Living in lockdown: India turns to technology
24 April 2020: Sanjita V Padwal, chief finance officer of Indian engineering and technology firm Harshadray, tells ICAEW Insights about the challenges which lockdown presents Indian businesses and how her firm is adapting to cope. Michelle Perry reports.
As India announced that it would be extending its strict nationwide lockdown, imposed in March, to halt the spread of the coronavirus, Sanjita V Padwal, chief finance officer of Mumbai-based private company Harshadray Ltd was grappling with the impact that lockdown is having on her company.
Activities of the 63-year-old engineering and technology group’s holding company span technology licensing and machinery supply to software consultancy and certification and inspection services. This means some of the group’s service lines have been able to continue, while others have not.
“Lockdown imposed in the country has impacted companies that are physically required to go out for inspections and verifications and recovery. But all local Indian companies are severely affected as businesses are not in the position to release outstanding payments,” Padwal told ICAEW Insights.
Fortunately, the span of Harshadray’s activities mean that some of its service lines can proceed with a few tweaks to accommodate working from home, even for overseas clients. “Software companies are able to effectively work from home and provide all the customer support activities without being impacted severely. Their recoveries are quite regular even in regard to overseas clients in South East Asia and the United States of America,” she added.
Like millions around the world, Padwal has turned to technology to continue to do her job, using Skype and Zoom for meetings, and document sharing tools for collaboration. Padwal said she and colleagues are managing to work from home thanks to conference calls, which was particularly important last month [March] when the company was setting budgets.
“Skype business meetings and Zoom meetings have changed the ways in which we can operate business through remote locations,” she said.
The CFO added that India’s banks have offered “tremendous support in terms of completing online payments through telephone confirmation and emails for all our routine payment like salaries and urgent creditors, for example”.
India’s central bank, the Reserve Bank of India (RBI), also announced a series of measures to help relieve some of the financial stress caused by the pandemic, including a three-month moratorium on all term loans. The RBI has also expanded liquidity in the system “sizeably to ensure that financial markets and institutions are able to function normally in the face of COVID-related dislocations”, according to the RBI.
These measures have, said Padwal, “been a big help for all outstanding term loans and has generated additional cashflow for meeting mandatory expenses”.
Despite the available technology to continue to work from home, challenges remain in terms of cashflow however. Currently, the biggest challenges for Indian businesses are recovering outstanding payments and paying routine expenses such as staff salaries.
On the cashflow front, Harshadray is well positioned, said Padwal, but only for the immediate future. “As we had our working capital limits already aligned with our banks for all companies, we should be able to manage for a couple of months.”
Looking ahead, Padwal said that some of the lockdown measures inflicted on businesses could be incorporated into working life and could result in “great savings in travel and other costs for corporates with multi-locational business”.
For now, though, the CFO is focused on managing the company’s finances and doesn’t anticipate a return to normal working until at least the end of the second quarter of the financial year 2020/21.
Her advice to others around the world is: “Please take this as an opportunity to sharpen all the technical skills required for operating various businesses, as well as connecting with colleagues to overcome business difficulties.”
For the latest news and guidance on the ongoing impact of COVID-19 for businesses and accountants, visit ICAEW’s dedicated coronavirus hub.