Welcome to the 27th Annual General Meeting of your Company. I thank you for yoursustained trust encouragement and support.
Since we last met several structural changes have taken place and/or have beenpromised and the same will result in significant transformation. Even though there hadbeen a slowdown but with these structural changes there is a great likelihood of changestaking place in doing business in India.
Opening-up of most of the sectors to Foreign Direct Investment and steps for ease ofdoing business have become catalyst for access to superior technology alongwith growth ofbusiness and employment. National Skill Development is aimed at creating a backbone forsupply of required skills at various levels and simultaneously impart employability to theyouth. "Aadhaar" based identity and direct-benefit-transfer schemes have alreadyarrested misuse of funds amounting to thousands of crores of Rupees. Initiative for takingbroadband connectivity to village/panchayat level and using it for promoting awareness forliteracy health-sanitation nutrition crop protection access to welfare schemes wouldpromote welfare to the segments of population to whom development could not reach earlier.
Financial inclusion will be an important element in ensuring access and equity the necessary building blocks for sustainable growth of our country. Bringing formalfinancial services to every Indian who wants them is critical for improving the quality oflife. At the same time protecting them through education competition and regulation areequally important to ensure sustainable welfare.
At Sumedha Fiscal we are constantly striving to have a diversified financial servicesbusiness model and new opportunities are being closely worked upon so as to have asustainable future growth.
Key area of focus
Investment Banking continues to be the focus area for the Company as a one-stopsolution for major value added corporate services. The services covered include merchantbanking loan syndication financial restructuring resolution of stressed assets mergeramalgamation placements of securities. But in the unfavorable market condition liquiditycrunch and low demand condition finding suitable buyer became a challenge. With largechunk of investible fund declared / classified as NPA and consequently with lower lendinglimits Public Sector Banks (PSBs) find themselves in a limbo. They can neither recoverNPAs and free-up funds for lending nor sound proposals for fresh lending are forthcoming.This has impacted the loan syndication activity severely.
Sumedha Fiscal Services Ltd. has posted revenues of Rs. 1094 lacs during FY16.Considering the overall sluggish economic growth the Profit before Tax fell by 58% to Rs.153 lacs against Rs. 363 lacs in the previous year whereas PAT stood at Rs. 96 lacscompared with Rs. 248 lacs for FY15 a decline of 61%. Our EPS stood at Rs. 1.20 in FY16compared to Rs. 3.11 in FY15.
Strategic Debt Restructuring Scheme (SDR) announced by the Reserve Bank of India wasaimed at reviving the defaulting borrower through change in control/ownership by way ofstake sale. The Government proposal for infusion of fresh capital to PSBs (equity/debt)and transfer of NPAs to some other entity are under active consideration. In the meantimeimplementation of large scale infrastructure projects and good monsoon are expected toincrease aggregate demand and consequently expedite the cycle of consumption-productionleading to recovery of the economy. The countrys economy is likely to grow at highersingle digit rate from next year onwards and it is expected to be sustainable which augurswell for the Financial Services Sector. Further your Company is taking initiatives towardsplaying a catalysts role to push Start-Ups or fueling new entrepreneurs with growthplans.
The notification of Bankruptcy Code brings in a huge change in the manner of winding upof companies firms and bankruptcy of individuals. The time frame and manner ofdissolution have been specified. Rights of the secured creditors under SARFAESI Act wouldremain stayed under the Code during the resolution moratorium (6 months extendible byanother 3 months) in case of companies and even longer in case of non-corporate entities.
The secured creditor may have to take a tricky call based on relative percentages ofsecured assets versus free assets and decide whether to relinquish security interest andjoin the liquidation queue or stay out of liquidation and enforce security interest.Voluntary winding up of companies is now being moved completely from the Companies Act tothe Bankruptcy Code.
Insolvency and liquidation practice is a lucrative professional opportunity and yourCompany with its excellent human capital and domain knowledge can play a significant rolewhen the market matures.
As an organisation your company continues to be driven by strong set of values and iscommitted to delivering excellence to its stakeholders. Our investment in our peoplecapabilities technology and infrastructure continues to ensure that your Company remainsrelevant to our customers and close to their business. I thank you all for standing by usand supporting us. Regards
R. L. Gaggar