Welcome to the 29th Annual General Meeting of your Company. I thank you for yoursustained trust encouragement and support.
Since we last met Indian economy has come across layers of bottlenecks that stifledthe growth for decades. The perspective may be summarized in the following manner.
India's growth in recent years has been supported by prudent macroeconomic policy: anew inflation targeting framework energy subsidy reforms fiscal consolidation higherquality of public expenditure and a stable balance of payment situation. In additionrecent policy reforms have helped India improve the business environment ease inflows offoreign direct investment (FDI) and improved credit behavior.
The update points to the positive impulse expected from India's novel GST system whichwhile remaining more complex than comparable systems in other countries is likely toimprove the domestic flow of goods and services contribute to the formalization of theeconomy and sustainably enhance growth.
India's long-term growth has become more steady stable diversified and resilient. Inthe long-run for higher growth to be sustainable and inclusive India needs to use landand water which are increasingly becoming scarce resources more productively makegrowth more inclusive and strengthen its public sector to meet the challenges of a fastgrowing globalizing and increasingly middle-class economy.
Resolution of NPA & Growth
Lacs of crores of Rupees have been remaining blocked in the Indian banking system asNon- Performing Assets withholding fresh investments and consequential growth of theeconomy. Existing legislations have been unable to remedy the situation over decades.Insolvency and Bankruptcy Code 2016 is envisaged to be one set of legislation addressingall the outcomes associated with loan defaults within prescribed time-limit undersupervision of the National Company Law Tribunal (NCLT). There has been several amendmentsthereto in quick succession in order to address various unforeseen fallouts and also toalign it with other priorities and prevent unwanted vulnerabilities. Once theimplementation stabilizes through amendments and judicial pronouncements the law wouldusher in a predictable course for managing loan defaults within given time-limit. Successof the process will also be dependent upon creation of adequate number of NCLT Courts aswell as capacity building of the Insolvency Professionals (IPs) since the IPs areentrusted with the authority and responsibility of running the defaulting borrower-Companyand lead the process to logical conclusion.
Your Company has diversified into the area through an Insolvency Profession Entity(Sumedha Management Solutions Private Limited) registered with the Insolvency andBankruptcy Board of India).
Promoting transparency and governance has been the Government's priority and severalpro-active steps have been taken in policy and execution level. Digitization is animportant enabler to this direction. Despite all the achievements India is faced withunprecedented spurt in loan defaults and frauds in public sector banks that also involvespersons at the helm. This has shaken general confidence about stability of the bankingsystem and efficacy of the internal and regulatory monitoring process. Lateral entry ofcompetent professionals at middle and senior levels and introduction of competence-basedappointment and promotion instead of seniority-based approach would improve thesituation.
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. Income therefrom was Rs. 1033 lacs in FY 18compared to Rs. 964 lacs during FY 17.
The Company has posted revenues of Rs. 2068 lacs during FY18 (Rs. 1569 Lacs for FY 17 -39% increase). Profit before Tax was Rs. 445 lacs against Rs. 511 lacs in the previousyear whereas PAT was Rs. 352 lacs compared with Rs. 356 lacs for FY17. EPS stood at Rs.4.41 in FY18 compared to Rs. 4.46 in FY17.
With positive developments all around your Company is sure of availing theopportunities to consolidate and move forward.
R. L. Gaggar