COMPANIES, P6 VIDEOCON LOAN COUNTERING HOAXES Modi has delivered, economically and politically, but try telling that to anyone Ajay Tyagi-led Sebi looking into ICICI Bank matter Facebook begins fact-checking photos and videos FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXXXXV NO. 320, 16 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 Tesla will proactively retrofit a power-steering component in all Model S vehicles built before April 2016... The retrofit will typically take around an hour — TESLA'S EMAIL TO CUSTOMERS SHAYAN GHOSH Mumbai, March 30 ANUSHREE BHATTACHARYYA New Delhi, March 30 FOOD TECHNOLOGY FIRM Zomato Media has posted a 108% increase in losses to `585.2 crore in theyearended March 2017, according to filingswiththeRegistrarofCompanies and data platform Tofler. The company had reportedlossesof`280.8crore in FY16.Revenue earned from operations increased 83% to `245.1 crore in FY17 from `134 crore in FY16. In FY17, the company’s earnings from the online food ordering business increased seven-fold to `60.7 crore,while itsubscriptionrevenuedropped fourtimes to just `1 crore. Continued on Page 2 UPPING THE ANTE IN THE fightforEssarSteel,Numetalis trying to get control of Odisha Slurry Pipeline Infrastructure (OSPIL) by repaying Odisha Slurry’s dues to lenders.OSPIL isstrategicallyimportantsince itspipelinescarryironslurryto feed Essar Steel’s plant and without access to this pipeline, running the plant could be difficult. In February, lenders to OSPIL had moved the Delhi High Court seeking a stay on the sale of a 70% stake in OSPIL to Numetal Mauritius. Numetal Mauritius had entered into an agreement to buy a 70% stake in OSPIL from Srei Infrastructure for `4,000 crore. OSPIL is understood to 15,000 10,000 5,000 0 44.20 29.80 16.00 Expenses Finance cost - 5,000 - 10,000 Gross revenue have informed its lenders it proposes to repay their loans by April 30. If the lenders accept Numetal’s offer, the Delhi High Court would need to be informed of the decision at the next hearing on April 5. Numetal, a joint venture betweenRussia’sVTBBankand Rewant Ruia’s trust, has made a bid for Essar Steel under the Insolvency and Bankruptcy Code(IBC),ashasLakshmiMittal’sArcelorMittal. Essar Steel owes lenders GSTR-2 FDA approval for product comes as a boost Strong earnings growth is expected for Sun Pharma from FY19; recent correction has made valuations attractive; upgraded to Buy from Add ■ Investor, P11 Protein engineering may be the future of science Baker pointed out that there are 20 to the 200th possible proteins—more than the number of atoms in the universe. Evolution has produced just a minute fraction ■ Science & Tech, P11 QuickPicks Aadhaar-based e-KYC: UIDAI restores Airtel’s authorisation THE UNIQUE Identification Authority of India has restored telecom operator Bharti Airtel's authorisation to conduct Aadhaar-based verification of its mobile subscribers, subject to specific conditions, sources said, reports PTI. The firm will have to submit quarterly reports on compliance with the Aadhaar Act and adhere to directions issued by UIDAI from time to time. Sources privy to the decision said the suspension on Airtel Payments Bank's eKYC licence has not been lifted. PAGE 6 Indian shipping industry may hit foreign shores to fight slump CAUGHT IN deep waters, the Indian shipping industry may be contemplating converting their ships to foreign registration, potentially causing a loss in taxes to the central exchequer of about `8,000 crore, reports Rouhan Sharma in Mumbai. Anil Devli, CEO, Indian National Shipowners' Association, said Indian shipowners could switch to a foreign flag if the government refrains from offering cargo support to the domestic industry in order to compete with foreign shipping lines. PAGE 6 Profit/ (loss) after tax close to `45,000 crore. Both NuMetal and ArcelorMittal were found to be ineligible to bid under Section 29A of the Insolvency and Bankruptcy Code. The Committee of Creditors (CoC) for Essar Steel decided lastweekitwould only consider applications from bidders who had submitted expressions of interest in the first round. Continued on Page 2 Firms using it to track suppliers Arundhati Bhattarcharya front-runner to head BBB, says a source SUMIT JHA New Delhi, March 30 BANIKINKAR PATTANAYAK New Delhi, March 30 EVEN THOUGH THE triplicate transaction-wisegoodsandservices tax (GST) returns remain suspended,businessesaremaking use of the inward-supplies form, GSTR-2, to guard themselves against audit by the taxman.Taxpayers are now mandated to file only the outward-supplyreturnGSTR-1 and a simple summary interim return GSTR-3B, with which theypaytaxandclaiminputtax credits. However, since the tax authoritiesareaggressiveinverifying the ITC claims by businesses,GSTR-2helpsthemprovide evidence of tax contents in thegoodsandservicestheyconsumed,andtherebyvalidatethe credits claimed. SELF-POLICING ■ Firms use GSTR-2 to validate ITC, avoid tax department's queries ■ GSTR-2 used to ensure suppliers are taxcompliant ■ Firms say government should allow voluntary GSTR-2 filing ■ GSTR-2 filing suspended New Delhi, March 30 GOING BY THE trend since the July launch of the goods and services tax (GST), the Centre’s FY19 GST revenue target continues to look ambitious — the monthly mop-up would need to grow by over a quarter to meet the budget estimate of `7.44 lakh crore. During the July-February Testing times for CBSE NSUI activists and students protest against Union HRD minister Prakash Javadekar PTI over a CBSE paper leak, in New Delhi on Friday. Related report on Page 5 since November but still available for use Filing of comprehensive returnswithattendantinvoicematching facility was suspended following complaints. Continued on Page 2 Forex reserves hit lifetime high GST targets very stiff of $422.53 billion SUMIT JHA period, the monthly average INDIA'S FOREIGN exchange reserves hit a lifetime high of $422.532 billion as on March 23, data from the Reserve Bank of India shows, reports fe Bureau in Mumbai. Reserves rose by $1.197 billion last week compared to the week before. Foreign currency assets, which form a key component of reserves, rose by $1.137 billion from the previous week to $397.294 billion. FCAs are maintained in major currencies like US dollar, euro, pound sterling and Japanese yen, among others. Tax expense/ (benefit) No scrapping of Banks Board Bureau: DFS secy Continued on Page 2 Special Features % change -4,452 FY17 20,000 FY17 -5,643 FY16 Source: RoC filings and Tofler FY16 20,341 FY15 245 134 (` crore, consolidated) 25,000 « THE CENTRAL Board of Excise and Customs (CBEC) has sanctioned nearly `3,000 crore of refunds to exporters during the fortnightly drive starting undertaken by the indirect tax department from March 15 to resolve the issue of pending refunds, reports fe Bureau in New Delhi. This is likely to ease the working capital crunch being experienced by the exporters since goods and services tax (GST) was rolled out on July 1 last year. In a weekly letter to officials, CBEC’s chairperson said that total IGST refund sanctioned till Wednesday was `7,632 crore, which included `5,339 crore cleared for disbursal to exporters before the drive began. 97 136 REPORT CARD « TESLA IS RECALLING ALL Model S cars built beforeApril 2016 to retrofit a powersteering component as the company caps its worst onemonth performance in the stock market since December 2010. The issue, which the carmaker said has not led to any accidents or injuries,impacts only the flagship Model S sedan, not the Model X sport utilityvehicle or more affordable Model 3. The recall affects roughly 123,000 vehi- cles globally. The carmaker said it’s performing the voluntary recall after observing “excessive corrosion in the power steer- 281 OSPIL is strategically important since its pipelines carry iron slurry to feed Essar Steel’s plant 585 15,672 BLOOMBERG San Francisco, March 30 ` crore Revenue Loss « IN THE NEWS CBEC sanctions `3,000-cr refunds to exporters Numetal ups ante, to pay dues of Odisha Slurry Zomato sales rise as do losses « Roughly 123,000 cars recalled over corrosion in power-steering component ing bolts, though only in very cold climates, particularly those that frequently use calcium or magnesium road salts,” according to an email sent to impacted customers on Thursday. “Nonetheless, Tesla plans to replace all early Model S power steering bolts in all climates worldwide to account for the possibility that the vehicle may later be used in a highly corrosive environment,” the electric-car maker said in the customer email. Tesla has been routed this month as analysts and investors have questioned the company’s ability to mass-manufacture its new Model 3 sedan. Bottlenecks at Tesla’s battery factory and assembly plant have undermined that effort, limiting the return on that investment and arousing concern that the company may need to raise more cash.Moody’s Investors Service also downgraded Tesla’s credit rating further into junk on Tuesday. Shares fell 22% this month in New York,the biggest onemonth drop since the year it went public. ESSAR STEEL 23,332 Tesla recalls cars on steering troubles Morbi ● FOOD-TECH 16,178 MODEL S -2,167 MUMBAI, SATURDAY, MARCH 31, 2018 -1,552 Economy faces too many headwinds, very few tailwinds SURJIT BHALLA 5,958 EDITORIAL INTERNATIONAL, P12 5,134 OPINION, P8 GSTcollectionwas a tad below `90,000 crore; assuming nearly half of this — around `43,000 crore — goes to the Centre’s kittty,the shortfall is a huge `12,000 crore a month. The GST regime has so far been running with most of the anti-evasion provisions being suspended. US VISAS Did you tweet against Prez Trump? ASSOCIATED PRESS Washington, March 30 THE US STATE Department wants to require all US visa applicants to submit their social media usernames, previous email addresses and phone numbers, vastly expanding the Trump administration’s enhanced vetting of potential immigrants and visitors. In documents published in Friday’s Federal Register, the department said it wants the public to comment on the proposed new requirements, which will affect nearly 15 million foreigners who apply for visas to enter the US each year.Previously,social media, email and phone number histories were only sought from applicants identified for extra scrutiny,such as those who have travelled to areas controlled by terrorist organisations. An estimated 65,000 people per year are in that category. The new rules would apply to virtually all applicants for immigrant and non-immigrant visas. Continued on Page 2 Continued on Page 2 ENDING SUSPENSE OVER the fate of the Banks Board Bureau (BBB), the finance ministry has said the BBB will continue to existevenafterMarch31,when thetermofitscurrentmembers is to expire. Financial services secretaryRajeevKumartoldFE: “TheBBBwillcontinuetofunction even afterMarch 31.” Kumar, however, declined to comment if current chairman Vinod Rai and other memberswill get an extension or new office bearers will be selected. He said this is ultimately the prerogative of the Appointments Committee of the Cabinet, headed by the Prime Minister. Commenting on the possible candidates to head the BBB, another source said formerState Bank of India chairperson Arundhati Bhattarcharya is among the contenders. However, a final decision could be announced as early as next week. A question mark over the continuation of the BBB was raised after the board, in a report of its work over the past two years, suggested that the finance ministry was sitting over some of its suggestions and sought a more “organic” relationship with it. Continued on Page 2 CYCLE REVERSAL Bucking trend, interest rates on fresh loans tend to stabilise SHRITAMA BOSE Mumbai, March 30 SIGNALLING A DECISIVE reversal in the rate cycle,interest rates on fresh loans have stabilised in recent months. This is a departure from much of 2016 and the first half of 2017, when they were on a downward spiral. Data released by the Reserve Bank of India (RBI) shows the weighted average lending rate (WALR) on fresh loans in the banking system has fallen only about 7 basis points (bps) between June 2017 and January 2018, as opposedtoa50-bpsfallduring the corresponding period a year ago. Lendingratesatpublic-sector banks (PSBs) fell by a mere 2 bps over the seven-month period,while the fall at private banks — at 13 bps — was higher than the average.Rates at foreign banks actuallyhardened during the period under review by 16 bps. Analysts point out the data Fresh lending rates appear to have stabilised Weighted fresh lending rates, March fiscal year ends, Jan 2013-Jan 2018 13 Private sector banks Scheduled commercial banks 12 11 10 9 8 Public sector banks Foreign banks Sep Jan May Sep 2014 2015 Jan May 2016 Source: RBI, Kotak Institutional Equities Sep Jan May 2017 Sep Jan 2018 confirms recent trends of increase in rates on commercial paper (CP) and certificates of deposit (CDs) by 90 bps and 30 bps, respectively, over the last three months. It also corroborates the hikes in retail term deposit rates and the more recent hikes in marginal cost of funds-based lending rates (MCLRs) by banks. Another factor at play has been the drying up of liquidity in the system in the December quarter. An improvement in loangrowth,whichmovedinto double-digit territory in November,hasalsogivensome elbow room to banks to raise rates. These are all factors conducive to an expansion in banks’ margins, according to Kotak Institutional Equities (KIE). In a recent note, the brokerage wrote.“Rising interest rates coupled with improving loangrowthisanidealscenario for banks from a NIM (net interest margin) point ofview.” Continued on Page 2
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