1996 CRYSTAL CREDITS CORPORATION LIMITED CHAIRMAN'S REPORT I take pleasure in welcoming you to the 4th Annual General Meeting of your Corporation. Before I start with proceeding of the Annual Accounts for the year 1995-96 together with Auditor's & Director's Report which are already with you. I would like to express my opinion in respect of the present scenario of the Indian Industry affecting us directly or indirectly. The Economic Scenario During the last Financial Year there has been a Number of mixed developments in the national economy. The poor electoral performance in the Loksabha election lead to confusion in the industrial world about the policies of the new Govt. as well as apprehension of the stability of the Govt., which in turn affect the pace of growth of Indian Economy. However, it is important that we do not get diverted from the main goal, we set ourselves when we began the reforms and restructuring process. The objective was and must remain a healthier, more productive and globaly integrated economy. PERFORMANCE REVIEW The Directors' Report gives in detail your Corporation's performance in 1995-96 and I hope it gives you cause for satisfaction. The Corporation registered excellent performance, and earned a net profit of Rs. 317.42 lacs during the year 1995-96, which is up by 127% as compared to the previous years net profit of Rs. 139.83 lacs. During the year 1995-96 the gross profit of the economy showed arise of 112% as compared to the last year figure. Your Directors are now pleased to recommend dividend @ 21% pro-rata basis for the year 1995-96 to all the members whose name are appearing as on this days subject to the deduction of Tax at Source. I am pleased to inform you that the Corporation has also got its Fixed Deposit scheme rated by CARE as "BBB", which indicates sufficient safety of re-payment of principal and interest on deposits held with the Corporation. NBFCs-AS AN INDUSTRY The Non-Banking Financial Industry in the country has achieved tremendous growth in last 4 years. The Indian economy, soon after the liberalisation process started in 1991, has been opened for foreign investment and competitions, this accounted for bright Industrial climate as a result of which a big spurt is expected in the demand of Industrial needs. To cater the needs of the Industrialization process starting in the country, NBFCs are to play a vital role. The NBFCs are gaining as an alternate source of credit system in the country parallel to the Banks and Institutional loans for financing capital assets. The Industry understands that NBFCs are not playing competitive role with banks and Developmental Financial Institutions but they are playing complementary role as a responsible constituent of the financial sector of India. Thus the banking sector and Developmental Financial Institutions must be reallowed by Govt. to accelerate their funds to registered, recognised and rated NBFCs. Its appreciable that RBI has recently announced major realisations by reducing the SLR and removing the ceiling on interests and quantum of deposits like Banks. This relaxation will be applicable only to the RBI registered, approved, certified, credit rated, prescribed prudential norms meeting Non Banking Financial Institutions, Out of 43000 Financial Companies in India, there are approximately 745 Companies categorised as NBFCs who are meeting such requirements. I am pleased to announce here that we are among top 50 NBFCs in India. Your Corporation is fully prepared to match with the competition with greater professionalism and efficiency. Your Corporation is also entering into other fields of Fee based activity such as Merchant Banking, Stock brooking and corporate advisory services. UNION BUDGET & NBFIs While it is a matter of pleasure that Hon'ble Finance Minister Shri. P. Chidambaram has reiterated the Union Govt.'s commitment to continue the economic reforms for ensuring the macro-economic stability in the country, it is a matter of great pleasure that for the first time a Union Minister has given proper attention in the Union budged as regard Non Banking Financial Institutions. The Union Minister has assured for providing greater powers to RBI for cutting the feathers of misleading Financial Companies, a tough competitor with recognised Non Banking Financial Institutions. Though the Union Budget 1996-97 pronounced Minimum Alternative Tax (MAT) will certainly cause a good tax burden on your Corporation, but we appreciate Govt.'s this decision. By way of MAT applied on various industries inclusive of NBFCs, the country will gain more than Rs. 14,400 crores of tax out of this head. We feel pleasure as we are participating in our country's development fund by way of contributing tax through MAT pattern. CONCLUSION On behalf of Board of Directors and my own, I take this opportunity, to thank out customers, depositors, bankers, merchant bankers, financial institutions and all shareholders as well as all staff members. With such tremendous progress I am confident that the day is not far when your Corporation will play more meaningful role to the evolution of Indian Economy. M. PATHAK CHAIRMAN