-voting facility under the

Companies Act, while they are transacting any business(es) only by Postal Ballot up to June 30, 2020

or till further orders, whichever is earlier, the requirements provided in Rule 20 of the said Rules as well

as the framework provided in the MCACirculars will be applicable mutatis mutandis. Further, the Company

will send Postal Ballot Notice by e-mail to all its members who have registered their e-mail addresses

with the Company, Registrars and Transfer Agents or Depository/ Depository Participants and the

communication of assent/ dissent of the members will only take place through the E-voting system. This

Postal Ballot is accordingly being initiated in compliance with the above MCA Circulars.

In compliance with the requirements of the MCA Circulars, hard copy of Postal Ballot Notice along with

Postal Ballot Forms and pre-paid business envelope will not be send to the Members for this Postal

Ballot and Members are required to communicate their assent or dissent through the remote e-voting

system only.

The Board of Directors of the Company now propose to obtain the consent of the Members by way of

Postal Ballot/e-voting for the matter as considered in the Resolutions appended below. The explanatory

statement pursuant to Sections 102 and 110 of the Act pertaining to the following resolutions setting out

the material facts concerning each item and the reasons thereof are annexed hereto for your

consideration.

The Board of Directors of the Company (the “Board”) has appointed Mrs. Savita Jyoti, Partner of M/s.

Savita Jyoti Associates, Practicing Company Secretaries (M No: FCS -3738) (CP No: 1796), as the

Scrutinizer for conducting the postal ballot and e-voting process in a fair and transparent manner. The

Scrutinizer will submit her report to the Chairman of the Company after completion of scrutiny of the e-

voting process. The results shall be declared on or before Friday, June 19, 2020 and communicated to

the Stock Exchanges, Depositories and Registrar and Share Transfer Agents. The results will also be

displayed on the Company's website i.e. www.heritagefoods.in.

You are requested to peruse the following proposed Resolutions along with the respective Explanatory

Statement items and thereafter record your assent or dissent by means of E-Voting facility provided by

the Company.

SPECIAL BUSINESS

Item No 1: To approve for giving guarantee or providing security under Section 185 of

Companies Act, 2013 to the Joint Venture Company

To consider and if thought fit, to pass with or without modification(s) the following resolution as Special

Resolution:

“RESOLVED THAT pursuant to the provisions of Section 185 of the Companies Act, 2013 ('Act') and

any other applicable provisions of the Act & Rules made there under read with the Companies

(Amendment) Act, 2017 (including any statutory modification thereof for the time being in force and as

may be enacted from time to time) and subject to such approvals, consents, sanctions and permissions,

as may be necessary, provisions of other applicable laws, consent of the members of the Company be

and is hereby accorded to provide guarantee(s) and/ or security(ies) in connection with any loan(Long/

short term, Working Capital etc) taken / to be taken from banks and financial institutions by Heritage

Novandie Foods Private Limited (CIN:U74999TG2017PTC120860), a Joint Venture Company, the

aggregate of which shall not exceed Rs.30,00,00,000/- (Rupees Thirty Crores only) outstanding at any

point of time.”

“RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is

hereby authorised to negotiate, finalise and agree to the terms and conditions of the aforesaid guarantee/

security, and to take all necessary steps, to execute all such documents, instruments and writings and

to do all necessary acts, deeds and things in order to comply with all the legal and procedural formalities,

including but not limited to making requisite filings with any statutory authorities / regulatory bodies in

India or abroad, and to do all such acts, deeds or things incidental or expedient thereto and as the

Board may think fit and suitable in the interest of the Company.”

Item No 2: To approve for giving loan or guarantee or providing security in connection with loan

availed by any of Company’s Subsidiary, Associate, Joint Venture Company and other

person specified under section 185 of the Companies Act, 2013.

To consider and if thought fit, to pass with or without modification(s) the following resolution as Special

Resolution:

“RESOLVED THAT pursuant to the provisions of section 185 and other applicable provisions, if any, of

the Companies Act, 2013 (the “Act”) and the Companies (Meeting of Board and its Powers) Rules, 2014

(including any statutory modification(s), clarification(s), substitution(s) or re-enactment(s) thereof for

the time being in force), consent of the members of the Company, be and is hereby accorded to the

Board of Directors of the Company (hereinafter referred to as the “Board”, which term shall be deemed

to include, unless the context otherwise required, any committee of the Board or any director(s) or

officer(s) authorised by the Board to exercise the powers conferred on the Board under this resolution)

for giving loan(s) in one or more tranches including loan represented by way of Book Debt (the “Loan”)

to, and/or giving of guarantee(s), and/or providing of security(ies) in connection with any Loan taken/to

be taken by any entity which is a subsidiary or associate or joint venture or group entity of the Company

or any person in which any director of the Company is interested/deemed to be interested, up to a sum

not exceeding Rs.50,00,00,000/- [Rupees Fifty Crores Only] outstanding at any point of time other than

ny amount specifically approved by Board/Members of the Company for any entity/company/persons,

in its absolute discretion deem beneficial and in the interest of the Company.”

“RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors

be and is hereby authorised to negotiate, finalise and agree to the terms and conditions of the aforesaid

Loan/ guarantee/security, and to take all necessary steps, to execute all such documents, instruments

and writings and to do all necessary acts, deeds and things in order to comply with all the legal and

procedural formalities, including but not limited to making requisite filings with any statutory authorities

/ regulatory bodies in India or abroad, and to do all such acts, deeds or things incidental or expedient

thereto and as the Board may think fit and suitable in the interest of the Company.”

POSTAL BALLOT NOTICEPursuant to Section 110 of the Companies Act, 2013 read with Rule 22 of the Companies (Management and Administration) Rules, 2014 and the MCA Circulars (as defined below)

NOTE :

1. An Explanatory Statement pursuant to Section 102 and 110 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 as amended from time to time setting out the material

facts and reasons for the resolutions in respect of the businesses set out above is annexed hereto. A copy of the Postal Ballot Notice is also available on the Company website www.heritagefoods.in, on Company’s

Registrar and Share Transfer Agent (‘RTA’) viz. KFin Technologies Private Limited (‘KFINTECH’) E-voting website https://evoting.karvy.com and at the relevant sections of the websites of the Stock Exchanges on

which the shares of the Company are listed.

2. Members who have not registered their e-mail addresses with either the Company’s RTA or their Depository participant (DP) are requested to register the same with the RTA in accordance with the process specified

herein below at point no. 12B, for procuring user id and password and registration of e-mail ids for E-voting for the resolutions set out in this Postal Ballot Notice.

3. The Portal for E-voting will remain open for the Members for exercising their voting from Tuesday, May 19, 2020 at 09:00 a.m. India Standard Time (‘IST’) to Wednesday, June 17, 2020 at 05:00 p.m. (IST) both days

inclusive. Please note that E-voting module will be disabled for voting by KFin Technologies Private Limited after the said date and time. During this period, the Members of the Company holding shares either in

physical form or dematerialised form, as on Friday May 15, 2020 (‘cut-off date’), may cast their vote electronically. Once vote on a resolution is cast by the member, he/she shall not be allowed to change it

subsequently or cast the vote again.

4. The resolutions, if passed by the requisite majority, shall be deemed to have been passed on the last date specified by the Company for E-voting i.e. Wednesday, June 17, 2020.

5. The Postal Ballot Notice is being sent by e-mail to all the Members, whose name appears on the Register of Members/ List of Beneficial Owners maintained by the Depositories as on cut-off date i.e. Friday, May 15,

2020 and who have registered their e-mail addresses in respect of electronic holdings with the Depositories through the concerned Depository Participants and in respect of physical holdings with the Company’s

Registrar and Share Transfer Agent i.e. KFin Technologies Private Limited. Each Member’s voting rights shall be in proportion to his/ her share of the Paid-Up Equity Share Capital of the Company as on cut-off date.

6. A person who is not a Member as on the cut-off date should treat this Notice for information purposes only.

7. The Board of Directors has appointed Mrs. Savita Jyoti, Partner of M/s. Savita Jyoti Associates, Practicing Company Secretaries (M No: FCS -3738) (CP No: 1796), as Scrutinizer for scrutinizing the E-voting process

and in a fair and transparent manner and Scrutinizer’s decision on the validity of the E-voting will be final.

8. The Scrutinizer shall prepare Scrutinizer’s Report on the total votes cast in favour or against or abstained, if any. The Scrutinizer will submit her report to the Chairman of the Company or any person authorized by

him, after completion of scrutiny of votes received through E-voting. The results of the Postal Ballot will be announced by the Chairman or any person authorized by him on or before Friday, June 19, 2020. The results

of the Postal Ballot will be posted on the Company’s website www.heritagefoods.in and on KFINTECH’s E-voting website https://evoting.karvy.com and will also be communicated to the Stock Exchanges where the

Company’s shares are listed. The Company will also display the results of the Postal Ballot at its Registered Office.

9. All the documents referred to in this Notice and the Statement pursuant to Section 102 of the Companies Act, 2013, will be posted on the Company’s website www.heritagefoods.in to facilitate online inspection of

relevant documents until last date of E-voting of this Postal Ballot i.e. Wednesday, June 17, 2020.

10. As required by Rule 20 and Rule 22 of the Companies (Management and Administration) Rules, 2014 read with the MCA Circulars and the Listing Regulations, the details pertaining to this Postal Ballot will be

published in one English national daily newspaper circulating throughout India (in English language) and one Telugu daily newspaper circulating in Hyderabad (in vernacular language, i.e. Telugu).

11. In compliance with the provisions of Section 108, 110 and other applicable provisions, if any, of the Companies Act, 2013 read with rules made thereunder, Regulation 44 of SEBI Listing Regulations, SS-2 (Secretarial

Standard on General Meeting) and the provisions of the Ministry of Corporate Affairs Circulars, and any amendments thereto, the Company is providing facility for voting by E-voting to all the Members of the Company

to enable them to cast their votes electronically on the items mentioned in the Notice. For this purpose, the Company has engaged the services of its RTA viz. KFin Technologies Private Limited (CIN:

U72400TG2017PTC117649), Selenium Tower B, Plot 31 & 32, Financial District Nanakramguda, Serilingampally Mandal, Hyderabad – 500032, Telangana, India and have made necessary arrangements with RTA

to facilitate E-voting. In terms of the General Circular No.14/2020 dated April 08, 2020 read with General Circular No.17/2020 dated April 13, 2020 issued by the Ministry of Corporate Affairs, Government of India (the

‘MCA Circulars’), voting can be done only by E-voting. The Members are advised to use the E-voting procedure by themselves and not through any other person/proxies. The detailed procedure with respect to E-

voting is as follows.

12. Voting through electronic means:

The instructions and other information relating to E-voting are as under:

A. In case a Member receiving an e-mail from KFINTECH [for Members whose e-mail IDs are registered with the Company/ Depository Participant(s)]:

i. Launch internet browser by typing the URL: https://evoting.karvy.com

ii. Enter the login credentials, i.e. user-id & password, mentioned in the email forwarded through the electronic notice :

User ID For Member(s) / beneficial owner(s) holding shares in demat form:-

a. For NSDL:- 8 characters DP ID followed by 8 digits Client ID

b. For CDSL:- 16 digits Beneficiary ID

c. For Member(s) holding shares in physical form:- Event number (i.e. 5264)+folio number

Password Your Unique password is printed on the Postal Ballot / Electronic notice forwarded through email.

Captcha Enter the Verification code i.e., please enter the alphabets and numbers in the exact way as they are displayed for security reasons

iii. After entering these details appropriately, click on “LOGIN”.

iv. You will now reach password change menu wherein you are required to mandatorily change your password. The new password shall comprise of minimum 8 characters with at least one upper case (A-Z), one lower

case (a-z), one numeric value (0-9) and a special character (@,#,$,etc.). The system will prompt you to change your password and update your contact details like mobile number, e-mail id, etc. on first login. You may

also enter a secret question and answer of your choice to retrieve your password in case you forget it. It is strongly recommended that you do not share your password with any other person and that you take utmost

care to keep your password confidential.

v. You need to login again with the new credentials.

vi. On successful login, the system will prompt you to select the “EVENT”. Please select EVENT of ‘Heritage Food Limited’.

vii. On the voting page, enter the number of shares (which represents the number of votes) as on the cut-off date under “FOR/ AGAINST” or alternatively, you may partially enter any number in “FOR” and partially in

“AGAINST” but the total number in “FOR/ AGAINST” taken together should not exceed your total shareholding. If the member does not indicate either “FOR” or “AGAINST” it will be treated as “ABSTAIN” and the

shares held will not be counted under either head.

viii. Members holding multiple folios/demat accounts shall choose the voting process separately for each folios/ demat accounts.

ix. You may then cast your vote by selecting an appropriate option and click on “Submit”.

x. A confirmation box will be displayed. Click “OK” to confirm, else “CANCEL” to modify. Once you confirm, you will not be allowed to modify or change the votes cast.

xi. Corporate/ Institutional Members (i.e. other than Individuals, HUF, NRI, etc.) are also required to send scanned certified true copy (PDF Format) of the Board Resolution/ Authority Letter, etc. together with attested

specimen signature(s) of the duly authorized representative(s), to the Scrutinizer at e-mail id: [email protected] with a copy marked to [email protected]. The file scanned image/pdf file should

be in the naming format “Corporate Name”. The documents should reach the Scrutinizer on or before Wednesday, June 17, 2020 by 05:00 p.m. (IST).

B. In case of Members of the Company have not registered their e-mail address:

On account of threat posed by COVID-19 and in terms of the MCA Circulars, the Company will send Postal Ballot Notice in electronic form only and hard copy of Postal Ballot Notice along with Postal Ballot Forms and pre-

paid business envelope will not be send to the Members for this Postal Ballot. Accordingly, the communication of the assent or dissent of the Members would take place through the

E-voting system only. Therefore, those Members who have not yet registered their e-mail address are requested to get their e-mail addresses registered by following the procedure given below:

1. In light of the MCA Circulars, Members who have not registered their e-mail address and in consequence could not receive the E-voting notice may temporarily get their e-mail registered with the Company’s Registrar

and Share Transfer Agent, KFin Technologies Private Limited, by following the registration process as mentioned below:

Electronic folios:

(a) Visit the link https://karisma.kfintech.com/emailreg

(b) Select the company name i.e. Heritage Foods Limited.

(c) Member to enter DPID-CLID / Folio No. and PAN.

(d) Member to enter the e-mail id and Mobile No.

(e) System check the authenticity of the client id and PAN and send the different OTPs to Mobile and e-mail to Validate.

(f) Member to enter the OTPs received by SMS and e-mail to complete the validation process. (OTPs will be valid for 5 min. Only).

(g) System confirms the e-mail id for the limited purpose of serviced postal ballot notice.

(h) System will send the notice & procedure for E-voting to the e-mail given by Member.

Physical folios:

(a) Visit the link https://karisma.kfintech.com/emailreg

(b) Select company name i.e. Heritage Foods Limited.

(c) Member to enter physical Folio No and PAN.

(d) If PAN is not available in the records, Member to enter one of the Certificate No.

(e) Member to enter the e-mail id and Mobile No.

(f) System check the authenticity of the Folio No. and PAN/ Certificate No. and send the different OTPs to Mobile and e-mail to Validate.

(g) Member to enter the OTPs received by SMS and e-mail to complete the validation process. (OTPs will be valid for 5 min. Only).

(h) If PAN is not available in the records, system will prompt to upload the duly signed scan copy of the PAN.

(i) System confirm the registration of e-mail id.

(j) System will send the notice & procedure for E-voting to the e-mail given by Member.

Post successful registration of the e-mail, the Member would get soft copy of the notice and the procedure for E-voting along with the User ID and the Password to enable E-voting for this Postal Ballot. In case of any

queries, Member may write to [email protected].

2. It is clarified that for permanent registration of e-mail address, the Members are however requested to register their e-mail address, in respect of electronic holdings with the Depository through the concerned

Depository Participants and in respect of physical holdings with the Company’s Registrar and Share Transfer Agent, KFin Technologies Private Limited, Selenium Tower B, Plot 31 & 32, Financial District Nanakramguda,

Serilingampally Mandal, Hyderabad – 500032, Telangana, India by following due procedure.

3. Those Members who have already registered their e-mail address are requested to keep their e-mail addresses validated with their Depository Participants/ the Company’s Registrar and Share Transfer Agent,

KFin Technologies Private Limited to enable servicing of notices/ documents/ Annual Reports electronically to their e-mail address.

In case of any query/ grievance pertaining to E-voting, please visit Help & FAQ’s section of https://evoting.karvy.com or contact Ms. C Shobha Anand, Deputy General Manager at KFin Technologies Private Limited [Unit:

Heritage Foods Limited], Selenium Tower B, Plot 31 & 32, Financial District Nanakramguda, Serilingampally Mandal, Hyderabad – 500032, Telangana, India, e-mail: [email protected],

Contact No.: +91 40 67162222, Fax: +91 40 23001153 and Toll Free No.: 1800 345 4001.

Place : Hyderabad

Date : May 14, 2020

By Order of the Board of Directors of

HERITAGE FOODS LIMITED

Sd/-

UMAKANTA BARIK


M No: FCS 6317

ANNEXURE TO NOTICE

EXPLANATORY STATEMENT PURSUANT TO SECTIONS 102(1) AND 110 OF THE COMPANIES ACT, 2013

Item No. 1

In terms of the provisions of Section 185 of the Companies Act, 2013 and amendment made thereof, a company may advance any loan including any loan represented by a book debt, or give any guarantee or provide any security in connection with any loan taken by any person (as defined in Section 185 of the Companies Act,

2013), in whom any of the Director of the Company is interested subject to the condition that approval of the Members of the Company is obtained by way of Special Resolution.

Heritage Novandie Foods Private Limited (HNFPL/JV Company) (CIN:U74999TG2017PTC120860) Reg. Office at #6-3541/C, Panjagutta, Hyderabad-500 082, Telangana, India, is a 50:50 shareholding Joint Venture Company between Heritage Foods Limited (HFL), Hyderabad, India and NOVANIDE, Maromme, France with

an object to manufacture and market various types of Yoghurt and other dairy products in India. Both the Companies (HFL & NOVINDIE) was entered a shareholding agreement based on which each Company has nominated two directors on the Board HNFPL to carry out the business of the Company. HNFPL is in the process

of building its manufacturing facility at Survey No 13/2, Durves Village, Palghar District, Near Manor, Maharashtra and to meet the capital expenditure and working capital requirement, HNFPL will approach to the banks / financial institutions for the funding. While banks / financial institutions sanctioning the term loan/working capital

requirement may ask for guarantee/ security from the Company (either HFL or NOVANDIE or from both). As the two Directors of the Company were nominated in the Board of HNFPL as per the shareholders agreement, the provisions of Section 185 of the Companies Act, 2013 may applicable.

Your Board of Directors seek consent of the members by way of a Special Resolution pursuant to Section 185 of the Companies Act, 2013 (as amended by the Companies (Amendment) Act, 2017) for giving guarantee(s), and/or providing security(ies) in connection with any loan taken/ to be taken by HNFPL of an aggregate amount

not exceeding Rs.30,00,00,000/- (Rupees Thirty Crores only) outstanding at any point of time.

The aforesaid amount upto Rs.30,00,00,000/- (Rupees Thirty Crores only) for the time being in force shall be utilized by HNFPL for its Capital expenditure for building of manufacturing facility / working capital requirements including purchase of fixed assets, as may be required, from time to time for expansion of its business

activities and the matters connected and incidental thereto (“Principal Business Activities”), for which the Company shall give guarantee or provide security in connection with the loan taken or to be taken from the bank / financial institutions by the JV Company.

The Board of Directors recommends the resolution as set out in item no. 1 for approval of the members of the Company by way of a Special Resolution.

Except Mr. N Srivishnu Raju (DIN:00025063) and Mrs. N Brahmani (DIN: 02338940) being Directors on the Board of the Company and HNFPL, none of the Directors, Key Managerial Personnel of the Company and their relatives are deemed to be concerned or interested financially or otherwise in the said resolution set out at

Item No.1 of the Notice.

Item No. 2

The Company may have to render support for the business requirements of its subsidiary(ies) or associate(s) or joint venture(s) or any person(s) in whom any of the director of the company deemed to be interested (collectively referred to as ‘Entities’), from time to time. However, owing to certain restrictive provisions contained

in the Section 185 of the Companies Act, 2013, the Company may not extend financial assistance by way of loan, guarantee or security to any Entities. In the light of amendments notified effective May 7, 2018, inter-alia replacing the provisions Section 185 of Companies Act, 2013, the Company with the approval of members

by way of Special Resolution, would be in a position to provide financial assistance by way of loan to other Entities or give guarantee or provide security in respect of loans taken by such Entities, for their principal business activities.

Since some of the above contemplated transactions are not fixed for any particular term, it is not possible for the Company to ascribe an explicit monetary value to such transactions. The members may note that Board of Directors would carefully evaluate proposals and provide such loan, guarantee or security proposals

through deployment of funds out of internal resources / accruals and / or any other appropriate sources, from time to time, only for principal business activities of the entities.

Hence, in order to enable the company for giving loan(s) and/or giving of guarantee(s), and/or providing of security(ies) in connection with any Loan taken/ to be taken by Entities in which Directors are interested directly or indirectly under Section 185 of the Companies Act, 2013 requires approval of members by a Special

Resolution.

The Board of Directors seek the consent of the members by way of a Special Resolution pursuant to Section 185 of the Companies Act, 2013 (as amended by the Companies (Amendment) Act, 2017) for giving loan(s) and/or giving of guarantee(s), and/or providing of security(ies) in connection with any Loan taken/to be taken

by Entities covered under Section 185 up to a sum not exceeding Rs.50,00,00,000/- (Rupees Fifty Crores Only) outstanding at any point of time other than the any amount specifically approved by Board/ Members of the Company for any Entities.

In view of the aforesaid, the Board of Directors recommends the resolution as set out in item no. 2 for approval of the members of the Company by way of a Special Resolution.

None of the Directors or Key Managerial Personnel of the Company and their relatives is concerned or interested, financially or otherwise, in the Special Resolution set out at Item No. 2 except to the extent of their directorship and shareholding in the respective Entities, if any.



Sd/-

UMAKANTA BARIK


M No: FCS 6317

Place : Hyderabad

Date : May 14, 2020



Sd/-

UMAKANTA BARIK


M No: FCS 6317

Place : Hyderabad

Date : May 14, 2020

NATION 13FINANCIALEXPRESS


From the Front Page

Karnatakalockdown 4.0means curbs onthose comingfrom four states

THE DECISION,however,drewa strong reaction from KeralaChiefMinisterPinarayiVijayan,who said he would take it upwiththeCentre,asthedecisionwas“against”itsdirectives.

“Many passengers fromother states to Kerala have to

pass throughKarnataka.If twostates — the one fromwhich aperson begins the journeyandthe other where the journeyends — give clearance for trav-elling,itcannotbepreventedbyanother state in between,”Vijayansaid.

A PTI report said that thedecision follows the recentarrivalofalargenumberofpeo-plefromthesestates,especiallyMaharashtra and Gujarat,and them testing positive inquarantine, leading to a spikein the number of infections in

thestate.Home Minister Basavaraj

Bommai said that the state is“wary of people entering thestate...andaddingtothetallyinKarnataka.”

Yediyurappasaidthatbusesofthestate’sfourroadtransport

corporations would ply fromTuesday,withallprecautionarymeasuresinplace.Privatebuseshave also been permitted tooperateservices,althoughonly30 peoplewould be allowed totravelinavehicleatonetime,hesaid, adding that face masks

and physical distancing aremandatory.

“Strict lockdown measureswill be in force in containmentzones,whileeconomicactivitieswill be permitted in otherareas,” he said. The state willobserve a complete lockdown

onSundays,hesaid.While the restrictions on

autos and taxis are in linewithcentralguidelines,thestatehasallowed saloons and parks,which can remain open from7amto9amandfrom5pmto7pm.

Ahmedabad

CORINNE GRETLERZurich, May 18

CHINAPLEDGEDTOmake itscoronavirus vaccine a globalpublic good once one is avail-able,with PresidentXi Jinpingseeking to defuse criticism ofitsresponsetoapandemicthathas killedmore than 315,000peoplearoundtheworld.

Xi’s comments come amidgrowing concern that coun-trieswillputnationalinterestsfirst in the quest for a protec-tiveshot,seenasthekeytoget-tingeconomiesmovingagain.

“Covid-19vaccinedevelop-ment and deployment inChina,when available,will bemade a global public good,whichwillbeChina’scontribu-tiontoensuringvaccineacces-sibility and affordability indevelopingcountries,”Xisaidina speech to theWorld HealthAssembly, the governing bodyof the Geneva-based WorldHealthOrganization.

TheEuropeanUnion’s ownproposal to the assemblystruck a similar tone, high-lighting the need for all coun-tries to have “unhinderedtimely access” to shots,medi-

cines, diagnostics and anyother technologies needed tofight thepandemic.

Among the dozens of vac-cineprojects underwayworld-wide,Chinahas five candidatesalready in human trials.Morewillentersuchtestsnextmonth.

Thecountryhasfacedrisingscrutinyoveritshandlingofthevirus,especiallyfrommembersof theTrump administration.White House trade adviserPeterNavarro said in a televi-sionappearancethatthecoun-try sent “hundreds of thou-sands of Chinese on aircraft toMilan, New York and aroundtheworldtoseed”it.

China acted with trans-parency and responsibility allalong, and provided informa-tiontotheWHOandcountriesin the most timely fashion,

accordingtoXi.Chinawillpro-vide $2 billion over two yearstosupportthefightagainstthepandemic,especially in devel-opingcountries,he said.

TheWHO said this monththat it’s consideringanewmis-siontoChinatoseekthesourceof the virus. Internationalexpertswere part of a previousdelegationtothecountryinFeb-ruary, at the height of China’soutbreak.“We need to pursueinternational cooperation ontestingmethods,clincal treat-ment,andvaccineandmedicineresearch anddevelopment,”Xisaid.“Weneedtocontinuesup-portingglobalresearchbyscien-tists on the source and trans-missionofvirus.”

The WHO has also facedcriticism from the Trumpadministration that itwas too

deferential to China over itshandlingof the crisis.TheEU’sdraft resolution, backed bycountries including Brazil,Japan and Canada, suggestedevaluatingtheWHO’sresponsetothepandemic“attheearliestappropriatemoment.”

Director-General TedrosAdhanomGhebreyesus saidhewelcomedcalls foranimpartialindependentandcomphrehen-siveevaluation.“Itmustencom-passtheentiretyoftheresponseby all actors in good faith,” hesaidinaspeech.“SoIwillinitiatean independent evaluation atthe earliest appropriatemoment to review the experi-encegainedandlessonslearnedandtomakerecommendationsto improvenational andglobalpandemic preparedness andresponse.” —BLOOMBERG

China’svirusvaccinewillbeglobalpublicgood,Xi saysTheWHO is pushingaproposal that aimsto ensure broadaccess tovaccineswhile offering anappropriate rewardto creators

●AREASONTO HOPE US restriction on chipmakersdeals critical blow toHuaweiASSOCIATED PRESSHong Kong, May 18

THE LATESTUS sanctions ontech giantHuawei threaten todevastate the company andescalate a feudwithChina thatcould disrupt technologyindustriesworldwide.

HuaweiTechnologies is oneofthebiggestmakersofsmart-phones and network equip-ment,but that $123billion-a-yearbusinessisinjeopardyafterWashington announced fur-ther restrictions on use ofAmerican technology by for-eign companies thatmake itsprocessorchips.

Huawei spent the past yearscramblingtopreserveitsbusi-nessafteranearlierroundofUSrestrictions imposed lastMaycutoffaccesstoAmericancom-ponentsandsoftware.

“Ourbusinesswillinevitablybe impacted,”Huawei’s chair-man,GuoPing,saidataconfer-ence onMondaywith industryanalysts.

“In spite of that, the chal-lenges over the past year havehelpedusdevelopathickerskin,and we are confident aboutfinding solutions soon,” Guosaid.ThecompanysaidonMon-day that it would need sometime to “understand theimpact”ofthelatestrestrictions.

The conflict is politicallyexplosive because Huawei ismore than just China’s mostsuccessfulprivatecompany.Itisa national champion amongindustries the ruling Commu-nistPartyispromotinginhopesof transforming China into aglobal competitor inprofitabletechnologies.

On Monday, China’s min-istryofcommercewarneditwillprotect “the legitimate rights

and interests ofChinese enter-prises,” but gave no details ofpotentialretaliation.Beijinghasthreatened in the past to issuean“unreliableentities list”thatmight restrict operations ofAmericancompanies inChina.

FrictionoverHuaweiaddstoa broaderdeterioration ofUS-Chineserelations.

Thetwosideshavedeclaredatruce inatradewar,butargu-ments over the origin of thecoronavirus pandemic that isroilingtheglobaleconomyhaveraisedworries that agreementmightfallapart.

HuaweiisatthecenteroftheUS-Chinese conflict over Bei-jing’s technology ambitions,which Washington worriesmight erodeAmerican indus-trial leadership.

Huawei has few alterna-tives ifWashington refuses toallow its suppliers to use UStechnology.The companyhasdeveloped some of its ownchipsbuteventhebiggestnon-USmanufacturerssuchasTai-wanese giant TSMC needAmericancomponentsorpro-

ductionequipment.“Every electronics system

thatHuaweiproducescouldbenegatively impacted,” JimHandy,semiconductoranalystfor Objective Analysis, said inan email.“Most China-basedalternatives haven’t yet beenestablished.”

New curbs announced onFriday are the third round ofsanctions aimedat cutting offHuawei’saccesstoUStechnol-ogyandmarkets.

Inastatement,Huaweicrit-icised theUSdecisionas“arbi-trary and pernicious” andwarned itwill affectoperationandmaintenance of networksinstalled by the company inmore than170countries.

“The US government hasintentionally turned its backon the interests of Huawei’scustomers and consumers,”it said.

The statement said thedecision“willdamagethetrustand collaborationwithin theglobal semiconductor indus-try,”harming other industriesthatdependon it.

International plane travel creepsbackwith‘bubble’corridorsANGUSWHITLEYSydney, May 18

PLANESAREFLYINGagainona handful of internationalroutes,creatingapossiblepathto recovery for a batteredindustry. But with Covid-19still spreading, aspiring pas-sengerswill have tonavigate apatchy network that mightincludevirus tests andweeks-longquarantine.

This month, China andSouth Korea opened a tightlycontrolled travel corridorbetweenSeouland10Chineseregions, including Shanghai.Estonia, Latvia and Lithuanialifted travel restrictionsbetweenthethreeBalticstatesonMay15.Australia andNewZealand are also working toresume flights between thetwocountries.

The unique accords haveemerged as templates for air-lines that have beenpushed tothe brink by the industry’sworst-ever crisis and for coun-triesdesperate tosalvagesometourism as theworld enters adeep recession. But they also

highlightthebiggestchallengetore-establishinginternationaltravel: there’s little agreementon what kind of protectionscouldlimittheriskofspreadingCovid-19acrossborders.

Lifting quarantinerequirements and reopeningborders is fraught with risk.Returning passengers fromhotspots like Iran, NewYorkandItalyhavealreadysparkedfresh rounds of infection incountries that had seeminglyflattenedthecurve,includingChina and Australia.The factthat people with no obvious

symptoms can still be conta-gious only complicates mat-ters, and given how easily thevirusspreadsandthedifficul-ties of social distancing dur-ing travel, each reopenedroute could spark newwavesof infections.

Airlines andairportsworld-wideareclamoringforacoordi-nated approach; A UnitedNations agency that sets therulesfortheindustry,theInter-national CivilAviationOrgani-zation, plans to deliver globalguidelines by the end of May.

—BLOOMBERG

Nissan’s survival plan for Europe:SUVs and sharingwith RenaultNORIHIKO SHIROUZUMay 18

NISSANMOTORISworkingona plan to scale back its Euro-pean business, focusing onsport utility and commercialvehicles aswell asmore effec-tive sharing of products andinvestments with partnerRenault, three sources toldReuters.

The strategy, part of athree-year global turnaroundplan due to be unveiled onMay 28,would see the Japan-ese carmaker’s plant in Sun-derland, northeast England,switch permanently to twodaily shifts from three, butbecomeakeyhub forSUVs.

It could also see the com-pany’s Barcelona factory inSpain close, putting around3,000 jobs at risk, said thesourceswith knowledge of theplan,whodeclinedtobenamedbecause they are not autho-risedtospeaktothemedia.

Central to the proposal is anew way of working withalliance partner Renault thatwould see the two companiesdivideupareasof responsibil-ity, with one becoming the“leader”andtheotherthe“fol-lower”in each.

Renault and Nissan havelongstruggledtoachievedthefull potential of theiralliance,

due in part to tensions overareas of control.

Relations were thenstrained to almost breakingpoint inNovember2018whenthe alliance’s long-standingboss,CarlosGhosn,wasarrestedin Japan on financialmiscon-ductcharges,whichhedenies.

Nissan’s sales and profitshave been sliding ever since,and the hammer blow to theglobal car industry from thecoronavirusepidemichasonlyadded to the urgency for thecompany to come up with astrategy to secure its future.Renault is alsoworking on itsownrestructuringplan.

The sources said Nissan’splan forEuropewas presentedto the company’s board onThursday by chief operatingofficer Ashwani Gupta, whotheysaidwasthe leadingadvo-cate and key architect of thenewleader-followermodel.

—REUTERS

Aplayboy in lockdown,Dan Bilzerianpushes party brand from social distanceCHRISTOPHER PALMERILosAngeles, May 18

BEFORE MUCH OF theworldshut down, Dan Bilzerianthrewone lastparty.

OnValentine’sDayeve,thesocial media entrepreneurhosted 2,700 guests at hismansion inLosAngeles.Therewas a lingerie contest,a tattooparlor, fire-breathing bar-tenders and a neon-illumi-nated sky diver who jumpedfromahelicopterontothedri-veway. Celebrities in atten-dance included Chance theRapper, singer The Weekndand Blink-182 drummerTravisBarker.

Bilzerian used the bash tolaunchhislatestventure,apre-miumvodka containing alka-line water,which like a lot ofthings he sells these dayscomes emblazoned with abrand name based on theallure of his steamy lifestyle:Ignite.Photos from the event,including Bilzerian dressed in

bright blue gym shorts andsurrounded by scantily cladwomen,were quickly blastedacross the Internet.

Such images have helpedturn the 39-year-old body-builder and former profes-sional pokerplayer into oneofsocialmedia’s biggest celebri-ties,with 31.2million follow-ers on Instagram and some13.8milliononFacebook.Fol-lowinginthefootstepsofothersocial media stars, most

notablymakeupmogul KylieJenner,Bilzerianisnowaimingto build a branded consumer-goods business around hisonline fame.

So far this year, he’s intro-ducedIgnitemineralwaterandIgnite energy drinks. He alsosells Ignite CBD gummies,Ignitebathbombs,IgnitesportscreamsandIgnitepetproducts,such as CBD chew treats andcoat sprays. Where it’s legal,Ignite also sells marijuana

goods, including prerolledjoints,budsandvapepens.

The vehicle for all this isIgnite International BrandsLtd.,apubliclytradedcompanybasedinsuburbanTorontothatis listed on theCanadian Secu-ritiesExchangeunderthetickersymbol BILZ. It has a marketvalueofC$74million($52mil-lion).Bilzerian is chairmanandchiefexecutiveofficer.

Believers in the businessdescribeBilzerianasamarket-inggenius.Butbuildingacon-sumer brand around thebehaviorofone individual canberisky,inpartbecausepeopletend to be more vulnerablethan abstract branding idealsto the pratfalls, temptationsand hazards of human exis-tence.Igniteoffersacasestudyin the costs and benefits ofsuch an approach. Recently,Bilzerian’s nonstop,high-fly-ing Bacchanalian lifestyle hasbeen grounded, face-maskedand brought to a standstill bythe coronavirus pandemic,

trapping the business in asobering, off-brandmoment.It’sunclearifandwhenIgnite’sstyle of unfettered partyingwill beable to resume.

At the same time, a lookinto thecompany’s regulatoryfilings by Bloomberg Newsreveals a repeated blurring ofthe line between Bilzerian’spersonal and corporateexpenses—a pattern that sug-gests Bilzerian’s outsizeappetites could not onlyenliven the vitality of thebrand but also, over time, eatawayat it.

Over the past two years,according to public filings,Ignite has raised tens of mil-lions of dollars. Ignite lost$35.4 million on sales of $7million in the first ninemonths of last year, themostrecent results it has released.OnMay13, the company saidthat its chief financial officerwas stepping down and it hadhired an unnamed replace-ment. —BLOOMBERG

Source: Bloomberg

SkydivingWorld airlines index has plunged more than 50% this year

Bloomberg world airlines index

Index points

May2019 2020

Dec Jan May

50

60

70

80

90

100

110

120

REUTERSWashington, May 18

THE GLOBALECONOMYwilltake much longer to recoverfullyfromtheshockcausedbythe new coronavirus than ini-tiallyexpected,theheadof theInternationalMonetary Fundsaid,andshe stressed thedan-gerofprotectionism.

Managing DirectorKristalina Georgieva said theFundwaslikelytorevisedown-ward its forecast fora3%con-traction in GDP in 2020, butgave no details. That wouldlikely also trigger changes inthe Fund's forecast of a partialrecoveryof5.8%in2021.

In an interview withReuters, she said data fromaround the world was worsethan expected."Obviously thatmeans it will take us muchlonger to have a full recoveryfromthiscrisis,"Georgievasaidinaninterview.Shegavenospe-cifictargetdatefortherebound.

In April, the global lenderforecastthatbusinessclosuresand lockdowns to slow thespread of the virus wouldthrowtheworld intothedeep-est recession since the 1930sGreat Depression. But datareported since then points to"more bad news," Georgievasaidearlierthismonth.

The IMF is due to releasenewglobalprojectionsinJune.The global outlook remains ahuge focus for financeminis-ters from the Group of Sevenadvancedeconomies,whowillmeet remotely on Tuesday,according to theU.S.Treasury.

Georgieva told Reuters theFundwasfocusedonriskssuchas high debt levels, increaseddeficits,unemployment,bank-ruptcies,increasedpovertyandinequalityduringtherecoveryperiod.But she said the crisiswas also boosting the digitaleconomy,offering a chance toboost transparency and e-learning, and give even smallfirmsaccess tomarkets.

Asked about renewed ten-sionsbetweentheUnitedStatesand China - the world's twolargest economies,Georgievasaid she was urging membercountries to maintain opencommunication and tradeflows that had underpinnedglobalgrowthfordecades.

“We do need to keep tradeflowsopen,especiallyformed-ical supplies, food,and longer-termtofindapathwaytoover-comewhat is happening nowwiththiscrisis,"Georgievasaid."Wewant to continue to buildthismoreprosperousfutureforall byovercoming the scarringthatmaycomefromthiscrisis.”

Tensions between theUnited States and China havespiked in recent weeks, withofficialsonbothsidessuggest-ing a hard-won deal thatdefused a bitter 18-monthtradewarcould be abandonedmonthsafter itwas signed.

Georgievawarned againstretreating into protectionismas a result of the crisis. "Weshould not turn away fromwhat has worked for peopleeverywhere:adivisionoflaborand collaboration and trade,whichallowsthecostsofgoodsandservicestogodown,allowsincomes to go up, and allowspovertywithincountries.

‘Abeautiful day’in Italy,as shopsandbars reopenpost lockdownREUTERSRome, May 18

ITALIAN SHOPS, HAIR-DRESSERS and restaurantsfinally threwopen their doorsonMondayasthecountryspedupefforts tobounceback fromthecoronaviruscrisisaftera10-weeklockdown.

Customerscouldonceagainsiptheirmorningcappuccinoatthebar,albeitwell spacedfromotherclients,andpublicMasseswereallowedagaininchurchesafter bishops put pressure onthe government to sanctionreligiousservices.

“I haven’t worked for twoandahalfmonths.It’sabeauti-ful,excitingday,”saidValentinoCasanova, a barman in CaffeCanova in Rome’s centralPiazzadelPopolo.

Almost32,000ItalianshavediedofCovid-19since theout-breakcametolightonFebruary21,the third-highestdeath tollin the world after the UnitedStatesandBritain.

ItalywasthefirstEuropeancountryto imposenationwiderestrictions in early March,only permitting an initialrelaxation of the rules onMay4, when it allowed factoriesandparks to reopen.

Monday marked a major

step forward on the road torecovery,withunlimited travelallowed in individual regions,friends once againmeetingupandrestaurantsabletoserveaslong as tables were at least6.5feetapart.

Telephonesrangincessantlyin hairdresser salons, asunkempt clients rushed tomake themselves more pre-sentable.

“Ialreadyhave150appoint-ments, all very urgent, all ofthem insisting that theymustbefirstonthelist,”saidStefaniaZiggiotto, a hairdresser in theAlpineresortofCourmayeur.“Ihave a full agenda for threeweeks.”

However, many businessowners worried that thereopening might not magicawaytheirmanyproblems,withlingering fears of the coron-aviruskeepingmanyItaliansathome,while foreign tourists,vital for the economy, wereutterlyabsent.

The government has said itwillopenupItaly’sborderswithEurope and allow free travelbetweenthe regions fromJune3,butno-oneexpectsasuddeninfluxofoutsiders.

Monica Robaldo, owner ofthe PierreAlexis 1877 restau-rant in Courmayeur, said shewould not reopen before theendofMay.

BACK PAGE14 FINANCIALEXPRESS

WWW.FINANCIALEXPRESS.COMTUESDAY, MAY 19, 2020

IMFchief: Fullglobal economicrecoveryunlikelyin 2021

Amanwearing a facemask to protect against the corona-viruswalks past aHuawei retail store in Beijing onMonday AP

Chinese President Xi Jinping seeking to defuse criticism of its response to the pandemic

TRAPPINGTHE BUSINESS

Beaches and parks busy asEurope heatwave andUSspring test newCovid rulesREUTERSMay 18

SUMMERWEATHER IS entic-ing much of the world toemergefromcoronaviruslock-downs as centers of the out-break fromNewYork to ItalyandSpaingraduallyliftrestric-tions that have kept millionsindoors formonths.

People are streaming backto beaches, parks and streetsjust as a heatwave hits south-ern Europe and spring-liketemperaturesallowAmericansto shed winter coats. As theyventure out again, most arekeeping their distance andsomearewearingmasks.How-ever,protests are also heatingup fromGermany to Englandto the United States, arguingthe government restrictionsdemolish personal libertiesandarewreckingeconomies.

Greeks flocked to the sea-side on Saturday when morethan 500 beaches reopened,coincidingwith temperaturesof34Celsius (93Fahrenheit).

Umbrella poles had to be 4meters (13 ft) apart, withcanopies no closer than 1meterasthecountrysoughttowalkthefinelinebetweenpro-

tecting people fromCovid-19whilerevivingthetourismsec-tor that many depend on fortheir livelihoods.

“This is thebest thingforuselderly...tocomeandrelaxabitafter being locked in,” YannisTentomas,whoisinhis70s,saidashesettleddownonthesand.

Whitecircleswerepaintedonthe lawn inBrooklyn’sDominoPark in New York City to helpsunbathersandpicnickerskeepasafedistance.

Abouthalfthepeopleinthepark appeared to be wearingsome form of face covering asthey congregated in smallgroups on a warm Saturdayafternoonwith police officersinmaskskeepingwatch.

In Paris' Bois de Boulogne,health training worker AnneChardon was carrying disin-fectantgelandamaskbutsaidshe felt a sense of freedomagain for the first time afterweeksof confinement.

"It's as if wewere in Sleep-ing Beauty's castle, all asleep,allfrozen,andsuddenlythere'slight and space, suddenlywecan experience again the littlejoys of everyday, in the spacesthat belong to us, and thatwe're rediscovering.”

The strategywould seethe Japanese carmaker’splant in Sunderland,

northeast England, switchpermanently to two dailyshifts from three, butbecome a key hub

for SUVs

Ahmedabad

read to lead...2020/05/19 · staff to resume work from...

Documents