News digest: KYC norms, IL&FS mess, fiscal deficit, Maruti results and more

The autonomy of AI's board will depend on condition that the company will not seek financial support from the govt after 2018-19

Govt plans to give significant autonomy to Air India's board, with a rider

The government is planning steps to give significant autonomy to Air India’s (AI’s) board, in terms of capital expenditure and commercial decision-making. This, along with a debt-restructuring proposal and a financial support of Rs 150 billion, will be part of a package to improve the airline’s operational efficiency.

However, the autonomy of AI’s board will depend on condition that the company will not seek financial support from the government after 2018-19, a top official said.

The plan, which was approved by the Prime Minister’s Office last week, is meant to empower the airline’s board to take important business decisions like buying or leasing new aircraft, raising capital by mortgaging assets, hiring professionals at senior managerial positions, and rationalising the workforce through voluntary retirement scheme. Read more 
 

KYC norms: 1.8 million directors struck off MCA rolls, DINs deactivated

The government has struck 1.8 million directors off the rolls because they failed to comply with know-your-customer (KYC) norms. This means that the director identification numbers (DINs) of these directors have been deactivated. The directors, however, can pay the government a fine and update their KYCs to get their DINs reactivated. Having on board a director with a reactivated DIN will not affect the functioning of a company. 

However, this may preclude any further lapse and the board of directors of all companies will be forced to take compliance seriously.

The remaining directors of the total of 3.2 million have updated their KYC forms. Read more 
 

Maruti Suzuki expected to report first dip in profit after nine quarters

India’s largest carmaker and most-profitable automobile company, Maruti Suzuki, is expected to report its first dip in profit after nine quarters. The dip, analysts said, could be in double digits.

The performance in July-September quarter is said to have been impacted by factors such as lower sales volume, pressure on margins from rising input costs and discounts, and a stronger Japanese Yen. The company will declare the results later this month.

In a trend reversal, the company’s sales volume during the second quarter of FY19 dipped 1.5 per cent to 484,848 units. Read more 

 

IL&FS' total liabilities higher by Rs 260 billion: REDD Intelligence report

It may come as a surprise to Infrastructure Leasing & Financial Services (IL&FS) investors that the total liabilities, including parent liabilities, are estimated higher at Rs 1.31 trillion as of March this year, compared to consolidated liabilities of Rs 1.05 trillion mentioned in the annual report, according to a report. 

According to REDD Intelligence, a stressed debt specialist, loans to subsidiaries or inter-company obligations of an additional Rs 260 billion were not included in the reported accounts. Read more 

 

Ola plans to go Dutch on investor hunt; eyes 50 global cities by 2019
 

Bhavish Aggarwal-led Ola is planning to go to Amsterdam soon, it is learnt. The cab aggregator, which started its global foray with Australia early this year and then added the UK on the Ola map soon after, wants to reach 50 international cities by 2019. 

Uber’s rival is looking at more than just geographical expansion. Its global ambition is an attempt to find a clutch of investors, who could help it raise another round of capital, people in the know said. Read more 

Modi govt confident on meeting fiscal deficit target but faces challenges

The government is confident of meeting the fiscal deficit target for the year and has reiterated that confidence even after the recent excise duty cut on petrol and diesel, which will lead to a total revenue loss of Rs 105 billion. Of this, the Centre will bear about Rs 61 billion, as 42 per cent of the proceeds from duties are passed on to the states. 

While the direct tax collections so far are encouraging, other indicators show the Centre has a formidable task. Going by available trends, there could be a shortfall of more than Rs 1 trillion in its share of the goods and services tax (GST). Read more