121 entities including IL&FS, Kingfisher, Helios & Matheson, United India Insurance, Sahara Q Shop, Ruchi Soya, Sterling Biotech, Heera Gold, Religare, Fortis and DS Kulkarni under SFIO scanner for Frauds and Illegal Transactions
The Serious Fraud Investigation Office (SFIO) is investigating as many as 97 entities including Infrastructure Leasing and Financial Services Ltd (IL&FS), Kingfisher Airlines Ltd, Helios & Matheson Information Technology Ltd, Sahara Q Shop Unique Products Range Ltd, Delhi and District Cricket Association (DDCA) among others, reveals a reply in the Lok Sabha.
 
"The ministry of corporate affairs (MCA) has ordered investigation against such companies where they are allegedly involved in fraudulent activities including through illegal accounts or transactions," says PP Choudhary, minister of state for law and justice and corporate affairs, in a written reply. 
 
According to the minister, in case of 24 companies, the SFIO has completed investigation and had filed prosecution against the company and its directors and promoters. Three members of parliament (MPs), Rajesh Pandey, Ravindra Kumar Pandey and Nishikant Dubey had asked the question on illegal accounts and transactions carried out by companies and action taken by the government. 
 
Mr Choudhary said, during FY15-16, the ministry ordered investigation against 25 companies, out of which it has filed prosecution on four cases. SFIO was handed over probe of about 30 companies in FY16-17. During the next year, SFIO investigated 33 cases out of which in two cases the investigation has been completed and action has been taken. In current financial year (FY18-19), prosecution has been filed against seven companies and their directors under various provisions of the Companies Act. These companies include, Unity Infra Projects Ltd, Zen Shaving Ltd, Birla Pacific Medspa Ltd, Usha Martin Telematics Ltd, Usha Mutual Benefit Society Ltd, Woodland Retail Pvt Ltd, Nava Diganta Capital Services Ltd and Nava Diganta Agro Industries Ltd. In the current fiscal year, filing of prosecution against RTC Properties India Ltd and Anatnath Vincom Pvt Ltd is under process.
 
Here is the list of companies under the SFIO scanner...
 
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COMMENTS

Mahesh S Bhatt

5 months ago

Better late then never Mahesh Bhatt

Dayananda Kamath

5 months ago

There are other ways also of concealing NPA. Nationalised banks issue guarantees to PSUs for the limits availed by them with other financiers and enhance the guarantee limit including unserviced interest periodically since long time. Will they investigate.

R Balakrishnan

5 months ago

Doubt if the SFIO has the headcount and head contents to investigate. Most of the cases will go unsolved in to perpetuity

mahesh

6 months ago

all HAVE CHEATED INNOCENT PUBLIC, GOVT. DOES NOT PUNISH THEM, PUBLIC NEVER GETS MONEY BACK, DIRECTORS START SOME OTHER BUSINESS AND KEEP ON CHEATING, PROCESS IS SLOW AND IN-EFFECTIVE, JUSTICE DELAYED IS DENIED. GOVT. MUST TAKE FINANCIAL FRAUDS SERIOUSLY PL.

Report Sees Corporate Revenue Growth Down at 12%-13% in Q3 on High-Base Effect; Cost Pressure
Corporate revenue growth is expected to print at 12%-13% on-year for the third quarter of this fiscal ended 31 December 2018, or 400-500 basis points (bps) lower than the about 17% on average in the first two quarters, predicts CRISIL. “That’s primarily because of the high-base effect created by the 13% growth seen in the third quarter of last fiscal, which followed around 7% in the preceding two quarters,” says the report. 
 
Prasad Koparkar, senior director, CRISIL Research says, “Commodity and infrastructure-linked sectors are expected to support revenues for the quarter ended December. Steel, cement, natural gas and petrochemicals are expected to be driven by volume and/or realisation growth, while sectors such as construction and capital goods are expected to grow on a pickup in execution of key infrastructure-led government schemes. In consumption spending-led sectors such as airline services and retail, revenues will be supported by positive demand sentiment, while in export-oriented segments such as IT services and pharma, the boost would come from a weak rupee on a y-o-y basis.” 
 
 
Growth in operating profit (EBITDA) or earnings before interest, tax, depreciation and amortisation, is also expected to print lower, at just below 10% year-on-year compared with about 15% over the three quarters preceding. 
 
Linked to this, India Inc is expected to report a margin contraction of around 50bps year-on-year for the quarter amid rising raw material costs across sectors. 
 
 
The forecast is based on CRISIL Research’s analysis of 362 companies, which account for ~67% of the market-capitalisation of the National Stock Exchange, excluding banking, financial services and insurance (BFSI) and oil sectors. 
 
However, overall revenue growth will be constrained by a demand slowdown in automobiles, sugar, aluminium and telecom services, according to the report. Automobiles revenue is expected to have been impacted by a rise in ownership costs, while the other sectors would bear the impact of lower realisations and competitive pressures. 
 
Even with healthy top-line growth, CRISIL expects to face dampened profitability at the operating level with rising input prices building pressure on the cost structure. Despite softening of commodity prices and a weakening of the rupee towards the end of Q3 FY18-19, the prices of most common commodities remain high on-year. Having said that, the full impact of the softening may be visible in the fourth quarter of this fiscal.  
 
 
Says Rahul Prithiani, director, CRISIL Research, “Domestic prices of coal, long steel, flat steel and aluminium are expected to have risen 13%, 15%, 18% and 6%, respectively, on-year in the third quarter. Additionally, oil prices are expected to print 10-11% higher even as rupee depreciation would be ~11% on-year. Limited ability to pass through increased input prices to end customers in sectors such as airlines, cement, retail and telecom due to competitive pressures and high sensitivity to price movements will also accentuate pressure on the margins.”
 
Industry Outlook  
 
In airline services, aggregate revenue of the sample is expected to increase 16%-18% on year-on-year in the third quarter of fiscal 2019 on the back of a strong growth in passenger traffic, primarily in the domestic sector. In cement, aggregate revenue across large-, mid- and small-sized players is expected to witness a growth of ~10%. In the fast moving consumer goods (FMCG) segment, CRISIL expects year-on-year aggregate revenue growth of 7%-9%.
 
In IT services sector, the rupee’s depreciation against the dollar so far this fiscal would likely boost the sector’s revenue, as per the report. In pharmaceuticals, a favourable domestic market and new product launches,  coupled with the rupee’s depreciation are expected to support revenues for both large- and mid-sized formulation players, whereas in power, increased demand is expected to generate 6%-7% higher revenue. In steel products, revenue for the quarter is expected to witness robust 25%-30% growth, led by healthy volume growth and higher steel prices.
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Hotel Industry To See 7%-9% Growth in Revenues for FY18-19: Report
Riding on the back of economic growth due to recovery in the global conditions, resulting in higher movement in the meetings, incentives, conferences and exhibitions (MICE) segment, and the consistently growing middle class having increasingly disposable incomes and a fondness for travel, the hotel industry is expected to post a robust growth of 7%-9% in FY18-19, according to a report by CARE Ratings. Another factor named by the report as a driving force for growth is India’s attractiveness as a medical tourism destination.
 
“The Indian hospitality industry has emerged as one of the key industries driving the growth of the services sector and, thereby, the Indian economy,” says the report.
 
At the close of 2018, the country saw macroeconomic stability owing to a decline in inflation, and current account deficit (CAD). The Union budget had identified some major pillars that will support economic growth for the country that includes tax reforms, fiscal discipline, investment in infrastructure, ease of doing business, agriculture and farmer welfare, rural sector, social sector, education and job creation. This is said to have translated into an overall pick up in economic activities, thereby having a positive impact on the demand for hotels in the country.   
 
According to India Brand Equity Foundation (IBEF), the tourism and hospitality sector’s direct contribution to GDP surged by 23.6% in 2017, raising the share of the industry (direct & indirect) to Rs5.9 trillion ($91.3 billion). “Also, tourism in India accounts for 9.4% of the GDP and is the 3rd largest foreign exchange earner for the country and ranked 7th in terms of tourism total contribution to GDP in 2017,” says the CARE report.
 
“The expected future inventory in 11 major markets across categories (only branded) is low at around 49,380 rooms for the next five years (FY18-23).Therefore, with increasing demand on the back of improvement in economic activities and lower room additions, we expect the major markets in the industry to sustain the average room rates (ARRs), going forward, and grow at an average of 3.5-4.5% per annum. Also, we expect the occupancy to inch up to an average of about 68-70% by the end of FY23 compared with 66.6% in FY18,” says the report.
 
The existing room supply for the country grew by 7.5% in FY17-18 totalling to 128,163 rooms (as of 31 March 2018) according to the report. This considers the 8,944 new rooms that entered various markets during the year, as well an expansion of the existing properties.
 
Kolkata saw the highest increase in supply (20.7%) in FY17-18, adding to the relatively small base of hotels, followed by Chennai (10.5%) and Ahmedabad (8.9%). 
 
 
Among the 11 selected cities, Mumbai's hotel market achieved the highest occupancy recorded over the past few years amongst all major markets across the country and also recorded the second highest average room rate (Rs7,740), further consolidating its position as the best performing hotel market in terms of RevPAR too. 
 
Accordingly, the hotels industry is expected to see an increase in room revenue at the rate of about 10%-12% CAGR over the next five years.
 
The report names complex regulatory environment and inadequate tourism infrastructure among the challenges facing the industry.
 
Goods and services tax (GST) has been implemented from 1 July 2017, with the aim of replacing the indirect taxes on all goods and services. Initially, room tariff above Rs5,000 was to attract the higher tax rate of 28%, which has been revised now and only tariff above Rs7,500 would fall in the highest tax slab under the GST regime. 
 
“Accordingly, we at CARE Ratings believe that the effective tax rate would not have any major impact on the average room rates (ARRs) and occupancy rates (ORs) of the hotels, given that GST players would be able to avail the input tax credit for both goods and services,” the report says.
 
Alternatives to the premium hotel segment have been listed by the report to include time-sharing as a form of vacation ownership of property, wherein units may be on a partial ownership, lease or a ‘right to use’ basis where the sharer has no claim to the ownership of the property. The other option mentioned is the service apartments, which are fully furnished apartments available for short-term or long-term stay, providing all the luxuries of a premium hotel such as room service, laundry service, fitness centre, etc, and have larger rooms and more space at a far more competitive rate.
 
Customers of the hotel industry are classified by the report under the heads of business traveller, leisure traveller and airlines cabin crew, each displaying varied demand dynamics. The report also highlights the cyclical nature of the industry, pointing out that during positive cycles the industry witnesses periods of sustained growth and sees healthy average room rates (ARRs) and occupancy rates (ORs) which fall in the lean seasons.   
 
Elaborating on the pattern of revenue generation, the report notes: “While the macro-economic factors affect the business destinations (RevPARs – revenue per available room, growth is sensitive to the macro-economic indicator such as the nominal GDP), the leisure destinations show a greater sensitivity to non-economic factors such as terror attacks, health related travel warning, etc. (decline in FTA in 2008-09 was largely on account of the Mumbai terror attacks on November 26, 2008 and the swine flu linked travel advisories). Consequently, the average RevPARs of 12 major cities had registered a decline of about 13.9% in 2008-09 and 9.7% in 2009-10. While in 2010-11, with higher growth in nominal GDP and an increase in FTAs post-recession, these 12 major cities recorded an average increase of about 2.6% in RevPARs. Similarly, due to increased domestic and international trade activities and various initiatives taken by the government post 2015-16, the number of foreign travellers in the country has increased. This has been reflecting in the overall RevPARs in India that registered a CAGR growth of about 5% between 2014-15 and 2017-18.”
 
 
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