OPINION, P8 COMPANIES, P5 EDITORIAL India needs to encourage seedtech firms like Monsanto INTERNATIONAL, P16 SURJIT S BHALLA YET ANOTHER SETBACK STRONG PITCH Huge tax buoyancy underpin the Budget but why spoil this with bad LTCG tax? Adani's Australian coal mine takes hit as one more rail plan axed Indra Nooyi appointed ICC’s first independent female director LUCKNOW, SATURDAY, FEBRUARY 10, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XI NO. 141, 32 PAGES, `8.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 34,005.76 ▼ 407.40 NIFTY: 10,454.95 ▼ 121.90 NIKKEI 225: 21,382.62 ▼ 508.24 HANG SENG: 29,507.42 ▼ 943.85 `/$: 64.40 ▼ 0.14 `/€: 78.87 ▼ 0.18 BRENT: $64.22 ▼ $0.59 GOLD: `30,007 ▲ `126 Fortis Healthcare Intra-day on BSE (`), February 9 165 Prev. close: 126.10 155 148.30 145 135 125 115 123.10 Open Close Shivinder Singh financial year those companies subsequently became part of theSinghs’corporategroup.The loans have since been recognised as related-party transactions and repayment has commenced,the spokesman said in anemailedstatement.Thecompanyalsodeniesthatitsauditor has refused to sign the second- quarterresults. FortisannouncedonThursday that Malvinder Singh is resigning from his executive chairman role and Shivinder Singhissteppingdownasvicechairman.The brothers cited a court judgment relating to the sale of a drugmakertheypreviously controlled, saying their resignation would “free the organisation from anyencumbrances whatsoever that may be linked to the Promoters”. TheCompaniesActrequires board approval for relatedparty transactions, and when they exceed a prescribed size, approval from shareholders is required.Thosewhoauthorisea related-partytransactionwithouttheproperapprovalscanbe punished under law with up to a year in prison or a fine of as much as `5 lakh. A Deloitte spokesman directed questions to Fortis, saying the auditing firm can’t comment on specific client matters due to confidentiality obligations. Fortis,India’ssecond-largest hospital chain, announced on Thursday that it would report bothitssecond-andthird-quarter results on February 13.The company reported cash and cash equivalents of `540 crore as of March 31, compared to `140croreinthepreviousyear. The efforts to address the issue with Fortis’balance sheet come amid mounting legal and financial woes for the Singhs, third-generation magnates of a family that traces its fortune backtopre-IndependenceIndia. ● MOLESTATION CASE Investor Murthy arrested PRESS TRUST OF INDIA Mumbai, February 9 ANGEL INVESTOR MAHESH Murthywas on Fridayarrested in connection with a molestation case,police said. Murthy,52,was arrested in suburban Bandra,they said. Murthy was booked on December 29 under IPC sections 354 (D) (stalking) and 509 (word orgesture intended to hurt the modesty of a woman) and relevant provisions of the Information Technology Act, based on a 32-year-old woman’s complaint, police said. Continued on Page 2 WEAK END Benchmarks again retreat along with the world Sensex falls over 1% to one-month low, Nifty below 10,500-point level; sell-off after more battering on Wall Street S&P BSE SENSEX 34,050 34,002.45 34,000 33,950 33,900 Previous close 34,413.16 33,850 33,800 Open Dow Jones* PRESS TRUST OF INDIA Mumbai, February 9 Close Fall (%) Close 23,860.46 Shanghai Comp STOCKS TRIPPED OVER the growing worries about rise in interest rates and a global rout in equities on Friday, with the benchmarkSensexfallingover 1% to close at a one-month low and the broader Nifty crashing below the 10,500point level. The30-shareSensexclosed 407.40 points or 1.18% lower at 34,005.76.This is theweakest closing since January 4, when it had ended at 33,969.64 points. The broad-based Nifty fell Close 3,129.85 HANG SENG Close 29,507.42 NIKKEI 225 Close 21,382.62 -4.2 -4.1 -3.1 -2.3 by 121.90 points or 1.15% to end at 10,454.95. On weekly basis, the BSE Sensex recorded a steep fall of 1,060.99 points or 3.02% Perovskites have the potential to outshine silicon in solar panels. In time, tandem cells can be made entirely out of layers of perovskites, pushing efficiency up to 36% ■ Science & Tech, P15 QuickPicks Direct tax kitty grows 19% to `6.95 crore in April-January SBI posts first loss in 19 years on higher bad loan provisions FOR THE first time in 19 years, State Bank of India (SBI) on Friday reported a standalone net loss of `2,416 crore in the December quarter of FY18, owing to higher provisions, higher employee cost and lower other income, reports fe Bureau in Mumbai. Moreover, had it not been for a `4,705-crore tax credit, the loss would have been significantly higher. Analysts had estimated a profit of over `2,000 crore for the quarter, based on data collated by Bloomberg. The bank's provisions more than doubled to `18,876 crore y-o-y in Q3. PAGE 10 NITI Aayog-World Bank health study puts Kerala in top spot NITI AAYOG'S Health Index has put Kerala on top among large states on overall health performance, while Uttar Pradesh appears at the bottom though it has shown big improvement in the recent past, reports PTI. Kerala was followed by Punjab, Tamil Nadu and Gujarat, according to the report — 'Healthy States, Progressive India: Report on Rank of States and UTs'. Rajasthan, Bihar and Odisha are among those which have performed poorly on the index. Among the smaller states, Mizoram ranked first followed by Manipur and Goa. PAGE 3 FE BUREAU Mumbai, February 9 TATA STEEL ON Friday reported a nearly fivefold jump in its consolidated net profit to `1,136 crore for the three months to December, though still below Bloomberg consensus estimates of `1,288.1 crore. Exceptional charges of `1,116 crore due to provision recognised in respect of cerConsolidated figures (` crore) Net sales Ebitda tain demands and claims from regulatory authorities relating to mining operations hit profit. In the December 2016 quarter, the steel maker reported a net profit of `232 crore. Net sales in Q3FY18 grew 15.23% year-on-year to `33,447 crore, much above the consensus estimates of `32,027crore. Continued on Page 2 Q3FY17 Net profit Q3FY18 % change « THE DIRECT tax collection for April-January grew by 19.3% to `6.95 lakh crore, against the required 18.3% growth for full year, to meet the revised estimate target of `10.05 lakh crore in the current fiscal, the government said on Friday, reports fe Bureau in New Delhi. In the Budget presented earlier this month, the government revised the direct tax collection target upwards from `8.5 lakh crore. For the 10 months of the fiscal, the net collections for corporate income tax grew by 19.2% while personal income tax mop-up rose by 18.6%. PAGE 2 Tata Steel profit jumps fivefold Ebitda margin (%) 13 17.3 430 bps Steel deliveries 15.23 (million tonnes) 59 5 times 6.07 6.56 8 Source: Company Fall (%) Close 23,63.77 Taiwan TAIEX Close 10,371.75 SENSEX Close 34,005.76 Jakarta Comp Close 6,505.52 -1.8 -1.5 -1.2 -0.6 - while the broader Nifty lost 305.65pointsor2.84%—their worstweeklyfall sinceAugust. Continued on Page 2 ● BUDGET PROMISE MSP: Govt to adopt A2+FL formula FE BUREAU New Delhi, February 9 corner a share of India’s digital payments market, which saw transactions worth `56,600 crore in 2017 calendar year.Of the present flock, Google, through itsTez application,has been the most aggressive, garnering users by offering cashbacks and otherfreebies. According to a recent report by Credit Suisse, in the four months since the launch of Tez inSeptember,Googleisalready processingthesamenumberof digital transactions as Axis Bank — the fourth-largest digital playeramong banks. FINANCE MINISTER ARUN Jaitley on Friday told the Rajya Sabha that the Budget announcement on ensuring farmers minimum support prices (MSPs) of kharif crops at one-and-a-half times of their costs will be based on the A2+FL costs,and not the more ambitious C2 costs formula favoured by farm scientist MS Swaminathan. But, as shown in a comprehensiveanalysisbyFEonThursday, the MSP-based deficiency payments based on 1.5 times the A2+FL costs could cost the exchequerabout`80,000crore evenonconservativeestimates, if the government is unable to procure all crops at MSPs. Importantly,thedeficiencypayment system is fraught with risks,as demonstrated in Madhya Pradesh where traders are suspected to have manipulated themarkets.Also,higherdomesticpriceswoulddentourexport competitiveness in agriculture when the Budget wants to realise annual farm export potential of $100 billion (from $30 billion now). The A2+FL formula takes into account actual cost plus imputed value of family labour in the production of a crop.But theC2formulafactorsinalotof costs,includingimputedrenton land and interest on capital, whichmakesthecostofproduction much higherthan the level on which the Commission for Agricultural Costs and Prices bases its recommendations. Continued on Page 2 Continued on Page 2 Bid for glory An assistant holds a 102.34 carat white diamond at Sotheby's in London. The flawless diamond, the size of a large strawberry, is expected to fetch a world record price due to its rarity when it comes to market this month ● DIGITAL DRIVE Now, WhatsApp logs in to UPI FE BUREAU Mumbai, February 9 FORGETMESSAGES, IMAGES andvideos,nowyou canWhatsApp your money too. WhatsApp on Friday enabled an option to make payments through the app using the Unified Payments Interface (UPI) for select users. The payment option has been enabledwith ICICI Bank as the banking partner. Facebook-ownedWhatsApp joins Truecaller and Google in theleagueofmultinationalcorporationsthathaveenteredthe fast-growing UPI ecosystem to FAST MONEY ■ UPI saw transactions worth `56,600 cr in 2017 ■ Volume of transactions soared to 145 m in Jan from 40 m in Sept after launch of Google Tez ■ WhatsApp has 230 m users in India ■ Google Tez now seeing 75 m transactions/month ■ Earlier, BHIM launch in December 2016 boosted UPI usage TECHNICAL FOCUS Machines could make the stock market sell-off in the US worse REUTERS New York, February 9 MACHINE-GUIDED, NUMBERS-OBSESSED fund managers could cause US stock pricestoweakenfurtherasthey adjust to the return of wild gyrations in global markets. Several years of generally low volatility, when shares have not experienced big dayto-day oscillations,in part due to money-printing and bondbuying policies pursued bythe world's major central banks, has led investors to shovel billions of dollars into some highly technical and riskfocused strategies. “Therewill be forthe rest of thisweek a systematic selling,” from funds that each chase such trends in the market,said JerryLucas,seniorstrategist at UBSAGWealthManagement’s Chief Investment Office. These volatility-contingent strategies include volatility control funds, riskparity funds, commodity trading advisers and trend ILLUSTRATION: ROHNIT PHORE A new type of solar cell is coming to market KOSPI *As on February 8 THIRD-QUARTER NUMBERS Special Feature Intra-day, Feb 9 34,005.76 34,100 Continued on Page 2 1,136 THE DRAFT NOTIFICATION to amend rules for driving licences proposes Aadhaar as one of the documents that can be submitted for address and age proof, reports PTI. “If an applicant does not have Aadhaar, there is a provision for submission of other documents like passport, insurance policy, etc,” law minister Ravi Shankar Prasad said. THETYCOON SINGHbrothers took at least `500 crore out of the publicly-traded hospital companytheycontrolwithout board approval about a year ago,people with knowledge of the matter said. The funds were reported on the balance sheet of Fortis Healthcare as cash and cash equivalents,but the moneywas routed and placed under the controloftheSinghsatthetime, according to the people. Fortis’ auditor,DeloitteHaskins&Sells, refused to sign off on the company’s second-quarter results until the funds were accounted for or returned,the people said, askingnottobeidentifiedasthe information is private. Itwasn’t immediatelyclear whattheSinghsmayhaveused the funds for. Fortis founders Malvinder Singh and his brother, Shivinder, have been workingtopaybackthemoney so the company can release its results,the people said. A spokesman for Fortis said thecompanyloaned`473crore to “certain corporate bodies in normalcourseoftreasuryoperations” as of July 2017, and in the third quarter of the current Malvinder Singh 232 Driving licence: Aadhaar to be age, address proof BLOOMBERG Mumbai, February 9 5,801 THE I-T DEPARTMENT urged those who deposited “large amounts of cash” after the note ban and companies to file returns by March 31, failing which they may face penalty and prosecution, reports PTI. It also cautioned eligible trusts, political parties and associations to file their ITRs by this final deadline and “come clean”. Brothers working to repay the money; development comes amid mounting legal and financial woes 3,647 DeMo depositors, companies must file ITRs by Mar 31 Singhs took `500 cr from Fortis: Sources 33,447 THE GOVERNMENT IS considering removing the export duty on sugar to boost shipments in view of a fall in the domestic prices on an estimated rise in production, food and consumer affairs minister Ram Vilas Paswan said, reports PTI. At present, there is a 20% export duty on sugar. In view of rise in output, he said the government has doubled the import duty to 100% to check cheaper imports from overseas markets. RELATED-PARTY DEAL 29,025 IN THE NEWS Centre mulls scrapping export duty on sugar followers, analysts said, although it was unclear what their impact was in Thursday’s stock market sell-off. With the recent return of stock market gyrations, such funds are expected over time toshedrelativelyriskierassets, such as equities,in some cases to achieve a constant level of volatility,those analysts said. US stocks have made wild swingsthisweekamidanoverall sharp decline.The S&P 500 index's3.75%fallonThursday meant the index has techni- cally entered a correction, defined as a 10% fall, since it reached a record high on January 26. BNP Paribas strategist Anand Omprakash saidThursday’s rout in US stocks was likely partly driven by some systematicstrategiesthathave short reaction time horizons. “When markets start to become volatile,they basically have to start selling equities,” Omprakash said. Continued on Page 2
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