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
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