Guru Brahma

           In Sanatana Dharma, a teacher is given the status of God. The sloka “Guru Brahma, Guru Vishnu, Guru Devo Maheshwaraha, Guru Sakshat Para Brahma,  Tasmaishree Gurave Nahamha”  means Guru is the representative of Brahma, the Creator of knowledge,  Vishnu, the Sustainer of wisdom and Shiva, the Destroyer of darkness, Guru is the Almighty to whom we bow before, the Para Brahma.  In the Skanda Purana, Lord Shiva tells Maa Gauri that enlightenment is possible only with the help of a Guru thereby pupil is shown as dependent on Guru and in Bhagvata Purana, Krishna says that Guru is one who provokes insight indicating the independence of the student. Both these highlight the importance of a teacher in our life for attaining knowledge that provokes thinking.

In today’s context, Guru could be a school teacher, university professor, sports coach, dance or music teacher, fitness trainer or coordinator in a short or medium term courses. He could be a teacher just for an occasion. Still, he/she deserves respect and devotion. Following incident from Ramayana clearly brings out how a student need to conduct himself with a teacher.

Lord Rama, after hitting Ravana with the arrow, asked Lakshamana to go to Ravana and obtain as much knowledge possible from him before he finally breathes. Ravana, son of a Rishi, is a well educated person and is a scholar of the Vedas and is considered as an expert in astrology and a great devotee of Lord Shiva. Obeying the orders of Lord Rama, Lakshmana visited Ravana standing near his head said “Oh Ravana! Before you leave for heaven, please share your knowledge”. But Ravana did not even look at him. Lakshman returned to his brother and said Ravana was not interested in sharing anything. After learning that Lakshmana stood near Ravana’s head, Rama told Lakshmana “If you want Ravana to teach, you better behave like a student”. Looking at the hesitant Lakshmana, Rama accompanied him to fatally wounded Ravana. Standing at his feet with folded hands, Rama said “Hey Brahmana Putra and King of Asuras, I have no ill feelings towards you. I fought with you to release my life partner from your custody as it is my royal, personal and moral duty to do so. I know you are a great scholar and have great regard for your wisdom and it would be my privilege and blessing if you could teach me and my brother something before you depart for heaven”. Enormously impressed with the conduct of Rama, Ravana proceeded to teach the brothers importance of avoiding things which are inherently bad, but attractive and of avoiding procrastination to do good things which are unattractive. Saying this, Ravana breathed his last. Rama dutifully bowed to his teacher.

This story underlines the importance of giving due respect to a teacher, even if he/she is bad for you. A teacher is the highest contributor in making us better human beings, helping us grow out mentally and socially. It is a teacher who guides and nurtures our talent.  Parents look up to the support of a teacher for shaping the future of their child. It is a great responsibility on the part of the teacher and they should do justice to this honorable position. Hitting and scolding of children in front of their friends should be avoided. New and improved methods of teaching should be adopted by them for the purpose of seeing better results.

Some people think that teaching is an easy and appealing job. However, a teacher’s actual effort, most of the time, is unseen to most of us. Sincere teachers prepare for hours together for taking an hour’s class despite their ease with the subject. Setting exam papers, evaluating them and then grading require lots of time and effort. While doing these things, they need to upgrade and update with the current happenings in their field so as to give the best and latest information on the topic to students. Dealing with rebel students and complaining parents is another headache and in higher educational institutions the menace of consumption of drugs and alcohol is adding to the woes of the teaching community. Lack of respect from students and the absence of support of managements make their jobs horrific at times. Talk to a teacher, they tell you how taxing the profession is.

Children, parents and society at large have a duty to keep this noble profession in high esteem. This is possible only when we suitably recognize and respect teachers so that their motivation levels remain high and continue to contribute meaningfully nurturing the destinies of our children at the schooling stage and focus on research at the university level. Motivated teachers can do wonders for the nation building.

Teachers’ Day is celebrated world over on October 5. However, we in India celebrate it on September 5, the birthday of a renowned scholar, teacher, writer, administrator, the first Vice President and the second President of the country and above all a great man Dr. Sarvepalli Radhakrishnan. A teacher of philosophy, when his friends approached him to celebrate his birthday after his appointment as the second President of India in 1962, he advised them that “Rather than celebrating my birthday, it would be my proud privilege if 5^th September is observed as Teachers’ Day”. He wanted this to pay tribute to the greatest teachers who made a remarkable contribution in the field of education. Dr. Radhakrishnan is born in a Telugu family. He studied at the University of Madras, taught at the University of Mysore and the University of Calcutta. He served as Vice Chancellor of the Banaras Hindu University, Varanasi and my alma mater Andhra University, Visakhapatnam. He authorized several seminal works on philosophy and religions. He is the brightest luminaries of Hindu philosophy and a champion of Sanata Dharma. He is the earliest recipient of our country’s highest civilian award Bharat Ratna in 1954. It is indeed a great privilege for all of us to celebrate his birthday as Teacher’s Day.

Happy Teacher’s Day!

Jalebi Flying

     Visiting Chandni Chowk is a gastronomic delight for food lovers.  Street food choices available there are known for their well-knownness.  Parathawali Gali,  Chaat Corners, Kachori Wala, Natraj Dahi Balle,  Old Famous Jalebi Wala the list goes on. Last visited the place was on a wintry Sundry afternoon in the third week of January when the redevelopment was in full swing. The mantra of staying home to fight the novel virus is keeping us away from these occasional privileges. Post Corona acquired culinary skills encourage one to try at home whatever one is missing otherwise. I found some home cooked dishes like kebabs, pulao, sambhar taste almost similar to those at regular eateries.

Eating one’s own cooking has a different charm and never spoils the stomach. That reminds what Winston Churchill once said “eating my own words has never given me indigestion”. The newly trained courage and the encouragement from friends made me try jalebis at home. After observing couple of You Tube tutorials and reading literature on the dish, I decided to take the plunge.

The batter was ready, its consistency appeared alright, neither thin nor thick. When I started dropping into the heated oil from the neatly cut small hole of a tightly packed pouch, trying to make circles, it started making its own rounded mini pancake shape.  Finally, I could feel the taste of jalebi but not the kick of having it at a roadside shop. One thing is clear that the batter is not in your control once it starts to dive into the hot oil especially when you happen to be a novice. A couple of attempts will surely give you the requisite experience to get the desired Jalebi shape. But that is not the case with airline industry. Despite acquiring nearly hundred years of experience in running the business of flying machines, commercial aviation industry’s woes see no end. Barring a few carriers across the globe, most of the companies went belly up after running for a few years.

        Aviation industry is always known for its failures than success stories. Even operationally successful companies do not make financial profits. Billionaire investor Warren Buffet once said “Investors have poured their money into airlines and airline manufactures for 100 years with terrible results. It has been a death trap for investors”. His own investments in US Airways in 1989 tuned unexciting. He told shareholders in a 2007 that “if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.” Kitty Hawk, a beach town in North Carolina State witnessed the experimental flight trials by Wright brothers in the early years of last century.

Investors tend to change their views on businesses when new facts and circumstances emerge, especially when the business’s ability to maintain competitive advantage over its peers in order to protect long term profits and market share. Warren’s restraint on the sector changed after 15 years. He tested his luck in the sector in 2016 when the airline sector in US consolidated after several bankruptcies and mergers and emerged as an oligopoly with four airlines namely American Airlines, Delta Air, Southwest Airlines and United Airlines grabbing two thirds of the market share in that country and declaring better numbers year after year. Berkshire Hathaway’s interest in the aviation industry was based on the sector’s overall improved financial performance of these four carriers declaring a combined profit of $22 billion in 2015 attributed to lower fuel prices, better labour relations and higher fees for check-in baggage and more importantly reduced competition due to consolidation. By 2019, Berkshire’s shareholding went up to nearly 10 per cent in these four airlines. Until end 2019, these four airlines were reporting healthy profits.

The pandemic induced lockdown has changed everything. Nearly 17,000 aircraft world over parked at various airports without maintenance and upkeep. By the middle of April this year the situation appeared rather alarming for the entire travel industry. Berkshire offloaded its securities in all these airlines by the end of April fearing a catastrophic impact on the industry.

The airline industry remains on edge at every event, whether an oil price hike due to shortage or war like situation, man-made or natural disasters, nothing to write about when a Black Swan event like the corona pandemic unfolds.

       In India, a lot of private airlines commenced services after permitting them to operate charter and non-scheduled back in 1986 by amending the Air Corporation Act, 1953 and then repealing the very Act from the statute book in 1994 for beginning scheduled services. Those entered the fray were Air Sahara, Damania Airlines, East West Airlines, Modiluft and NEPC airlines in early 90s.  All of them vanished after operating for a few years. Jet and Sahara Airways obtained licenses to operate scheduled services. Jet Airways continued till 2019 and is now at the mercy of competing bidders to take over it in the on-going Corporate Insolvency Resolution Plan under the aegis of a Committee of Creditors constituted by NCLT. Besides Interglobe Aviation (operator of Indigo), and Spice Jet, Jet Airways was one of the very few airline companies raised capital from the public through an Initial Public Offering.

Despite capturing nearly 50 percent of the market share in India, Interglobe reported a net loss of Rs.870 crore for the quarter ending March 2020, exhibiting the devastating impact of the pandemic on the air travel even before the imposition of lockdown. How the first quarter pans out is anybody’s guess.

            While praying for the virus to loose its potency, I will keep on my efforts at perfecting the art of getting jalebi in better shape.

Come on!

The Covid pandemic and the lockdown imposed to contain the virus spread have impacted businesses across the globe.  The degree of impact is largely uneven. Essential goods suppliers, services providers, medical and pharma companies are lucky to escape the hit. Several others are reportedly limping back and no credible news about many other outfits. Who are hit beyond recognition and who are sailing through is based on one's update on the current affairs and guess work. Publicly available information is perhaps insufficient to come to a clear view. The pandemic has caused distortion in the market due to gaps in information available about the business operations of various entities. 

True and fair disclosure of information is a sine qua non especially when a company gets itself listed on stock exchanges as it has statutory and regulatory obligation to furnish material information in a timely manner to the bourses for immediate dissemination to various stakeholders.

In the absence of certainty and predictability, it becomes extremely difficult for businesses to attract capital. Even optimists like Warren Buffet are finding it difficult to come to terms with the impact of the pandemic. This is clear during his virtual annual shareholders meeting he had earlier held. Though he remains bullish on America, his repeated answer “I don’t know” during question answer session and his cautious optimism on the performance of capital markets makes it realistic about the formidable challenges ahead.

Listed entities around the world have been making disclosures regarding the impact of the pandemic, including that on financial condition and on current as well as future operations. Regulators have also encouraged timely reporting as well as complete and accurate disclosure of the impact, as far as possible. 

The heart of good Corporate Governance is transparency, disclosure, accountability and integrity. Market confidence goes up significantly when a company voluntarily complies with the principles of Corporate Governance. Besides the management getting appreciated, company’s market capitalization could fetch fair valuation. In Indian corporate space, Infosys used to set high standards of fair disclosures in 90’s when the disclosure norms were still evolving and the regulatory compulsion on many corporate activities was minimal.

Post lockdown, companies have started to share information pertaining to disruption of operations at their various premises. However, the information furnished so far remained mostly cosmetic, sketchy and for compliance sake. Hardly any inclination is seen to make preliminary disclosure of evaluation of impact on operations, liquidity, profitability and ability to make debt servicing etc. 

SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandates every listed company to frame and disclose a ‘Policy on Determination of Materiality of Events’. One of the key considerations is the likely result in significant market reaction. Board of Directors is responsible for undertaking assessment on material events and their likely impact on the company and intimating that to market. There is, however, no enthusiasm on the part of most of the managements of companies to implement disclosure norms in letter and spirit. 

Though there is no such a regulatory obligation to update the market, Anand based Gujarat Co-operative Milk Marketing Federation, the owner of US 5 Billion dollar valued Amul brand, has been on the front foot in sharing their insights from day one on their practical difficulties in collecting milk, supply chain disruptions during the initial lockdown period and percentage of disruptions etc.. Such proactive sharing of information is not seen from the corporate world. Share prices of some prominent companies have been witnessing huge swings without any information available in public domain about their businesses recovering to pre-covid levels. Some have fallen nearly 100 percent and then recovered in V shape as if the pandemic has taken L shape.

Given the reluctance of the companies,  SEBI issued an Advisory in second half of May stipulating that all investors have access to timely, adequate and updated information,…..companies are encouraged to evaluate the impact of the COVID-19 pandemic on their businesses, performance and financials, both qualitatively and quantitatively to the extent possible and disseminate. SEBI further laid down an illustrative list on which companies need to report like estimation of the future impact of COVID-19 on its operations, impact on financial position, profitability, liquidity, ability to service debt, supply chain issues, demands for its products/services etc. It further says at Para 8 of the Advisory dated May 20, 2020 that companies should not resort to selective disclosures, keeping in mind the principles governing disclosures and listing obligations. Besides, they shall revisit, refresh or update its previous disclosures based on the peculiar circumstances of each company.

Government owned unlisted company Air India’s latest announcement that its Board of Directors approved a leave without pay scheme for its permanent employees for a period of six months to two years, extendable to five years is clear communication to understand the impact of the pandemic on the carrier’s state of affairs. This disclosure on the HR policy is indeed a disclosure of material impact issue. Such disclosures are the need of the hour. Newspapers report that private sector banking firms have put in cold storage their recruitment plans and reworking pay packages for existing employees in order to conserve cash. However, no banking company apprised the exchanges about these decisions. The unwillingness could be due to fear of bad news spoiling their image and market sentiment turning against them.

Post lockdown, large number of young professionals working from home have been on a demat account opening spree with various zero brokerage firms indicating their eagerness to enter the capital markets. Making price sensitive information public by publicly listed companies in time would surely help these budding investors take informed investment decisions and avoid risky bets based on speculative tips. 

Let’s hope the nudge from SEBI makes the Boards of listed companies throw light on their true state of affairs in the upcoming quarterly financial disclosures. After corona, glorious past performance is no longer a barometer for future prospects.

Virtual Meetings of Shareholders

Onslaught of novel Corona virus has changed rather forced us to remain home-bound for an uncertain period so as to contain the spread of the virus. But people and institutions across the world appear to be finding inventive ways to amuse themselves and transact business and commerce. Meeting friends over zoom and whatsapp group video calling has become routine feature and conducting birthdays, parties and other ceremonies has become the new normal. Thanks to the available technology, even quarantined folks are also able to carry on their activities from home with the aid of ICT tools.

In India and elsewhere, incorporated companies are mandated to conduct their shareholder meetings at the place/town/village where the registered office of the company situated. Besides complying with the provisions of the Companies Act, listed companies are supposed to abide by the SEBI laid norms and those in the listing agreements with the bourses where they are listed.

Raichur based pharma company Shilpa Medicare Limited was to conduct its Extraordinary General Meeting on March 30, 2020 at Raichur, Karnataka for seeking nod of the shareholders for a particular transaction.

Being a shareholder I was informed on March 7, 2020 by email of the meeting. After imposition of nationwide lockdown on the night of March 24, the company sent an email informing that the meeting would be held at the stated time but on virtual platform Microsoft Teams. In line with the motto of digital India and taking cue from the Hon’ble Prime Minister conducting video conferences with various dignitaries, the company had come up with this innovative idea of holding the generally body meeting via video conferencing.  Ministry of Corporate Affairs had earlier permitted conducting virtual Board meetings. 

The meeting went on live on March 30, 2020 and a large number of shareholders attended the meeting from the comfort of their homes making it a successful first of its kind virtual general body meeting in the history of corporate India.

When  Shilpa conducted the meeting, procedure was yet to be notified and there were no secretarial standards available for guidance. The company complied with all the mandatory guidelines of conducting a physical meeting for this virtual meeting, promptly communicated to shareholders, Board members, auditors, stock exchanges and other stakeholders of its intention to go ahead with the meeting.

Perhaps buoyed by its success and thoroughly impressive secretarial standards followed by the company and representations from various quarters, MCA has on April 8, 2020 come out with a Circular  permitting holding of virtual general body meetings for the time being in limited cases. But based on the experience in the next couple of months, such an easy, cost efficient, time saving procedure needs to be made permanent feature by making an appropriate provision in the statue so as to enable  wider participation especially minority shareholders who cannot otherwise reach designated venues which are more often located in distant places.

Management and secretarial team of Shilpa Medicare Ltd deserves a big applause for setting a novel way for conducting general body meetings in this challenging environment. Similarly, MCA needs to be appreciated for laying down guidelines.

Let’s hope ICSI  comes out with requisite secretarial standards based largely on the methods followed by Shilpa.