january 2011 connect - sme chamber of india · planning commission govt. of india inaugural issue,...
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Inaugural Issue Includes
A C T I V I T Y R E P O RT 2 0 1 0
SMALL & MEDIUM BUSINESS DEVELOPMENT CHAMBER OF INDIA
(SME Chamber of India)
JANUARY 2011
Initiated by Small & Medium Business Development Chamber of India
CO NNECT
Empowering SMEs For Better Growth
Dear Entrepreneur,
It gives me immense pleasure in communicating with you through
this magazine “ which is dedicated for the
development of Micro, Small and Medium Enterprises.
and its associate have been rendering
support services to the MSME Sector for more than 15 years. So far
these services as well as opportunities to participate in our activities
were limited only to our members. As India is marching ahead to
become a major player in the world economy, we thought it better
to reach out to the entire MSME Sector which is the back bone and
driver of the economy.
Through this inaugural edition we bring to this vibrant sector a
wealth of useful information related to entrepreneurship, finance,
marketing, manufacturing, exports, imports, technology and other
matters concerning business developments.
The Chamber and its associate offer a variety of free and cost
effective services to suit the individual requirement of an
entrepreneur.
It is my earnest desire that every entrepreneur takes advantage of
this magazine in order to enhance and update knowledge as well as
to improve skill sets required to compete effectively in domestic,
regional and international markets.
I request you to become a part of our initiatives to realize the dream
of our former President , to make India
one of the economic super powers by 2020.
SME CONNECT”
Small & Medium Business Development Chamber of India
(SME Chamber of India)
Dr. A. P. J. Abdul Kalam
Starting from Miles Ahead...
Chandrakant Salunkhe
Founder President
Small & Medium Business
Development Chamber of India
Panel of Advisors
Publicity and Marketing
Layout & Graphics
Printed & Published by
Mr. Chandrakant Salunkhe
Mr. A. Rameshkumar
Prof. Sanjay Chordiya
Mr. Sai S. Madhavan
Mr. Girish Bhagat
Mr. Hemant Salunkhe (Director)
Bricks Marketing & Promotion Pvt. Ltd.
Mr. Gandhi Gajelli
Mr. S. Maheshkumar
Mr. Gurdeep Singh
Mr. V. K. Venkatachalam
CO NNECT
CO NNECTInaugural Issue, January 2011 01
Printed at
HINDUSTAN PACKAGING
1, Ground Floor, Kembros Ind. Estate,
Sonapur Lane, Off L.B.S Marg, Bhandup (W),
Mumbai - 400 078. Maharashtra, India.
© SMALL & MEDIUM BUSINESS DEVELOPMENT
CHAMBER OF INDIA (SME CHAMBER OF
INDIA). The above concepts, activities and
events have been designed by us and are
exclusively the property of SMALL & MEDIUM
BUSINESS DEVELOPMENT CHAMBER OF INDIA
(SME CHAMBER OF INDIA). No part of the titles
and contents or images should be used,
reproduced, stored in a retrieval system or
transmitted, in any form or by any means or
discussed with any third party without prior
written consent of SME CHAMBER OF INDIA.
SME CONNECT Includes Activity Report of SME
CHAMBER OF INDIA for the year 2010
and some important activities of the year 2008- 09.
SMALL & MEDIUM BUSINESS DEVELOPMENT CHAMBER OF INDIA
Empowering SMEs for Global Competitiveness
Central Office
3 & 4, Upper Gr. Flr., Samruddhi Venture Park, Marol MIDC,
Near Hotel Tunga Paradise, Andheri (E), Mumbai:- 400 093.
Registered & Correspondence Office
101, Murlidhar Baldev Industrial Estate, Near Vikas Estate,
Off Aarey Road, Goregaon (E), Mumbai:- 400 063. INDIA.
Regional Offices:
Representative Office:
Delhi, Ahmedabad, Pune, Bangalore, Chandigarh, Hyderabad, Chennai, Goa, Coimbatore, Jaipur
USA, UK, France, Bulgaria, Turkey, China, Malaysia, Mauritius, South Korea, Thailand, South Africa, Dubai, Bahrain, Zambia, Singapore
The Chamber is a private organisation and Registered Under Section 25 of The Indian Companies Act, 1956.
Tel: +91 - 22 - 6677 0218 / 6667 4444 / 6150 9800 | Fax: +91 - 22 - 2874 354
Email: [email protected] | [email protected] | Website: www.smechamberofindia.com
Capacity Building and Connectivity Enhancement Business Development & Export Promotion
Interaction with Officials and Eminent Personalities
Industrial Development & Technology Upgradation Technology Transfer and Joint Ventures
Channelise Bank Finance and PE / VC
Recognition and Appreciation Awards
Training and Education
andMarketing Strategy Investment Promotion
Contract Manufacturing Tie-ups & Collaborations
ACTIVITIES
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Domestic Trade and Export Business Development
Source and Import quality products, machinery, equipments and hi-tech products
Business Matchmaking, Buyer-Seller Meet, Arrange Delegations and Missions
Listing in SME Exchange
Entrepreneurship Development
Promotion, Branding, Design, Development and Launch of products and services
Quality improvements to meet global standards
Market Survey and Research on various products and services
Preparation of project reports and financial documents
Set up new manufacturing units in India and abroad
Assistance and support for revival of sick units
Resolve Problems & Issues
Human Resource Development and Financial Advisory Services
Indian products and services permanent display centres in various countries
Liaison with Government Departments & Agencies, Overseas Organisations
Arrange study tours & visits to factories / industrial plants / trade fairs / exhibitions in India and abroad
Assistance to represent and participate in international exhibitions, trade fairs and conferences
ASSISTANCE & SUPPORT SERVICES
CHANDRAKANT SALUNKHE - PRESIDENT
SMALL & MEDIUM BUSINESS DEVELOPMENT CHAMBER OF INDIA
Contact : Speaking & Sponsorship Opportunity in various programs
Mr. Maheshkumar - Director & General Secretary
Contact : Membership & Support Services
Ms. Madhuri Khanwalkar - Deputy General Secretary
ADVISORY BOARD
OF
SME CHAMBER OF INDIA
(2011 - 2014)
Mr. A. RameshkumarMD & CEO, Asia Pragati Capfin Pvt. Ltd.
Mr. Girish BhagatDirector, India Nivesh Ltd
Mr. Sanjay B. ChordiyaFounder President and Chairman,
Suryadatta Group of Institutes
Mr. Sai MadhavanDirector,
Nishtha Technologies Pvt. Ltd.
Mr. Ravindra KumarSenior Banker and Regional Adviser,
Standard Bank PLC
Mr. Matej MerljakChairman,
Europe India SME Business Council (EISBC)
Mr. Prashant NagreChief Operating Officer, Fermenta Biotech Ltd.
Mr. S. P. JainMD, Sun Capital Advisory Services Pvt. Ltd.
Mr. Pankaj BhandulaSenior Vice President, Lavasa Corporation Ltd.
Mr. V.P. SinghPartner, Mavenvest Capital Partners LLP
Ms. Aslesha A GowarikerPartner, Desai & Diwanji
Mr. Ashok SangolliProject Consultant
Mr. Ajit ShahExecutive Consultant, K-Connections
Mr. Hemant SalunkheDirector, Geoptech Solutions Pvt. Ltd.
Mr. H. P. ShahCEO, Value Plus - The Family Office
Mr. MaheshkumarDirector, Macro Corporate Services Pvt. Ltd. and
General Secretary (Coordination),SME Chamber of India
Ms. Saakshi KulkarniDirector
(International Relations & Business Development),SME Chamber of India
MR. CHANDRAKANT SALUNKHEFounder President,
Small & Medium Business Development Chamber of India
(SME Chamber of India)
Ms. Sangeeta ModiFounder, Access Asset Managers
Mr. V. K. VenkatachalamSecretary General (Public Relations),
SME Chamber of India
69
Address by
Mr. Montek Singh
AhluwaliaDy . Chairman,
Planning Commission
Govt. of India
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“SME Stock Exchange
– New Opportunities
For Growth”
Single
Window
Clearance
for MSMEs
Dr. Sam PitrodaAdvisor to the Prime Minister,
addressing at
SME IT SUMMIT
Public Information, Infrastructure
and Innovation, Govt. of India
‘Policy Package
for Stepping up
Credit to SMEs'
“How to Identify Joint Venture and
International Alliance Partners?”
and “Technological International
Alliances Challenges &Opportunities”
Mr. Jagat Shah
Founder and Mentor
Clusterpulse
Mr. Rajendra Darda
Hon’ble Minister for Industry,
Maharashtra
Mr. C. B. Bhave
Chairman, SEBI
Dr. C. Rangarajan
Chairman, Economic Advisory
Council to the Prime Minister
ADDRESS BY
Prof. Suresh TendulkarDirector, Central Board,
RBI and Former
Chairman, Economic
Advisory Council to
Prime Minister
55
Exclusive
Interview
with
Dr. Rashid Al LeemDirector General of
Sharjah Department of
Seaports and Customs
and Hamriyah Free
Zone Authority
Indian SMES are quite capable of contributing substantially to achieve double
digit economy growth from the present 8 to 9 % and will emerge globally
competitive, observed the Chief Guest, Shri Mallya.
We are aware that SMEs face many challenges and expect a lot from the
banking sector. The banking sector is also providing information support to its
customers to offer better service. We are also mapping our strength and
weakness and resort to research and training the staff. The SMEs should acquire
the ability to deliver the right products and services to its customers and making
them available at affordable prices. They should build a capital from their own
equity contribution, subsidies and financial institutions. The banks are fully
aware of the needs of the borrowers and trying to effectively deploy the
required funds. Apart from finance, the entrepreneurs should also concentrate
on areas such as marketing, technology upgradation, and quality. This will
enable them to create vibrant units with properly utilised resources. The banks
are proactive in lending a helping hand to the viable units and cater to the
needs in their difficult periods.
In order to obtain sufficient finance from the banking sector, SMEs should prepare themselves to meet the rating requirements
expected of them by the Banks, said Mr. Mallya. For this purpose every SME Unit should be able to meet the loan compliance
requirements so that it will become very easy for the banks to sanction the loan within the shortest period of time. Not only Bank
of Baroda but almost all public sector banks are looking for SMEs as their partner to support and provide them all required
information and financial support wherever genuinely required provided the SMEs comply with the requisite terms and
conditions of the banks.
It is also very necessary to fulfil all the clearance required from statutory and government agencies so that no difficulty is
faced in this regard.
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Mr. M.D. Mallya SME FINANCE & INVESTMENT SUMMIT
Mr. K. V. Srinivasan , Mr. A. Rameshkumar
, Mr. A. K. Pandey Mr. Chandrakant Salunkhe
Mr. N. S. Srinath Mr. D. R. Dogra
and Mr. Jay Gupta
– Chairman and MD, Bank of Baroda is inaugurating the organised on 21st December 2010 at Mumbai. Other
Dignitaries from (L to R) – CEO, Reliance Commercial Finance – MD & CEO,Asia Pragati Capfin Private Limited & Chairman,
Northern Region, New Delhi, SME Chamber of India General manager, Reserve Bank of India, RPCD, – President, Small
& Medium Business Development Chamber of India (SME Chamber of India), – Executive Director, Bank of Baroda, – MD & CEO, Credit
Analysis & Research (CARE) Limited – MD, The Loot (India) Pvt. Ltd.
–
ADDRESS BY CHIEF GUEST
Mr. M. D. MallyaChairman and MD, Bank of Baroda
SME FINANCE & INVESTMENT SUMMIT21st December 2010 | Hotel InterContinental The Lalit, Mumbai
CO NNECTInaugural Issue, January 2011 07
Mr. Salunkhe, President, SME Chamber of
India in his introductory speech emphasised
and reiterated the role played by the SME
Sector towards Nation development. They
face numerous problems mainly regarding
access to finance from Banks, FIS, and
PE/VC Funds to raise capital and for their
working capital requirements. They are also
not well aware of the various formalities to
be complied with for obtaining funds. In
order to create awareness and to educate
the SMEs on the above, this Summit has been
organised, said Mr. Salunkhe.
Though SMEs located in rural areas possess
good skill and knowledge and are capable
of producing quality products, they do not
get the required education, attention,
support and assistance for getting timely
finance, marketing, exports, technological
upgradation, innovation, expansion and
diversification. Therefore, it is inevitable
that they should be given full attention and
support for their growth from all concerned.
He suggested the need for deputation of
branch level fully trained bank executives to
take care of their requirements and solve
their financial problems. They are also not
aware about various policies of the
Government and other regulatory
authorities, banks and financial institutions.
Hence, it is imperative that all concerned
should initiate appropriate action to see that
all SMEs especially located in rural areas
are educated properly to avail of various
facilities available for their business needs
and growth.
He mentioned that the world is looking at
India and our SMEs are very capable to
meet the global standards and therefore let
us empower the SMEs in all respects with the
support of Banks, FIs, Government Agencies
and other regulating agencies.
Another important aspect put forward for
the consideration of the banks and other
concerned authorities is that of CIBIL
interference on petty issues while
approaching the banks for loans. Untold
delays and miseries being faced by SMEs
need to be addressed on top priority.
Another area where serious attention and
immediate action is required is that on NPA
restructuring. Mr. Salunkhe requested and
emphasized the need for due consideration
in this regard. He also mentioned the need
for granting loans without insisting for
collateral to SMEs on the guidelines of
Government of India and RBI.
WELCOME & INTRODUCTORY ADDRESS
Mr. Chandrakant SalunkhePresident, SME Chamber of India
SMEs of South Asean countries are very
process oriented. Indian SMEs are creative
and innovative, but they are not systematic,
observed Mr. Srinivasan at the inaugural
session of the Summit. The SMEs should focus
on process oriented approach if they want to
succeed. They should possess sound
knowledge in order to scale up the activities
and integrate all the systems.
Another important aspect is that SMEs should
be able to meet the compliance requirements
of lenders in all respects at the time of
applying for loan besides tax compliance
and record keeping.
Planning succession is very important to get
the finance support. Since most of the SMEs
are individual or family owned, one should
be able to plan its successor after a gap of
20 years or so, so that the investor will be
able to evaluate the future growth and
accordingly support it.
It is very important how one presents the case
in a systematic and acceptable manner with
all required materials and documents. Since
the fund requirements vary significantly
there is no template approach by the finance
companies and each case is considered for a
tailor made solution.
The SMEs should be flexible in their
approach to attract investors.
KEYNOTE ADDRESS
Mr. K. V. SrinivasanCEO, Reliance Commercial Finance
Inaugural Issue, January 201108CO NNECT
Mr. D. R. DograMD & CEO,
Credit Analysis & Research (CARE) Limited
Recognising the importance of the MSME
Sector to the Indian economy, the
Government has taken various policy
decisions to support its growth. The Ministry
of MSME has initiated various schemes such
as credit linked capital subsidy scheme,
credi t guarantee sc heme, c lus ter
development programme, entrepreneurial
and management development programme.
The poor access to risk capital has been the
most severe constraint for the sector. Due to
its high risk perception, historically high
default rates, unstructured information flow
and low availability of collateral, banks and
financial institutions have found it difficult to
lend to MSMEs.
The contribution of MSMEs to India's GDP is
expected to increase to 30% by 2019-20
from its present level of 8% and this would
not be possible without addressing the
funding constraint.
The growth of the MSME Sector can get
hampered if Bank becomes more risk averse
due to regulatory norms. The credit rating
agencies are doing good job in bridging
information gap that existed between
lenders and the MSME borrowers.
However, in light of the new norms, ratings
targeted towards MSME Sector can have a
much bigger role in Indian financial system
and can help lenders, borrowers, regulators
and policy makers to realign their current
practices in line with the new Basel -III norms
making it a win-win situation.
Besides bank loan ratings, CARE ratings also
provide other rating products like the SME
Ratings and NSIC – CARE – SSI Rating
targeted specifically at the MSME Sector.
Internationally, studies have found that
MSMEs exhibit slightly different credit
characteristics relative to large corporate
entities and hence the approach towards
credit evaluation of this segment has to be
modified from the traditional credit
evaluation purpose.
With this the enterprises which get a lower
credit rating on the bank loan rating scale
can get a higher rating on the SME Rating
scale due to relative assessment feature.
Credit rating would continue to increase its
presence in the MSME domain and this would
certainly augur well for the financing needs
of the sector, concluded Mr. Dogra.
Mr. Jay Gupta highlighted the various
problems being faced by SMEs in the retail
sector with the banks. The banks charge
exorbitant rates to this sector when
compared to their corporate counterparts.
The procedures are not well understood and
the interest rates work out to about 18-20%.
He also elaborated numerous problems
faced by the Retailers about other statutory
requirements and taxation, octroi etc., which
needs immediate attention of the concerned
authorities.
As regards SME finance is concerned,
collateral poses the greatest challenge as
they go for expansion. Many of the retailers
operate on rented premises which hamper
their ability to provide additional security.
There is lot of hurdles even for raising funds
through IPO. Banks should consider a soft
approach towards MSMEs by understanding
their genuine problems and guide them in
obtaining the required funds at affordable
interest rates quickly.
He suggested to the banks that the sanction
of loans should be on time bound basis for
exporters otherwise they may lose out to
their competitors. Due to procedural delays
at the bank level disbursement of loan take
co n s i de rab l e t ime . He s t ro ng l y
recommended the avoidance of unwanted
multiple taxes, multiple returns and other
statutory requirements which is not only time
consuming but also confusing.Mr. Jay GuptaMD, The Loot (India) Pvt. Ltd
ADDRESS BY DIGNITARIES
Delegates at the Summit
Mr. Rameshkumar explained the importance of this Annual Summit. Although
there have been growth, competitiveness and new opportunities, there is
something which is not disappearing with regard to SME problems. These needs
to be continuously highlighted and better solutions are to be found. Are SMEs
getting the proportionate share?, definitely no, observed Mr. Rameshkumar.
Statistics reveals that they are not getting half of their share in comparison to
their contribution towards value addition to the economy. It means there is some
thing is lacking and this bottleneck is to be removed for the real growth of SME
Sector. SME's share of financial resources is really disproportionately less
compare to their significance and lending provided to corporate and other big
companies. SMEs financial problems arise both from demand side and the
supply side. The lenders constantly insist on disclosure on the financial status,
governance practices, better business planning etc. and these are to be
addressed in the right earnest.
Debt finance from the bankers and risk finance from the PE and VC should be
available to them for their growth without much difficulty and they should be
educated properly on this. There is inconsistency in accessing the credit
information system and credit reporting of SMEs by the lenders. This is to be
made easy to enable them to get the finances. Standardised credit scoring
system for SMEs is essential to understand and create awareness about their
eligibility for credit worthiness. To be competitive in the globalised world, SMEs
need to be more and more competitive. The regulations and polices need more transparency and flexibility so that SMEs
would be able to get finance easily from the banks. This is to be addressed properly by the CEOs of the Banks, Regulators
and concerned authorities.
THEME PRESENTATION
Mr. A. RameshkumarMD & CEO, Asia Pragati Capfin Pvt. Ltd.
and Chairman, Northern Region, New Delhi,
SME Chamber of India
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SMr. Chandrakant Salunkhe – President, SME Chamber of India felicitating with flowers for supporting the Summit
Mr. K. V. Srinivasan – CEO, Reliance Commercial FinanceMr. M.D. Mallya – CMD, Bank of Baroda
Mr. A. K. PandeyGeneral Manager, Reserve Bank of India, RPCD,
Mr. N. S. SrinathExecutive Director, Bank of Baroda
OTHER EMINENT DIGNITARIES
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“SME StockExchange –New GrowthOpportunity”
Mr. Lakshman GugulothuOSD,
Bombay Stock Exchange
Mr. Gugulothu deliberated various aspects of the proposed
SME Stock Exchange. The key players involved are Venture
Capital Funds, Banks, Qualified Sponsors, Registrars,
Merchant Bankers, Market Makers, Advisors and SME
Companies. The purpose of promoting the exchange is to
have a Target Clients, Attracting Investors, Target Locations,
Attracting Promising SMEs, Marketing Activities and
Marketing Channels.
The Exchange will also serve for setting up efficient,
affordable and easy to use platform to create visibility for
these companies, Ensure liquidity in this segment and
Dedicated Index
SEBI has issued a final circular on May 18, 2010 for setting
up a stock exchange / a trading platform by a recognized
Stock Exchange having nationwide trading terminals for
SME. The necessary amendments have been made in the
various SEBI's Regulations. Model equity listing agreement
has been notified. BSE is eligible for setting up SME
exchange and is in the process of finalizing the various
documents/ procedure for launch of SME exchange.
The target locations of the exchange are Mumbai: Focus on
Ancillary Companies, Surat: Focus on Diamond Exporting
Companies, Cochin: Export and Import Companies, Delhi :
Marketing Companies, Bengaluru & Hyderabad: IT
Companies, Pune: IT and Auto Ancillary Companies, SEEPZ:
EXIM Companies, Kolkata : Various small Corporates,
Ahmedabad :SME Companies.
The Exchange will offer service such as, Special Cell for
interacting with the members –Technical and Non-Technical
queries, Accepting suggestions/feedback and
implementing the same, Time-to-time mock trading, Co-
ordination between various departments, Advice to the
companies on listing rules and regulations, Assisting the
companies in preparing their Balance Sheet and filing it on
proper time, Assisting the companies in filling all the listing
requirements, Assisting the companies in offering process
whether IPO or Private placement.
While speaking about the Role of Reliance Commercial, Mr.
Pillai elaborated the various aspects through a
presentation.
Reliance Commercial finance is the lending arm of Reliance
Capital.
It concentrates on Asset based financing, predominantly
with manufacturer tie-ups that is for Printing Industry,
Medical Equipment, Educational Institutions, Loans Against
Property, Commercial Vehicle Finance, Loan Against
Securities, Inventory Funding, Lease Rental Discounting,
Operating Lease Solutions, Financing primarily revenue
generating assets and existing entities going for expansion
in the same line of business.
Cash flow based evaluation approach, flexible Secondary
Collateral Options – Equipment, Land & Building, Shares,
Mutual Fund Units, Insurance Policy, Bank Guarantee etc.
are given due consideration. The company have built up
expertise in TL funding, identified a clear gap to cater to the
manufacturing industry and Genesis - Supply Chain
Finance. Supply chain and non-fund facilities are aimed at
catering to the working capital demands of SMEs, Working
Capital Gap Funding, Bill Discounting, Factoring, Debt
Syndication, Escrow, Letter of Credit, Bank Guarantees.
Mr. Pillai explained about various challenges involved while
lending to SMEs. Due to their poor profitability and lack of
access to formal capital markets and institutions there is a
heavy dependence on alternative financing channels by
SMEs.
Relatively opaque financial model due to higher reliance on
alternate funds and off - balance sheet transactions
enhances risk perception from a lender's perspective.
No access to summary proceedings or debt recovery
tribunal/SARFESI in the event of exposure going bad leads
to higher risk provisioning & impacting the pricing.
No effective industry wide platform for data sharing on
companies and legal and regulatory constraints on
assignment/refinancing of such loans are available.
SMEs can interact with our dedicated relationship team
(SMs and channels) and utilise the support of our call centre
and website.
“The Role ofRelianceCommercialFinance forSME growth”
Mr. Sachin PillaiGroup Business Head,
Reliance Commercial Finance
ADDRESS BY SPEAKERS
CO NNECTInaugural Issue, January 2011 11
“Introduction toVenture Capitaland Private EquityFunds”
Ms. Sangeeta ModiFounder Member,
Access Asset Managers
Mr. Parag Pakti spoke about the importance of Credit Rating for
SMEs and dealt with many important aspects on the topic through
speech and presentation. He elaborated the various reasons for
low financial lending to SMEs. They are, absence of reliable credit
information, lack of sufficient market credibility, poor historical
performance of loan portfolios (High Non Performing Loans (NPLs)
/ bad debts in the MSME segment), High Risk perception, hence
insistence on collateral-based lending, Weak credit appraisal and
risk management/ monitoring tools. This will result in low level
lending to SMEs and higher cost resulting in higher interest rates
charged by banks.
He also explained with facts and figures about decreased financial
lending to SMEs. Commercial bank credit to SMEs, as a percentage
of net bank credit, has declined sharply since the late 1990s and
access to adequate, timely financing on competitive terms has been
a major deterrent to growth and competitiveness of SME.
About Indian experience to SME banking, he said that SMEs are
vulnerable, Information about SMEs is scarce, SMEs are
geographically dispersed and SMEs are transaction intensive.
Hence the need for credit rating agency for SMEs arises.
Rating process are customized to suit MSMEs in building expertise,
creating databases & research studies in the MSME / lending
sector, providing self marketing avenue for MSMEs. Trusted third
party opinion on the units' capabilities and credit worthiness enable
access to quicker and cheaper credit.
SMERA is the only Rating Agency dedicated for Micro, Small and
Medium Sector with MOUs with 36 banks covering a large section
of Indian banking sector, with 13 Banks extending interest rate
benefits to well rated SMERA units. The company has completed 5
years of operation & more than 9000 Ratings. It has been
empaneled under the Central Government Performance and
Credit Rating Scheme (NSIC) - 75% subsidy for Micro/Small Units,
technical assistance under the World Bank/DFID led multi-lateral
SME Financing & Development Program.
If has offices at 12 locations and Expanded to over 120 associates
having SME focus across functions.
SMERA products and services include Micro and Small Scale unit
Ratings under NSIC, SME Ratings (non-SSI), Green Field/Brown
Field Grading, Micro Finance Institutions Rating, Maritime Institute
Rating and Green Rating. It is independent, comprehensive and
transparent.
“Importance ofCredit Ratingfor SMEs”
Mr. Parag PatkiCEO, SME Rating Agency of
India Ltd. (SMERA)
In her presentation and speech she explained in detail about
introduction to Venture Capital and Private Equity Funds.
The major PE funds in India are Canbank, Ventureast, GVFL,
Acumen, Seed Fund, Accel, BTS, Birla, Avigo, Tano, Zephyr Peacock,
SIDBI Venture, Milestone-Religare, Lighthouse, Motilal Oswal,
Mayfield, Gaja, Banyan Tree, Access, Reliance, Tata Capital, Kotak
Venture, IL&FS Ventures, India Value Fund, Barings, New Vernon,
Sequoia, Blue River, UTI Ventures, Fidelity, ICICI Venture, Standard
Chartered, JP Morgan, HSBC PE, New Silk Route, Greater Pacific
Capital, Citibank, Chrys Cap, Carlyle Pvt Equity, CLSA Private
Equity, Morgan Stanley, Carlyle Buyout, General Atlantic,
Blackstone, Warburg Pincus, Actis, IDFC, 3i Capital, Olympus,
Temasek, Capital International, TPG, Bain, KKR, Advent, Apollo
and Apax.
She explained in detail about opposite pyramids effect of Demand
for PE Capital and supply of capital.
Regarding mapping the Indian PE market and exit track record, she
said that overall, the industry has seen a limited number of exits
across categories. Strategic sales and secondaries are consistently
achievable across economic cycles.
The large number of 'sales via public markets' in 2009 represent
exits from listed investments by funds.
Given market recovery, a large number of PE Investments done
over the past 4 years focus on IPOs for exit. There are significant
challenges on exits for many of these transactions, she said.
As regards the investor's profile, there are Typically 10 to 20
investors like offshore investors, institutional and HNI. Institutional
Investors will comprise of Endowments, Pension Funds, Insurance
Companies and Developmental Finance Institutions.
HNIs are largely NRIs and NRI families. Domestic Investors are
largely Banks and Insurance Companies
Delegates at the Summit
Inaugural Issue, January 201112CO NNECT
Mr. S.R. Rao, dealt with the topic on “Supporting International
Competitiveness of SMEs and Procurement Governance” through
his speech and presentation.
He said that Globalization of the world economy has increasingly
drawn the Small and Medium Enterprises (SMEs) into global value
chains. Globalization facilitates access to global markets which is
now an important part of business strategy for many outward-
looking SMEs. Access to global markets for SMEs can offer a host of
business opportunities such as access to larger and new markets
help prospective high growth firms realize their potential,
possibilities to exploit economies of scale and technological
advantages, upgrading of technological capability, lowering and
sharing of cost including R&D costs. Globalisation can also pose
challenges and threats to SMEs during their exposure to
international competition.
SME play vital role for Economic Development, Balanced Regional
Development, Better Resource utilization, Generation of
Employment, Entrepreneurship Development, Industrial Growth,
Contribution to Industrial Output, Supply of intermediates to Large
Enterprises, Exports and ability to adapt to changing environment.
In OECD countries, SMEs account for over 95% of firms and 60-
70% of employment. SMEs have propelled the growth of leading
Asian economies. SMEs in Asian economies account for around 40-
60% of capital investment, 60% of employment and 50% and
35% of output and exports respectively.
Mr. Rao touched upon the various challenges faced by SMEs -
Access to adequate financing: value chain financing, access to
technology, managerial capabilities, productivity, regulatory
issues, brand value and good governance. He has suggested
various measures to get over and adopt the required innovative
methods for sustained growth.
SMEs are extended export marketing finance to implement
strategic export marketing plans aimed at entry into new markets
and term loans for supply side upgradation, generation of
significant exports to new country markets. These facilities offer
potential for many of these companies to become large companies
with high export orientation
About financial management he said that weak financial
management practices pose serious fiduciary risks and hence there
is need for well structured Financial Management, Disbursement
Arrangements, disclosure of information and good governance.
“Supporting InternationalCompetitiveness of SMEsand ProcurementGovernance”
Mr. S. R. RaoPresident,
Global Procurement Consultants Ltd.
(GPCL)
MCX promoted India's No. 1 commodity exchange, FTIL – a leading
technology company in India and MCX-SX which is the largest
Currency Futures Exchange in India (49.09% Market Share –
November 2010). Presently Trading pairs on MCX-SX CDS
Platform: USD-INR, EUR-INR, GBP-INR, JPY-INR . Average Daily
Turnover for the month of November 2010 is Rs.15,821 crores .
MCX-SX will launch Interest Rate Futures, Cash Equities, F&O, Debt
Products and SME segments on its platform, subject to regulatory
approval.
Quick facts of MCX Stock Exchange are - 700+ members (incl. 28
banks),500 + geographical spread across cities and towns, 400 +
education programmes across India, Shareholding of public and
private Sector banks & Financial Institutions - 84 % and IL&FS
Financial Services 5%.
He also emphasised the need for good governance in SME Sector.
The governance issues are, Ownership, Lack of time, Reluctance to
give up ownership control, succession planning and rules for
conflicts of interest, Lack of balanced and diverse Board and Need
for increased usage of Information Technology. However, it is very
essential to adopt good governance by SMEs for crating a good
image to the investors and while entering into global markets. He
suggested various steps to be considered while developing
Corporate Governance such as identify value of business, draw up
a code of ethics, and communicate the code and corporate
governance as per clause 49. This includes quality and innovation
of services, reliability and efficiency, integrity and transparency
and fairness, clearly demarcate 'spirit' of business, Provide
guidance to staff, Make a public statement and Communicate
throughout the organization.
Employees must be aware of organizational commitments and
ethical behaviour expected from Board of Directors, Audit
Committee, Subsidiary Companies, Disclosures, CEO/CFO
Certification and Report on Corporate Governance.
Benefits of SME Stock Exchange to SMEs include raising funds,
improves visibility, platform for trading, exit option for investors,
Participation of Venture Capitalist / PE funds / Financial Institutions,
and ensures better Corporate Governance and transparency. He
also elaborated Indian International scenario about SME Stock
Exchange. SME Stock Exchanges encourages potential unlisted
companies to tap funding opportunities through the capital market,
interact with SMEs with focus on all aspects involved in getting
recognised and listed, conduct practical training and education
programmes on various products traded on the Exchange, spread
the message of Environmental, Social & Corporate Governance
amongst SMEs, educate compliance norms with deadlines and
recent regulatory changes.
“Regulations &Challenges –SME Stock Exchange.”
Mr. Saji CherianHead, Corporate Services and
Market Development,
MCX Stock Exchange
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“Role of CFO forbetter FinancialManagement ” and“Importance ofBusiness Ethics andGood Governancefor SMEs”
Mr. Bhairav KothariFounder & CFO Partner,Super CFO Services Pvt. Ltd.
Mr. Kothari explained in details the utility and necessity of a
CFO in an organisation especially in SMEs. They include
Strategic Planning, M&A Support, IPO Management,
Corporate Governance, Cashflow /Cost Management,
Business Plan and Fund Raising. SMEs can hire the services
of CFO on part time basis as most of the SMEs cannot afford
a full time CFO.
CFO also plays a vital role in mergers and acquisition, to
deal with Planning & Researching, Due Diligence, Risk
Assessment and Safeguards, Integration Strategy, Funding
Requirement – Upfront & Ongoing, Unbiased Assessment to
the BOD and M&A Cost Containment.
The services of a CFO helps to implement robust accounting
system, ensure timely and complete statutory compliances,
cash flow forecasting, receivables etc. It also helps funding
/ structuring - Debt vs. Equity, Structured Finance, Costs vs.
Repayment Tenure, Arbitrage, Valuation, Fund Raising
Strategy , Smart Deployment of Funds and Assessment of
Real Requirement.
On the importance of business ethics and good governance
for SMEs, Mr. Kothari explained in detail with presentation.
Corporate governance is concerned with holding the
balance between economic and social goals and between
individual and communal goals. The governance framework
is there to encourage the efficient use of resources and
equally to require accountability for the stewardship of
those resources. The aim is to align as nearly as possible the
interests of individuals, corporations and society, said Mr.
Kothari.
He also explained the requirement of Board of Directors
and the basic requirements such as appointment, induction,
training, responsibilities, composition and conduct of
meeting. Key roles of the Board of Directors are
Managing & Disclosing Risks, Evaluating Board
Effectiveness, Ensuring Compliance with Laws, Assessment &
Approval of Related Party Transactions, Appointment and
Certificate of Independence – Auditors, Whistle Blowing
Policy and Secretarial Audit Compliance.
Significance of Good Governance include - share holder
interaction, minority shareholder interests, internal controls,
non- executive director discussions, separation of chairman
and CEO roles, independent directors, audit committee,
compensation committee, nomination committee etc.
The reasons for industrial sickness are - outdated
technology, weak and fragile sales network, late collection
of trade receivables, shortage of Working Capital, power
shortage, deficient management expertise, labour
problem, lack of risk management expertise and absence
of its tools etc.
Various stops for the rehabilitation of NPA are –
Rescheduling, Re-phasement and Restructuring of account,
Under BIFR scheme, Under CDR scheme, Merger and
Acquisition (M&A) with healthy unit, Nationalization of the
unit or settlement of account (OTS), securitization of loan
(Sale Of Assets to ARC's), filing of suit in account ( LOK
ADALATS/ DRT's AND DART's) and Write off the accounts.
The general guidelines on rehabilitation of NPA are -Unit
should be viable at the end of the rehabilitation period,
Scheme should be in compliance with the guidelines of RBI,
State Govt., Central Govt., in respect of relief, concessions,
sacrifices, promoter's contribution, IRR, DSCR, DER etc. All
the participating institutions should agree to the scheme in
toto and potentially viable units may be assisted by
restructuring or sanctioning additional finance after
satisfying about the viability of the unit.
For debt restructuring mechanism for SMEs, RBI has issued
guidelines on 8th Sept. 2005. SSIs with Investment in Plant
and Machinery up to Rs.1Cr. (except. in certain industries up
to Rs. 5 Crs) and Medium Enterprises- Investment up to Rs.10
Crs are eligible for restructuring. For all non corporate
SMEs- Any level of dues and for all corporate SMEs -
Funded and Non Funded Outstanding upto Rs.10 Crs (under
consortium/multiple banking arrangement), For
outstanding above Rs.10 crore separate guidelines issued
by R.B.I will be applicable. Accounts involving willful default
and fraud are not eligible.Cases classified as Loss Assets
are not eligible for restructuring.
Prior approval to be obtained in BIFR cases and Account
should be viable in 7 years and repayment period for
restructured debt should not exceed 10 yrs.
Issues regarding restructuring of NPAs by bank include -
Implementation of Bank's policy and internal rules and
regulations, apathy to take sympathetic view, timely and
adequate financial help, non agreement of terms and
conditions amongst consortium member Banks for
restructuring, inability to bring additional funds by
promoters and Incipient sickness not identified early.
“Restructuring ofStressed Accounts”
Mr. Mohan M GadgilAdvisor, Business Development,and Assets Reconstruction,International AssetReconstruction Co. Pvt. Ltd.
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“Statutory andDue DiligenceProcesses”
Ms. Mehta explained the various aspects involved in the
statutory and due diligence. The objective of the due
diligence is to collect material information from the target
company, conduct SWOT analysis, improve bargaining
position depending on SWOT analysis, take informed
decision about an investment, withdraw the deal if required
to provide desired comfort level in transaction, to ensure
complete and accurate disclosure, bridge gap between the
existing and expected return, take reasonable logical
action / decision and to enhance confidence of stake
holders.
Various aspects of due diligence are business due diligence,
legal due diligence and financial due diligence. Important
factors while conducting due diligence are objective and
purpose, type of industry and life span of the organisation.
The process involved are planning and the schedule –
forming a team, steps to be followed in due diligence
process, areas to be checked, aspects to be checked in each
area, information and other material to be requested from
the seller, negotiation for time, risk minimization (double
check the information), creation of data room etc.
Due Diligence Report is a valuable tool for the new owners
of the business in providing an overview of the business,
identification of areas of weaknesses and threats.
Each Due Diligence review is unique but the overall aim is to
provide the investor with sufficient, relevant and timely
information in order to assist in the investment decision.
The successful performance of Due Diligence is dependent
upon the scope, planning, co-ordination and use of a highly
skilled team. The cost of preparation of a quality due
diligence is insignificant when compared to the cost of a
bad acquisition.
Ms. Dipti MehtaPartner, Mehta & Mehta
Advisory Services Pvt. Ltd.
Mr. Rammohan BhaveFounder,
Consult IFRS Pvt. Ltd.
“The Key SuccessFactor forSME Growth”
Mr. Manish GuptaNational Head (Sales),
IndiaMART InterMESH Ltd.
“SMEGrowth Strategy”
Mr. Manish Gupta emphasised the need for internet
connectivity to every SMEs because it is most economical
with global reach, having endless life, 24 x 7 accessibility,
real time speed, unlimited space and very dynamic.
Internet is to be used for the purpose of creating content,
website, blog, catalogue and to further distributing to
market places, online directories and social media.
He elaborated in detail the need for latest and innovative
technology for the sustained growth of SMEs.
Mr. Ram Mohan Bhave, spoke on various strategies on
growth of SMEs. Mr. Bhave said that SMEs should
concentrate on financial management. Even though they can
not afford to have a CFO, they should outsource the CFO
activities if they want to progress. CFO services are very
essential for an SME as it assists in identifying areas to
control costs, leverage the excess funds, deploy the funds
efficiently and to bargain with the lenders and banks. This
will ultimately lead to increase profits for the SME.
Other areas need special mention are new business ideas,
business models, Process optimization and Marketing.
EXHIBITION OF FINANCIAL PRODUCTS & SERVICES AT THE SUMMIT
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SSME IT SUMMITTheme: Leveraging Information Technology and Innovation for SMEs Growth
Friday, 12th November 2010 | Hotel InterContinental The Lalit, Mumbai
Dr. Sam Pitroda
Mr. Joseph Massey Mr. Chandrakant Salunkhe
Dr. Vijay Bhatkar
Dr. Sanjay Chordiya
– Advisor to Prime Minister, Public Information, Infrastructure and Innovation, India inaugurating the Summit.
Other Dignitaries (from left to right) – MD & CEO, MCX Stock Exchange Ltd, –
President, SME Chamber of India, – Chairman, ETH Ltd and Architect of PARAM series of Supercomputers and
– Chairman, Pune Region, SME Chamber of India and President, Suryadatta Group of Institutes, Pune
Dr. Sam Pitroda SME
CONNECT - MAGAZINE & PORTAL”
Mr. Joseph Massey Mr. Virendra Jhamb
Dr. Sanjay Chordiya
– Advisor to Prime Minister, Public Information, Infrastructure and Innovation, India Launching the “
Other Dignitaries from left to right
– MD & CEO, MCX Stock Exchange Ltd, –Chairman,
SME Technology Development Council and – Chairman, Pune Region, SME Chamber of India and President,
Suryadatta Group of Institutes, Pune
Mr. A. K. Bansal -
Mr. Chandrakant Salunkhe Dr. Vijay Bhatkar
Executive Director, Indian Overseas
Bank, – President, SME Chamber of India, – Chairman, ETH Ltd and Architect of
PARAM series of Supercomputers,
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At the outset Dr. Pitroda emphasised and appreciated the role
of SMEs in national development. He firmly believed that SME
have been playing very important role in job creation, economic
growth, innovation and exports. They constitute the large base
of ancillary units to cater to the needs of corporate,
multinationals and Government organizations.
Today it is very difficult to draw a line between communication
and information. Both have merged into a single pervasive
technology called Information and Communication
technology (ICT). ICT finds applications in every
aspect of life - manufacturing, Government,
education, health, infrastructure etc., said Mr.
Pitroda. It is necessary that we should try to analyse
the impact of this connectivity available today and
begin to do things differently. There are 7 million
mobile phones in use in India.
We are thinking at the Government level to
propagate ICT and setting up 6 different platforms.
An Open platform for broadband with 100
megabytes so that we can connect millions of people with high
speed internet access.
He also explained about major programmes at Government
level like to connect
universities, R &D institutions and major libraries. The idea is to
increase collaboration amongst various entities. With this a
lecture by a professor in Chennai can be seen in 500 colleges. It
will revolutionanise the education and the role of teachers will
change to attain a student – teacher ratio of 20:1. 50 years
later students will say and not
.
Another platform is about the way Government offices will
function in future. Persons may change and the system will work.
25000 panchayats will be connected across the country with
optical fibre. We have to democratize the infrastructure
because nobody wants to exchange knowledge. With RTI,
transparency and accountability we can de-centralize
government functioning.
Under Unique Identification Authority of India (UIDAI),
Multipurpose National Identity Card or Unique Identification
card (UID Card) will be issued to citizens with one number
allotted to one individual carrying name, address, photo, finger
prints etc.
Yet another initiative is to map all buildings, streets, roads etc.
for quicker access and identification.
Government offices, panchayats and Food distribution centres
would be connected for efficient distribution of commodities
and management.
Another platform will connect Defence, police and Intelligence
agencies.
A payment platform will connect banking services to unbanked
section of people to facilitate electronic transfer of funds
through mobile phones. This will also be integrated with
merchant shops, sales counters, credit cards etc.
Next generation infrastructure will bring in a lot of changes.
SME should acknowledge changes to create
employment, wealth, technology with reduced cost
and increased efficiency.
“If SME do not change , Nation does not change”
declared Dr. Pitroda. If SME do not change in tune
with the developments around the world, the
circumstances outside we will force them to do so.
They should start using ERP and CRM packages in
their businesses.
Innovation is not about products, packaging and
laboratories but is about broad spectrum in all
walks of life - family relations, schools and colleges, hospitals,
industry, Government etc. With innovative spirit we can achieve
10 to 15% growth, lift millions of people from poverty and
attain inclusive growth.
It should be the endeavour of every SME to convert innovative
ideas and translate them into commercial ventures to attain
growth. Innovation and improvement will go hand in hand. There
should be both State and Central level Innovation Councils to
guide and help the SME Sector. Government has identified 20
clusters for development and in all these clusters the seed of
innovation will be incorporated.
A nation with 50% of the population below the age of 25, it
must be our aim that we should have innovative approach in all
our activities and the ICT will be a more useful tool in achieving
this objective.
“National Knowledge Network”
“I have learnt” “I have been
taught”
“Innovation is the fuel to growth”.
Dr. Sam Pitroda - Advisor to Prime Minister, Public Information,
Infrastructure and Innovation, India addressing the delegates at
the inaugural
ADDRESS BY CHIEF GUEST
“IF SMEs
DO NOT
CHANGE,
NATION
DOES NOT
CHANGE”
Inaugural Issue, January 2011 19 CO NNECT
The most important requirement for a successful and long lasting
relationship between a bank and its customers is the “TRUST”
emphasized Mr. Bansal. While the banks are willing to extend all
possible assistance to SME sector it is equally important that the
SME entrepreneurs should be transparent in their accounting
procedures and dealings. They should win the confidence of their
banks. This will pave the way for quicker disbursal of funds by the
banks to SME to meet their various needs like going in for latest
technology, capital assets, expansion, diversification and exports.
IOB has already been extending necessary assistance to SMEs as
well as educating them to understand compliance requirements
which are essential to process the applications and offer
appropriate services.
According to him, it is very necessary for the SMEs to adopt IT
solutions so that they can transact with banks effectively, quickly
and inexpensively as most of the banks have already advanced IT
systems in place for on-line banking transactions.
ADDRESS BY DIGNITARIES
Mr. Chandrakant Salunkhe emphasised the urgent need for the
SMEs to be innovative in all their activities. SMEs should also look for
new avenues of obtaining finance like venture capital and private
equity rather than depending on bank and financial institutions
alone. They should resort to joint Ventures, technology transfers,
Contract Manufacturing tie-ups and business collaborations to
enhance growth. Any SME who does not invest in IT solutions will be
left behind in the race.
He explained the role played by the Chamber for helping the SMEs
to adopt latest IT solutions and technology and ensured that
Chamber will organise various events in future for educating SMEs
to adopt the best and most cost effective IT solution
The progress of Indian telecommunication can be traced to first
telephonic exchange in 1950s. The invention of Microprocessor in
1971 has revolutionized the way the data are stored, processed
and retrieved. The electronic revolution has much more greater
impact than the industrial revolution. The incorporation C-Dot has
fueled the spread of information technology. Today from
Governments to Corporate to SMEs information technology is the
driving force behind the operations of the enterprises.
First generation entrepreneurs start an enterprise with least
capital. The electronic companies like ECIL and Instrumentation Ltd.
helped augment the economic progress. The four pillars of the SMEs
are – Marketing, Finance, Management and Information
Technology. Since the importance of IT is not fully understood by the
SMEs it is very important to organize separate Seminar called SME
ICT SUMMIT.
Dr. Vijay Bhatkar – Chairman, ETH Ltd.
and Architect of PARAM series of Supercomputers.
Mr. A. K. BansalExecutive Director, Indian Overseas Bank
Mr. Joseph Massey – MD & CEO, MCX Stock Exchange Ltd.
Size is very important to go in for listing in a stock exchange
observed Mr. Massey. Investors will also always hunt for good
industrialists. Global expansion is difficult with own resources and
hence raising funds through the stock exchange is a sensible option.
While big companies can resort to stock exchange, the SMEs are
not fortunate enough to do so. In Canada there are SME Exchanges
which are event allowing the SMEs with simply innovative ideas
without any capital. These exchanges ensures that good ideas are
converted into a fundable project.
Mr. Chandrakant Salunkhe - President, SME Chamber of India
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Mr. Chandrakant Salunkhe – President, SME Chamber of India felicitating with flowers for supporting the Summit
Mr. K. R. Kanojia – AGM, Bank of BarodaMr. Jay Gupta – MD, The Loot India Pvt. Ltd.
Mr. Shah elaborated the benefits and usefulness of
adopting cloud computing by SMEs. It serves as an effective
interface between consumers and IT service providers.
Cloud computing is very useful for the SME as they need not
invest in costly hardware. Moreover the main problem of
SME is their inability to select right software solutions which
get obsolete so fast. Many times they end up with a unviable
one which is not needed for their size of operations.
By outsourcing their IT needs to a cloud computing company
SME can scale up, add or remove packages as needed,
shares a pool of resources to reap economy of scale and
tracks usage. They need to pay only for the usage and the
data are fully secured.
Cloud Computing is one of the latest technology up
gradation. For example a hospital having clinics in India
and Middle East with 800 employees, Cloud computing can
help them manage effectively Clinic-level transactions,
aggregated data analytics, Revenue Analysis, Resource
Utilization, Customer Satisfaction and New business
opportunities.
Therefore SME should give a serious thought to identify and
adopt suitable, secured and cost effective IT solution at the
earliest opportunity to be successful in the globalised
market.
Prof. Rao explained about various drivers to be adopted
for the growth of SMEs. They are thrust on growth on
infrastructure with private participation, strengthening of
SME clusters, setting up of Industrial Parks and Growth
Centres, Liberalised financial and banking sector
facilitating assistance to SMEs on competitive terms and
Minimum regulatory interventions in the affairs of the
enterprises.
SIDBI provide various technology related support services,
in collaboration with UN-Asia Pacific Centre for Transfer of
Technology. SIDBI has also set up Technology Bureau for
Small Enterprises (TBSE) in 1995 and TBSE is functioning as
a one stop solution provider for all technology related
problems of SMEs in India.
Other services at nominal rates from SIDBI are - Technology
Information, Match Making, Finance Syndication and
Business Collaboration.
For enhancing competitiveness, SMEs should use a balance
scorecard that contains relevant, timely and accurate
information. This will keep a management team well
informed about their key objectives, said Prof. Rao.
“SME and IT Needs– Challenges andOpportunities”
Mr. Bimal ShahHead, SMB Architecture,
TATA Consultancy
Services Ltd.
“Using IT &IT Strategies forSustainable CompetitiveAdvantage for IndianSMEs”
Prof. Sujata S. RaoAssistant Professor
K.J. Somaiya Institute of
Management, Mumbai
ADDRESS BY EMINENT SPEAKERS
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“Increasing GlobalCompetitiveness ofSMEs through ITdriven BusinessTransformation-Some Experiences”
Dr. Chandan ChoudharyManaging Director,
Invigorare Solutions Pvt. Ltd.
“How cloudcomputing canbenefit SMEs?”
Mr. Adarsh SinghGM (Business Development -
Cloud Computing)
HCL Infosystems Ltd.
“We live in a customer driven environment and subjected to
competitive forces at all point of time” observed Mr.
Choudhary. India is considered the IT major and there are
many big companies who have integrated IT systems in their
operations. But SME should also increasingly adopt IT in
their operations for better interaction with their customers,
suppliers and banks. This is very much important because
they need to deal with big companies, Government
departments and banks who have advanced IT systems in
place.
Indian SME should not sop simply at delivering products and
services but invest in R & D activities gradually. Though it
involves cost it will pay back in the long run.
Data over a period of 50 years indicates that contribution
of service sector to GDP steadily increased, he observed.
Hence it is the service sector which needs more IT solution
than others.
SMEs need to think and act on understanding the needs of
the customers, accurate prediction of delivery time,
adhering to delivery schedule and reducing total cost
associated with delivery of personalized products &
services. Wrong commitment and inability to deliver at due
dates will be detrimental for the reputation of SME.
The new perspective of IT is not to simply Automate
processes but to effectively manage the business leading to
customer satisfaction to gain benefits.
When companies cater to the need of demanding customers
there should not be complaints like material shortage,
machine broken down, non availability of operators,
defective parts, wrong planning and false commitment.
It is recommended that SMEs take care of minute details and
service customers with appropriate technologies in place.
Elaborated about usage of cloud computing in various
applications by SMEs in his informative presentation.
Cloud is a style of computing where scalable and elastic IT-
related capabilities are provided as a service to external
customers using Internet technologies. An overview of cloud
computing was elaborated in his presentation and
explained every aspect in details.
The reason why SME should go in for new solutions is
because the traditional systems involve - High CapEx
(Hardware, Software), Lower asset utilization (25-55%),
Power/Cooling costs Server Costs, Not “Green” (Global
Business), and High Depreciation (42-50%).
Small companies are more aggressive with cloud adoption
than larger SMBs (less than 20 employee SMBs adoption
rate is 38%).
Companies in emerging markets (Asia-Pacific) are more
likely to adopt cloud solutions than those in North America
and Europe. Unproven technology and security are the main
concern among SMEs that do not plan to deploy cloud
solutions. Most companies are looking at the cloud as a
viable solution to reducing IT budgets, Verticals such as BFSI,
education, healthcare, retail to rely upon cloud services for
better reach. Governments' continued focus on e-
governance will drive significant adoption of cloud pan
India,
BPO companies in India too look at cloud services for non-
linear and rapid growth.
According to Springboard Research (Jan 2009) SaaS i.e.
software as a service in India will register a compounded
annual growth rate of 76% in the time period of 2007-
2011.
Delegates at the Summit
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Enterprises engaged in exports and imports are exposed to the risk
of foreign currency exchange fluctuations. Especially SME should
analyze this risk, quantify the amount of risk, how to minimise loss by
hedging operations and understand thoroughly the methods,
procedures and documentations involved in risk management.
The key challenges faced by SMEs are non availability of
adequate and timely finance, limited capital and knowledge,
obsolete technology, absence of skilled labour and dealing with
multiple statutory and regulating agencies.
He also explained about various IT solutions that can be used for
managing risk.
The SMEs should develop a customer centric approach and always
be ready and willing to talk to the customers to understand their
needs, problems and suggestions. There are 70 million internet
users and 6 million internet broadband connections.
There are various IT solutions available to SMEs to promote their
products and services like business portals, mobile portals, E-
Commerce, ERP, CRM etc.
Once IT was considered only for big corporate but with the
affordability, the same is within the reach of SMES and they should
take full advantage of this technology to grow their business.
“Forex RiskManagement for SMEs- Challenges andSolutions”
Mr. Nandlal BhatkarCEO, Pyxis Systems Pvt. Ltd.
“Internet Marketingand Advertisingfor SMEs”
Ms. Chhaya Balachandran AiyerFounder Managing Director,
BC Web Wise
Dr. Sanjay Chordiya – Chairman, Pune Region,
SME Chamber of India and President,
Suryadatta Group of Institutes, Pune
Mr. Virendra Jhamb – Chairman, SME
Technology Development Council and MD,
GEA Ecoflex India Pvt. Ltd.
Mr. Girish BhagatSecretary (India), Euro-India Centre
& Director, India Nivesh Ltd.
Mr. Sukh DugalDirector, Studio March Private Limited.
Mr. Surya ChaitanyaBusiness Analyst, Knowledge Matrix India Pvt. Ltd
Mr. Muralidharan RajamaniPresident, IT & Operations, Dhanalaxmi Bank
Mr. Vijay MhaskarVP, Information Management Group, Symantec
Mr. Rajesh Huddar - Head-Information
Security Practice, Mahindra Special Services
Mr. Vinay MasteAVP, Zenith Computers Limited
OTHER EMINENT SPEAKERS
“SME EXPORT PROMOTION COUNCIL” Mr. Montek Singh Ahluwalia
Mr. Nanasaheb B. Patil, IAS
Mr. Chandrakant Salunkhe
Mr. Tamer Taskin – Mr. Anthony J. C. De Sa, IAS
Mr. Joseph Massey Mr. A.
Rameshkumar
Mr. N. C. Vasudevan, IAS
was formally launched at the hands of - Deputy
Chairman, Planning Commission. In picture (from left to right) - Principal Secretary,
Agriculture & Horticulture, Government of Maharashtra, - President, SME Chamber of India,
President, Aegean Region Chamber of Industry (EBSO), Izmir, TURKEY, -
Director, UNIDO Centre for South – South Industrial Cooperation, - MD & CEO, MCX,
- Chairman, SME Chamber of India, Northern Region, New Delhi and MD & CEO, Asia Pragati Capfin Pvt.
Ltd. and - Director General, National Productivity Council, Government of India, New Delhi.
Connecting Indian SMEs Globally
ACTIVITIES & SUPPORT SERVICES
Identify Importers and Buyers
Delegation and Trade Missions
Products & Services Display Facility
Export Promotion
Education & Training on Export - Import
Group Marketing and Branding
LAUNCHING CEREMONY
Become a member of the council to start and enhance exports
(SME Export Promotion Council is a private organisation and Registered u/s 25 of The Indian Companies Act, 1956)
Central Office
3, Upper Gr Flr, Samruddhi Venture Park, Marol MIDC,
Near Hotel Tunga Paradise, Andheri (E), Mumbai - 400 093.
Registered & Correspondence Office
101, Murlidhar Baldev Estate, Near Vikas Estate,
Off. Aarey Road, Goregaon (E), Mumbai- 400 063.
Tel.: +91-22-6667 4444 / 6677 0218 / 19 | Fax: 2874 3543 | Email: [email protected] | Website : www.smeepcofindia.com
CHANDRAKANT SALUNKHE - Founder President
Contact for More Information and Membership
SME EXPORT PROMOTION COUNCIL
Mr. Driver explained in detail about the merits and demerits of
both the funding mechanisms. The SMEs should approach the right
decision making authorities in a PE / VC firm as very few executives
have the power to approve a proposal.
SMEs should have a conservative approach while dealing with an
investor. Normally, it takes 6-12 months to complete a deal and in
some case it could be faster. The enterprise should have sufficient
liquidity to keep running and growing the business. It is prudent to
budget for more capital than projecting for less. The valuation has
to be realistic; otherwise it is difficult to attract investors.
Majority of the investors tend to doubt why only they are
approached and not others. Therefore it is important to have
persistent follow up and at the same time make it clear why this fund
is chosen.
Availing the services of an internal or external CFO is very vital as
the benefit derived out of his advice is much more than the charges
paid to him. A good CFO is often the difference between success
and failure in fund raising. It is important to update the investor with
financial statements.
The project owners should understand the mindset of the investor
with regard to his exit options. It is futile to take a tough stand
which may jeopardise the deal.
Enterprises dealing with investors are advised to take the
assistance of an investment banker who can make the business plan
, introduce them to the right investors and get the
best terms. Sufficient care is to be taken on fixing the fees which
should not exceed 3%.
One should not overestimate the ability of an investor as they too
have limitation. They can add value only in limited areas in which
they have expertise and experience. They are extremely useful in
M&A, overseas information gathering, future fund raising.
A few points need to be taken care of to get the best out of the VC /
PE investor. All the developments within the organisation good or
bad should be brought to the notice as early as possible. The
information should be realistic and accurate. The nominee director
of the investor should not be embarrassed under any circumstances
because he is the most loyal ambassador of the organisation.
“investor ready”
Private Equity means Medium to Long-term Capital Investment in
unlisted companies with High growth potential. The investor takes
substantial Stake in the company and Participate in Management.
The investors are of two types – general partners and limited
partners. Limited partners are like Public pension funds, corporate
pension funds, Insurance companies, High Net Worth individuals,
family offices, Endowments, Foundations, fund of funds, etc.
For Enterprises to access Private Equity funding, the first step is to
assess to own strengths and define short, medium and long term
goals. The second step is to strategize about exercising the growth
opportunity available in the industry. The third step is to crystallize
the optimum resource-requirement including
The next major step is to appoint an adviser. In consultation with the
Advisor the project owner should decide the most suitable funding
which meets the needs.
Preparation of Profiling Documents, Industry analysis, industry
positioning, market mapping, historical performance, Preparation
of Business Plan, Preparation of Financial Plan, Financial modeling
based on outlook scenarios and Crystallization of optimum
based on various methodologies are
chartered out.
The role of the adviser is to shortlist the potential investor, Advising
to select the right one, obtaining detailed information about the
investor, arranging initial investor discussions and subsequent client
meetings. Thereafter the adviser receives the offer of investment
i.e. non-binding Term Sheet. Term-Sheet being the first tangible
proof of investor's interest in investing, it is analyzed thoroughly,
negotiates the commercial terms with the investor and finalise the
best deal to meet the desired objective of the promoter.
The investors carry out due diligence exercise to understand and
ascertain past and present business book, market scope,
demand/supply, customers, Financial details (historical,
projections, liabilities, reconciliation etc), legal details (History,
legal structure, capital structure, ownership etc, book-keeping,
regulatory compliance), personal details - promoters' antecedents,
referral checks.
“funding
requirement”.
“Corporate Valuation”
CONFERENCE ON
PRIVATE EQUITY & VENTURE CAPITAL - OPPORTUNITIES FOR SMEs22nd October 2010 | Hotel Sahara Star, Jade Plus, Mumbai
“SME funding option– Bank Finance Vs.PE /VC Funds”
“Introduction toPE / VC andFund Raising ”
Mr. Cyrus DriverDirector, Helix Investment Advisers
(India) Pvt. Ltd.
Mr. Harish PrabhuDirector, Orion Equity Advisers
Pvt. Ltd
ADDRESS BY EMINENT SPEAKERS
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STypes of Private Equity Investors
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Angel Investors
Venture Capital firms
Private Equity firms- sector agnostic
Sector dedicated Private Equity firms
Country specific Private Equity firms
Country and Sector specific PE firms
Corporate Ventures
MBO or LBO funds
Distressed/ Stressed funds
Mezzanine funds
Offshore and On-shore funds
According to Ventura Intelligence, Private Equity firms
invested in India US$ 2 billion across 88 deals during the
quarter ended September 2010. This takes the total PE
investments in 2010 to US$ 6.6 billion across 231 deals,
more than twice the US$ 2.5 billion invested (179 deals)
during the same period in 2009. Out of these investments,
Real Estate -22%, Manufacturing -8%, IT and ITEs -21%,
Logistic-12%, Banking and Finance-8%, Telecom-11 and
Energy-18%. The Project owners should appoint a right
consultant to advise on – developing an appropriate
financial strategy, positioning the company optimally,
approaching the right investor, negotiating the best
possible terms and conditions, actively managing the entire
process and leverage management and time resources.
1) BANK FINANCE: Usage towards Working Capital
2) PRIVATE EQUITY: Usage towards Growth Capital
IDEAL FOR BANK FINANCE
IDEAL FOR PRIVATE EQUITY
Pre requisites:
Challenges:
Benefits:
Pre requisites for getting PE/ VC investor:
Challenges:
Benefits:
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Strong Balance sheet / Cash Flows
Adequate Equity funding
Collaterals of Personal & Business Assets
In absence of credit rating, relationship with the Bank is
paramount
Bank relies of strong trade references
Overleveraged balance sheet / in adequate equity
Obsolete technologies
Threats from imports or large scale manufacturers
Family run businesses & therefore insufficient
professional skills
Mind set issue on accounting practices; affects capital
raising
Cost effective
Equity ownership is not compromised and hence
management control
Flexibility of borrowing and repaying
Promoters background must be sound
Business & its model can have sustainability in margins &
growth
Potential of high growth and scalability in business
Funding only to finance capacity growth
Transparency in business activities
Willingness to professionalize
Valuation
Sharing of management control
Exit route for PE investors
Access to growth Capital
Integration in global business models; if PE provided is a
global player
PE investment builds on better perception of the company
& its promoters
Capital Expansion / Diversification
Working capital / Credit requirements
Imports
Contract funding
To meet foreign / export contract
Warehousing Finance
Capital Expansion / Diversification
Acquisitions
New Real Estate project
Contract funding
One Time Settlement
“SME'sfundingoptions ”
Mr. Girish BhagatSecretary (India)
Euro-India Centre and
Director, India Nivesh Ltd.
CO NNECTInaugural Issue, January 2011 25
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The key highlights of investing companies are that they
invest in equity of unlisted and privately held companies.
They normally have minority stake in the company. Venture
capital is meant for start-up and early stage funding while
private equity is oriented towards growth or expansion.
Alignment of interest is necessary and critical for success.
The companies (Project Owners) look for capital, valuation,
fund track record, value adds possibility and compatibility
of the private equity fund provider.
The investors look for promoter(s) management track
record, business plan, corporate governance and
transparency, promoter(s) readiness to partner and exit
opportunity.
Preparing a business plan
Short Listing of investor
Initial round of discussion
Presentation of Investment Opportunity & Fund Meeting
Preparation of Term Sheet
Due diligence process
Finalisation of terms and condition
Execution of share subscription and shareholders
agreement
Actual investment
It is advisable for the SMEs to appoint an investment banker
to deal with the investor as they are better equipped to
convince the investors to invest in the project.
This is the first document sent to the prospective investor. It
should be a concise, precise and comprehensive document
on the company & its business. It should outline the vision and
path forward clearly, highlight key differentiator or
strengths, if any, viz. market, products, strategy etc.
The plan is a tool to capture investor attention. For investor it
is a document to understand the company, its business and
management. The investment memorandum should contain
Company & its History, Current business & Operations,
Promoters & Management capabilities, the Industry the firm
belongs to, its products and services, business strategies,
financial history and projections as well as the exit
mechanism etc.
This process involves listing out the various prospective list of
private equity and venture capital firms. Next the company
should gather information about the focus of the funds,
whether the fund is in investment or divestment phase, the
portfolio of the fund and the managers of the fund.
After careful scrutiny a prospective investing fund is short
listed. Initial correspondence expressing interest and
seeking information is resorted to. After favourable reply a
meeting with the funding firm is arranged.
The project owners should pitch their proposal in an efficient
manner to attract the investor. They should communicate
clearly the company's business and future road map. The
strength of the company should be highlighted
quantitatively & qualitatively. The business plan should take
into account current constrains – resources, market
restrictions etc. It is imperative to note that the proposal
should not hide any weakness of the company and rather
address it properly as to how the company will overcome
them.
This process analysis the general nature of the business, the
competition in the market and the prospects for growth. It
also deals with new business opportunities matching with the
capabilities of the company. This is normally carried out by
fund team or external consultant.
This analysis the performance and the present financial
position of the company. A minimum of past 2 years of the
financial statement are scrutinized thoroughly. The
dependence of the customers on the products and services
of the company, profit margins and cost structure, the major
drivers of the business and the past transaction are given
due weightage. This is carried out by the audit firm
identified by the investor. Maintenance of proper books of
account and MIS system are essential.
Legal compliances of the business and statutory
compliances are dealt with by this process. The areas
covered by this process include – assets, leases, employment
contracts, intellectual properties and litigations. It is carried
out by a legal firm appointed by the investor.
This document describes in detail about the following:
Share Subscription & Shareholders' Agreement outlines
the terms & conditions of investment
Promoter(s) covenant – non disposal of shares,
management control, non-competes etc.
Investors Rights – veto power, board representation and
information access
Exit Provisions / Mechanism
The Process Flow Chart
Business Plan
Short Listing and Fund Meeting
VC / PE investment Pitch
Business Due Diligence
Financial Due Diligence
Legal Due Diligence
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DUE DILIGENCE
Finalization of Investment Term
“Procedure andDocumentation forPE / VC Funds”
Mr. Shaji VargheseVice President,
BTS Investment Advisors Ltd.
CO NNECT Inaugural Issue, January 201126
The Corporate Advisors are engaged in providing corporate
advisory services such as - Financial Restructuring, recapitalizing
and M&A services, Advise growth, Technology citation, patent
analysis for M&A. They are also into investment advisory services
like - Invest capital in private and public companies via
PIPE/Private equity deals.
SMEs face increased globalization, stronger competition, a high
pace of scientific and technological change with limited
resources. They need access to increasingly sophisticated
innovation tools and tactics – like new technologies, competitive
intelligence, partnerships, expertise, sustainable development
practices, access to financial resources and international
strategies.
Most of the enterprises cannot meet these complex management
decision needs on their own due to lack of adequate
Management training. Other problems are Non-availability of a
Business plan leading to ad hoc decision making, Lack of Business
& Financial discipline, Lack of Forward planning resulting in
unforeseen situations, lack of Project management skills, Lack of
internal systems and standard operating processes, Inability to
attract & retain highly trained manpower, and lack of succession
plans and new generation not available for such causes.
SMEs also face other challenges like - Inadequate attention to
financial discipline and cash flow control (controllable &
uncontrollable) affecting even their very existence, lack of
available funds (perpetually caught up in this vicious cycle),
inability to pay competitive wages / salaries to trained
professional, lack of awareness of IPRs and legal issues (IPRs /
Patents / Copyrights /Registrations), Government harassment,
and union activities.
But there are also positive developments such as availability of
capital for the right projects, new entrepreneurs setting up
profitable ventures, availability of qualified and skilled
employees, capacity of the market to absorb new products and
services and new business opportunities in India and abroad.
During their business operation, SMEs have to face many risks.
First, Management risks related to general management skills,
methods, training the employees, changing the attitude of
executives and staff, perpetuation of the organisation as an
ongoing concern.
Secondly, the financial risk consists of lack of financial plans, ad-
hoc financial decisions, lack of funds and cash flow planning.
Thirdly, the marketing risks relate to dependence on new
customers, extending the reach, facing the competition and
meeting the changing need of the customers. Fourthly, there are
also technology risk encompassing scope of production,
maintaining quality and reducing cost, need for perpetual R & D,
dealing with technology obsolesce and lack of information on
intellectual property rights. Fifthly, the human resources risk,
which has to deal with selecting and retaining the right
employees, formulating continuous training at all levels, pay
competitive payments, evaluation and motivation. Attrition is the
major problem in highly technical and knowledge based
industries.
The investors are willing to fund the SMEs if they have a good
management team with experience and expertise in their field of
activities, have clear operation, manufacturing and marketing
strategies, growing market for the company's products and
services, compliance with statutory and legal formalities,
effective risk management and good governance.
There are four valuation methods of an enterprise - Asset
valuation method, Capitalization of income valuation method,
Cash Flow multiple Method and Multiplier or market valuation
method.
Asset valuation is used when a company is asset-intensive
Retail businesses and manufacturing companies fall into this
category
This process takes into account the following figures, the sum of
which determines the market value:
Fair market value of fixed assets and equipment (FMV/FA)
This is the price one would pay on the open market to purchase
the assets or equipment (less depreciation)
Leasehold improvements (LI) - These are the changes to the
physical property that would be considered part of the
property if you were to sell it or not renew a lease
Owner benefit (OB) - This is the seller's discretionary cash for
one year; the enterprise can get this from the adjusted income
statement
Inventory (I) - Wholesale value of inventory, including raw
materials, work-in progress, and finished goods or products
This method places no value on fixed assets such as equipment,
and takes into account a greater number of intangibles. This
valuation method is best used for non-asset intensive businesses
like service companies giving each factor a rating of 0-5, with 5
being the most positive score. The average of these factors will be
the which is multiplied by the buyer's
discretionary cash to determine the market value of the business.
The factors are:Owner's reason for selling equity - Growth driven or exit
drivenLength of time the company has been in businessLength of time current owner has owned the businessDegree of riskProfitabilityLocationGrowth historyCompetitionEntry barriersFuture potential for the industry/marketCustomer baseTechnology/IPR
Asset Valuation Method
Capitalization of income Valuation Method
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"capitalization rate"
“Valuation Approaches- Discounted cash flow,Relative Valuation etc.”
Mr. Rahul PatwardhanVice Chairman and MD,
IndiaCo Ventures Ltd
CO NNECTInaugural Issue, January 2011 27
The investors are ready to invest in a small and medium size
company depending upon the experiences and capabilities of the
promoters and their management team, the quality of the business,
the terms and conditions of the deal and the opportunities to exit at
appropriate time.
The team should have integrity, Ambition for success, Passion for
business, Credibility and experience, Professional organization
and Attention to systems and processes.
The business should have satisfied customers with a potential to
grow to attract the investor, high revenue yielding, have sustainable
and competitive advantage, easily scalable coupled with a
growing market.
The deal document should mention about the valuation of the
business, the voting rights, precedent conditions, and earlier
milestones.
The investors take into account a viable time frame for investing in
the company, IRR and opportunities for exit through IPO, Strategic
Scale and Promoters buy back.
Developing a sense of trust and comfort
Ability to add value other than capital
Assistance in developing a robust management team
Flexibility on the part of management to fresh ideas
Managing relationship with a focus on creating value for all
stakeholders
Management Team
Quality of the Business
Deal Terms
Exit and Payback of Investment
Ingredients for Success
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The Method:
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Add up the total ratings, and divide by 12 to come up with an
average value to use as the
Capitalization rate
Buyers discretionary - a figure for "buyer's discretionary cash"
which is 75% of owner benefit
Seller's discretionary cash for one year as stated on the income
statement
Multiply the two figures to determine the market value
This formula focuses on the enterprise cash flow and is used most
often for valuing businesses whose value comes from their ability
to generate cash flow and profit.
It uses a fairly simple formula - multiply the owner benefit times
2.2727 to get the market value.
The multiplier takes into account standard figures such as a 10%
return on investment, a living wage equal to 30% of owner
benefit, and debt service of 25%.
The multiplier also takes into account “beta” or the risk associated
with the cash flow (discounted similar to depreciation)
This approach finds the value of a business by using an "industry
average" sales figure as a multiplier. This industry average
number is based on what comparable businesses have sold for
recently. As a result, an industry-specific formula is devised,
usually based on a multiple of gross sales.
This is where some people have trouble with these formulas,
because they often don't focus on bottom line profits or cash flow.
Plus, they don't take into account how different two businesses in
the same industry can be.
Travel agencies - 0.05 to 0.1 X annual gross sales
Ad agencies - 0.75 X annual gross sales
Retail businesses - 0.75 to 1.5 X annual net profit + inventory +
Equipment
Cash Flow Multiple Method
Multiplier or market valuation Method
“PE / VCexpectationsfrom SMEs”
Mr. Gaurav GuptaExecutive Director
Decimal Point Analytics
Delegates at the Summit
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Mr. Ravindra Kumar – Senior Banker and Regional
Adviser, Standard Bank, PLC addressing the delegates on
“Preparing the mindset for PE/VC”
Mr. Mangesh Pathak“Understanding Term
Sheets & Selecting the Right Investor”
– Founder Member, Ambit Pragma
Ventures addressing the delegates on
Mr. Sushrut Chitale – Director, Infogenia addressing the
delegates on “A Guide to Due Diligence ”
Ms. Sangeeta Modi“Structure of VCs / PEs and their
mandate”
– Founder, Access Asset Managers
addressing the delegates on
OTHER EMINENT SPEAKERS
Mr. Chaitanya Shah - CEO, CKPP Associates addressing
the delegates on “Expectations of Investors from
Entrepreneurs”
Mr. Rammohan Bhave - Managing Director, Consult FRS
strategy consultants Pvt Ltd addressing the delegates on “The
Role of CFO for Business Growth”
Mr. Ajit Anekar – Partner, Kochhar & Co addressing the
delegates on “Legal framework”
Ms. Sonali Tipre – CEO, Margin's view Management
Services addressing the delegates on “Preparation of viable
Business Plan”
CO NNECTInaugural Issue, January 2011 29
CO NNECT Inaugural Issue, January 201130
SME Chamber of India is having in-house financial professional & experts in various fields and we are also creating a panel of leading
Financial Advisory Firms, Banks, Financial Institutions and retired professionals from Private, Government and banking sectors for rendering
expert advisory services to Tiny, Micro, Small, Medium and Large as well as prospective entrepreneurs.
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CFO Service
Preparation of Financial Results and Analysis
Preparation of Bank Loan Documentation
Strategic Business Advisory
Cash flow and Budgeting Analysis
Raising Private Equity and Venture Capital
Preparation for Joint Ventures & International Collaborations
Business Performance Management Solutions (BPM)
Accounting Services as per IFRS
Financial and Statutory Due Diligence
Preparing SMEs for listing on SME Exchange
Mergers and Acquisitions
Turnarounds and Debt Reduction
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Avoidance of NPA
Revival of sick units and Restructuring
Assistance in availing government schemes and incentives
Business performance management
Drafting legal agreements and documents
Raise funds for expansion, modernisation and diversification
Taxation Services – Planning and Preparation
Financial Forecasts and Projections
Company Secretary Services
Research and of listed and unlisted companies
Resolve Problem & issues related to banks & other institutions
Goods and Services Tax
IPO Advisory services
Credit Rating Facilities
Accounting Software Selection and Implementation
Obtaining incentives and financial assistance from govt. agencies
Cost Analysis, Cost reduction & liquidity improvement programs
Risk Analysis
Product pricing Analysis
Liaison with for ROC, Banks, PE/VC, and govt. agencies
Insolvency and Liquidation
Arbitration and re-conciliation
Other Financial & Specialised Services for SMEs as per the requirement:
Small and Medium Enterprises contribute significantly towards industrial output, exports and employment generation for the economic
growth of the Nation. Finance remains one of the major concerns for the SMEs. Many of the entrepreneurs are technically sound but lack in
knowledge and presentation of financial matters. An entrepreneur has to play multiple roles in managing his business right from Planning,
Purchasing, Design, Production, Quality Control, Marketing, Finance, Man Power, Public Relations, New business Developments and targeted
growth. Due to their small size they cannot afford to appoint highly qualified financial full-time executives to manage their finance, interact
with the bankers and regulating agencies as well as comply with the statutory requirements.
With a view to provide efficient and cost effective financial management solutions,
have initiated the division This Council consists of full time of financial experts to
provide appropriate advice and assistance to SMEs on-call or regular basis by appointing a panel of members, partners, associates,
consultants and advisors-ex banker, retired government officials, CFOs, CAs, Company Secretaries and experts.
Small & Medium Business Development Chamber of
India (SME Chamber of India), Maharashtra Industrial and Economic Development Association, India International Trade Centre (IITC-
INDIA) “CFO and Financial Advisory Council for SMEs”.
ABOUT CFO & FINANCIAL ADVISORY COUNCIL FOR SMEs
SUPPORT SERVICES & ASSISTANCE
Prof. Suresh D. Tendulkar
“CFO & Financial Advisory Services for SMEs”
Mr. Chaitanya Shah Mr.
Chandrakant Salunkhe Mr. K. R.
Sharma Mr.
Ravi Shankar
Round Table Conclave on The importance of Financial
Services for SMEs
- Director, Central Board of RBI and Former
Chairman, Economic Advisory Council to the Prime Minister has
launched initiated by
SME Chamber of India and other dignitaries from (left to right)in the
picture - - CEO, CKPP Associates.,
- President, SME Chamber of India,
- Director, MSME Development Institute, Maharashtra and
- Founder Director, Brickwork Ratings India Pvt. Ltd
during the
organised by SME Chamber of India on 4th
November 2009 at Mumbai.
LAUNCHING OF THE COUNCIL
CFO and Financial
Advisory Council
for SMEs
CFO and Financial
Advisory Council
for SMEs
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Friday, 9th July 2010 | Hotel InterContinental The Lalit, Mumbai
Roundtable Series - II
EMPOWERING INDIAN SMEs - VISION 2020
Mr. C.B. Bhave -
Mr. Madhu Kannan -
Chairman, Securities & Exchange Board of India (SEBI) delivering the keynote address at Roundtable Series-II
(on the dias from left to right)
MD & CEO, Bombay Stock Exchange Ltd.
Mr. Hemant Shah Mr. Chandrakant Salunkhe
Mr. Joseph Massey
Mr. A. Rameshkumar
- Chairman & Managing Director, Ackruti City Ltd., -
President, Small & Medium Business Development Chamber of India (SME Chamber of India), - MD and
CEO, MCX Stock Exchange Ltd., - CEO & MD, Asia Pragati Capfin Pvt. Ltd. and Chairman, Northern
Region, SME Chamber of India and
KEYNOTE ADDRESS ON “SME STOCK EXCHANGE – NEW OPPORTUNITIES FOR GROWTH”
Mr. Bhave congratulated the excellent services provided by the SME Chamber of India to the SME Community. While
addressing the Roundtable he touched upon many important aspects concerning SMEs in detail.
About the proposed SME Stock Exchanges, he said that there were some unsuccessful attempts which somehow failed for
various reasons. There was OTC which did not work. Then there were interconnected stock exchanges, an alliance of
regional stock exchanges which also did not work due to the advent of new technologies. The investors could trade
directly through BSE or NSE. Now there is an attempt initiated by Bombay Stock Exchange, which is under active
consideration.
It took two years to issue the guidelines after analysing what went wrong. We have to keep on trying. If we fail in our
attempts and if we do not try we will fail. We will be taking a conceptive approach. There is a general feeling that the
compliance cost is very high for the SME and there is a demand for reducing it. If we think of reducing the compliance cost
and do not provide the necessary information to the investors, it is not justifiable. Therefore we need to strike a balance.
Since SMEs can not be considered on the same level as that of Corporate, SEBI is putting its best efforts to reduce the
compliance clauses as far as possible in SME Stock Exchange. But at the same time safeguarding the interests of the
investors and stake holders are important to SEBI being the Regulator.
Small companies are not resorting to good governance because its not practical for them. In our life, we do many
transactions without the paraphernalia of a formal contract. Day in and day out lot of transactions get concluded,
deliveries made and payments received based on ethical practices. Without ethics these transactions are impossible to
happen. The basic foundation of a business is ethics. “My word is my contract” is the principle on which the ethical
businesses are run. My suggestion to SMEs is that “do not compromise on good ethical governance to avoid the cost of
procedures and paper work.
In Indian Stock Exchanges the numbers of transactions are very large while the ticket size is small. We need to set up
systems to reduce the cost of transaction which is a real challenge. If we can do so, the world is our market.
CO NNECT
CO NNECT Inaugural Issue, January 201132
H.E. Mr. Paul A. Folmsbee
Roundtable Series-II “Empowering Indian SMEs - VISION
2020”. Mr. Madhu Kannan -
Mr. Chandrakant Salunkhe
Mr. Hemant Shah
Mr. A. Rameshkumar
Mr. D. R. Dogra
- Consul General, USA, Mumbai
inaugurating (left) and delivering the inaugural address (right) at
the
(Other from Left to Right) MD &
CEO, Bombay Stock Exchange Ltd., -
President, Small & Medium Business Development Chamber of
India (SME Chamber of India), - Chairman &
Managing Director, Ackruti City Ltd., - CEO
& MD, Asia Pragati Capfin Pvt. Ltd. and Chairman, Northern
Region, SME Chamber of India and - MD & CEO,
Credit Analysis & Research Ltd.
INAUGURATION
Mr. Paul highlighted the role played by the SMEs throughout the
world and its contribution to the economies of the respective
countries. There need to be greater connectivity between SMEs
around the world. An SME in US might be interested to contact a
SME in India for manufacturing or marketing activities. But we
are not seeing that connectivity happening in a big way. There
is a good economic tie between our country and the
opportunities are abundant for SMEs in both the countries. The
export of US goods to India has increased five times from 4
billion USD in 2002 to 19 billion USD in 2009. The last year
there have been exports of 40 billion USD of goods and 20
billion USD of services totaling into a 60 billion USD. In 2009
India exported 21 billion USD to USA. The SMEs are the
economic backbone of USA and 97% SMEs have less than 20
employees. US Small Business Administration offer counseling
and assistance to SMEs to establish business contacts, but a lot
need to be done to collect the Indian and US SMEs. Today
Washington apples are available in India and Boeing supplies
aircrafts to the Indian companies.
In the developing countries like Africa and Middle East the
major impediment for growth is the bad governance. Many of
the SMEs are family owned and lack transparent business
operations and internal management. There are also
corruptions at all levels which hampers the growth. The SMEs
should delegate and grow with good governance so that the
interest of the family and the other stake holders like banks,
suppliers are taken care of which will result in scaling up the
profitability. Good governance is an important element when a
SME enter into global market. Business ethics enables an SME to
access capital. It is my suggestion that Institutions like the SME
Chamber of India should be instrumental in pushing the SMEs
towards good governance.
H. E. Mr. Paul A. Folmsbee - Consul General, USA, Mumbai
addressing the delegates.
Mr. Shah, who was awarded “Entrepreneurship Excellence
Award in “Realty and Infrastructure Sector” in his address said
that India is a different country compared to other countries
where most of the population are traditionally excellent
entrepreneurs. According to him every Indian is an entrepreneur
and given the right opportunity and finance they can become
world class entrepreneurs. He emphasised the need for
concerted efforts from different professionals like CAs,
Lawyers, Engineers etc. so that different expertise and
experiences can be shared and utilised for establishing world
class enterprises and businesses. Indian entrepreneurs have
great ability and potential. The only requirement is right
atmosphere, opportunity and finance. As per Mr. Shah, this can
be achieved through collective efforts.
Mr. Hemant ShahChairman & Managing Director, Ackruti City Ltd.
ADDRESS BY DIGNITARIES
Inaugural Issue, January 2011 33 CO NNECT
Mr. A. Rameshkumar - MD & CEO, Asia Pragati Capfin Pvt. Ltd.
& Chairman, Northern Region, New Delhi, SME Chamber of India
50% of the employment is generated by the SME Sector besides
contributing 20% towards GDP. If the Nation is to prosper by 2020
the SMEs should concentrate on ethical business practices and
corporate governance and they should aim to get the maximum
awards for corporate governance. SMEs have inherent quality to
weather adverse conditions and are the potential suppliers to
large corporates. Despite these, it is ironical to note that only 30%
of the SMEs have access to bank finance. This goes to prove the
enormous potential to the banking and other financial sectors to
tape the balance 70% of the SME market. Banks should make an
attempt to identify and treat good and high performance SMEs in
part with the Corporate with regard to charging interest. SMEs also
have little exposure to availing fund from venture capital and
private equity, which they should explore seriously. All the banking
transactions should be made online compulsorily so that the
harassment at various levels can be avoided. There is also a need
for an active secondary market for the SMEs. It is advisable to
have a separate mutual fund focused on SMEs. SME representative
bodies like SME Chamber are doing a good job in supporting the
SMEs but they should broaden their developmental activities. A
special funding should be dedicated for those SMEs engaged in
environmental protection. Finally, the SMEs is a strategic sector for
the development of the Indian economy and with a proper
assistance and guidance they will emerge successful in 2020.
It is a coincidence and interesting fact to note that this Roundtable is
organised on the foundation day of the SME Chamber of India
which is also the foundation day of the Bombay Stock Exchange. It
is difficult to club all the SMEs as an homogenous body because
they vary considerably in their capabilities, turn over, technology
employed, the variety of products and services etc. Moreover,
many of the SMEs are from the unorganized sector. This poses
interesting challenges to all concerned. As per the information
available from the Prime Minister's Task Force, 1/3 of the
challenges of the SME Sector relates to the finance. Timely access
to the finance, availability of the finance and the cost of access are
the major problems. Banking sector and security market are the two
pillars of the economy.
There should be a well organised market mechanism, regulators
and exchanges for the growth of the capital market. With the well
managed stock exchange the SMEs can highly leverage their
capabilities. In UK and USA due to the availability of a separate
SME Exchange there are many early stage venture capitalists
always ready to encourage the entrepreneurs with innovative
ideas. The reason behind this is their ability to exit at appropriate
time through the Exchange. “Mother” in Japan and Exchanges in
China are also actually supporting SMEs. By listing in the SME
Exchange the enterprise can scale up their activities attract good
employees and obtain banking loans on attractive terms.
Mr. Madhu Kannan - MD & CEO, Bombay Stock Exchange Ltd.
Mr. Chandrakant Salunkhe explained the role played by the
Chamber for creating awareness amongst he MSME Sector on
various aspects to be able to grow and become globally
competitive. Most of the SMEs are still not aware about the various
incentives and schemes of the Government as well as financial
products available for their business growth. Therefore the SME
Chamber is committed to take up the cause of this Sector and
towards this end has been organising various programmes on
different subjects to use new ideas for growth and compete not only
in India but globally.
He reiterated the need for setting up a SME Stock Exchange
without any further delay so that the SMEs can raise capital for their
various business needs.
Importance of Good Governance and Business ethics was also
emphasised. Unless the SMEs adopt sound principles of business
ethics they cannot be world class entrepreneurs, he said.
Mr. Chandrakant Salunkhe - President, SME Chamber of India
Inaugural Issue, January 201134CO NNECT
In order to be successful it is essential that the SMEs should
create, enhance and sustain international competitiveness.
In international perspective the domestic capabilities and
foreign competition in India should be given due
consideration. New SMEs who are planning to grow cannot
succeed without international engagement. Timely and cost
effective finance are the major thrust areas for the SMEs.
Exim Bank is offering lines of credit to prime contractors and
sub-contractors directly operating in overseas market.
These lines of credit are covering 130 countries with a
outlay of 4.5 billion USD. There are also other services like
factoring and loans for technology upgradation. The Exim
Bank in collaboration with Asian Development Bank is
creating a special fund for SMEs to cover trade, services
and investment. Overseas companies coming to India brings
along with them their preferred suppliers and bankers.
Indian SMEs operating outside India should also follow the
same practice. They should demonstrate their excellence to
the industrialised markets. Exim Bank also encourages trade
within Asia through a Forum of Asian Exim Bank. The Exim
Bank of China is doing a commendable job in this regard.
There are also development banks in the BRIC countries
aimed at SMEs.
Exim Bank also supports SMEs towards marketing strategies
with soft loans and helps them in establishing linkages and
alliances in the emerging markets. The SMEs should also
move up in the quality value chain and subject themselves to
rigorous examinations. Exim Bank also assist grass root
rural SMEs to explore global markets besides assisting
sectoral industries like machine tools.
Mr. S. R. Rao - President, Global Procurement Consultants Ltd.
and Former Executive Director, Exim Bank of India
The lending of the banking sector to MSME stands at
3,75,000 crore. This has grown 67% in 2008. Due to
recession it came down to 21% and again rose to 40% in
the current year. Within 4 years, the lending to MSME will
touch 8 lakh crore. Many of the banks, realising the
importance of the SME Sector have set up separate MSME
Department. Banks have their own inherent operational
problems and they are sensitizing their employees to
minimise the turn around time. Separate SME hubs at zonal
level, centralised credit processing cell and simplified forms
are being introduced. Banks also offer collateral free loans
upto Rs One crore under CGTMSE Scheme. It is also
mandatory not to insist on collateral for loans upto Rs. Ten
lakh. Bank of India have assisted 25, 000 MSMEs to the tune
of Rs. 1310 crore. The Prime Minister's Task has
recommended 60% of the credit to the MSME and Bank of
India is already lending 45% to cover manufacturing and
service sector. Our bank has started a “rural development
training programme” in lead districts under which farmers,
micro enterprises engaged in art and craft are trained,
provided finance and supported for their marketing
activities. The Bank is also adopting industrial clusters and
hundreds such clusters have been identified and provided
tailor made schemes. The SME Development Centres along
with other related SME Agencies should work for the total
development of the SME Sector. SMEs with good credit
rating are provided with concessional rate of interest upto
100 basis points. The Banks also expect from the SME
Customer a transparent dealing, good corporate
governance, improved quality of product and services and
better management.
The SME should graduate themselves from a proprietorship
to a partnership to a joint stock company to attract venture
capitalists and foreign currency funding.
Mr. M. Narendra - Executive Director, Bank of India
Delegates at the Summit
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SMr. C.B. Bhave - Good Governance &
Business Ethics and SME Stock Exchange”
Mr. Bhairav B. Kothari
Mr. Hemant Shah Mr. Chandrakant Salunkhe
Mr. Joseph Massey , Mr. A. Rameshkumar
Mr. Madhu Kannan
Chairman, Securities & Exchange Board of India (Centre) releasing the White Paper on “
at 15th Foundation Day Function of Small & Medium Business Development Chamber of
India (SME Chamber of India) on 9th July 2010 at Mumbai. (From left to right) - Managing Director, Super
CFO Services Pvt. Ltd., - Chairman & Managing Director, Ackruti City Ltd., - President,
MIEDA, - MD & CEO, MCX Stock Exchange Ltd. - Chairman, Northern Region, SME
Chamber of India and - MD & CEO, Bombay Stock Exchange Ltd.
Release of White Paper on”Good Governance & Business Ethics and SME Stock Exchange”
Mr. Chandrakant Salunkhe - President, SME Chamber of India felicitating for Supporting SMEs
Mr. C.B. Bhave
Chairman, SEBI
H. E. Mr. Wang DonghuaConsul General, People’s Republic of China
H. E. Mr. Paul A. Folmsbee
Consul General, USA, Mumbai
Ms. Sangeeta Modi – Founder, Access Asset Managers
During the past 10 years there has been no venture capital
funding focused at SMEs. In the last 5 years, there were only
4 or 5 SME focused funds and today it may be around 15 to
20. In Indian context, the demand for funds and its supply
represent a triangle and inverted triangle. This shows that
majority of the VC funds would like to concentrate on big
accounts while the requirement for FC funds is at the lower
level. Realising the importance of the SME Sector more and
more VC are entering into SME Sector. In the next five years
more SME focused funds will be available. As of now SMEs
with Rs. 20 crore revenue are favoured and those with 4 to
20 crore are left out. However, by 2020 SMEs will be able
to attract more VC funds.
One cannot expect the SMEs to comply with all the
operating norms and procedures of Corporate
Governance applicable to the big Corporate due to their
limited resources. Most of the SMEs are a single man show
and his decision is final in all business matters. It is commonly
felt that the smaller companies lack integrity, transparency
in their accounts and taxation issues. Apart from the several
problems the major one faced by the SMEs are access to
adequate and timely finance, poor marketing strategies
and obsolete technology. SMEs start their enterprise with
the family owned funds and obtain bank credit for further
needs. SMEs with better accounting policies and good
corporate governance do get better ratings from the credit
rating agencies.
Mr. D. R. Dogra - MD & CEO, Credit Analysis & Research Ltd.
CO NNECT
i NDIAN SME
KNOWLEDGE FORUM
A Think Tank to enhance knowledge of SME Sector
“INDIAN SME KNOWLEDGE FORUM”
Mr. Montek Singh Ahluwalia
Mr. Nanasaheb B. Patil, IAS
Mr. Chandrakant Salunkhe Mr.
Montek Singh Ahluwalia
Mr. Tamer Taskin
Mr. Anthony J. C.
De Sa, IAS
Mr. Joseph Massey Mr. A.
Rameshkuma Mr. N. C.
Vasudevan, IAS
was officially
launched at the hands of - Deputy
Chairman, Planning Commission of India on 21st February, 2009 at
Mumbai. In picture (L to R) - Principal
Secretary, Agriculture & Horticulture, Government of Maharashtra,
- President, SME Chamber of India
- Deputy Chairman, Planning
Commission of India, – President, Aegean Region
Chamber of Industry (EBSO), Izmir, TURKEY,
- Director, UNIDO Centre for South – South Industrial
Cooperation, - MD & CEO, MCX,
r - Chairman, SME Chamber of India (Northern Region) and MD & CEO, Asia Pragati Capfin Pvt. Ltd. and
- Director General, National Productivity Council, Government of India.
LAUNCHING OF THE FORUM
ADVISORY COMMITTEE (2009 - 2012)
ADVISORY COMMITTEE MEMBERS
FOUNDER PRESIDENT
MR. D. R. DOGRA
MD, CARE Ratings
CHAIRMAN
PROF. SURESH D. TENDULKAR
Director, Central Board of RBI and
Former Chairman, Economic Advisory Council
to Prime Minister
MR. CHANDRAKANT SALUNKHE
Founder President,
Small & Medium Business
Development Chamber of India
DR. ANIL KHANDELWAL
Former CMD,
Bank of Baroda
MR. R. M. NAYAK
Chairman, Sun Capital
Advisory Services Pvt. Ltd
MR. RAVI SHANKAR
Founder Director, Brickwork
Ratings India Pvt. Ltd
MR. A. RAMESHKUMAR
Chairman,
SME Chamber of India,
Northern Region, New Delhi
MR. CHAITTANYA SHAH
CEO, CKPP Associates
Tel: +91 - 22 - 6667 4444 / 6677 0218 / 6150 9800 | Fax: 2874 3543
Email: [email protected] | Web: www.smeknowledgeforum.com
Registered & Correspondence Office
101, Murlidhar Baldev Estate, Nr Vikas Estate, Off Aarey
Road, Goregaon (E), Mumbai - 400 063.
Central Office
3, Upper Ground Floor, Samruddhi Venture Park, Marol
MIDC, Nr. Hotel Tunga Paradise, Andheri (E) Mumbai - 93
For Assistance and Support Services Contact
INDIAN SME KNOWLEDGE FORUM
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Friday, 9th July 2010 | Hotel InterContinental The Lalit, Mumbai
Presentation of National Level
SME & ENTREPRENEURSHIP EXCELLENCE AWARDS
AND BEST YOUNG ENTREPRENEUR AWARDS
Mr. C. B. Bhave - Chairman, Securities & Exchange Board of India (SEBI)
SME & Entrepreneurship Excellence Awards and
Presented National Level
Best Young Entrepreneur Awards
SME & Entrepreneurship Excellence Award in Realty &Infrastructure Sector Awarded to
– Chairman, Ackruti City Ltd.Mr. Hemant Shah
SME & Entrepreneurship Excellence Award for SupportingSMEs to . The award accepted by
- Executive Director, Bank of India.Bank of India Mr. M.
Narendra
SME & Entrepreneurship Excellence Award in Infrastructure& Hospitality Sector Awarded to
- CMD Phadnis Infrastructure Ltd.Mr. Vinay Phadnis
SME & Entrepreneurship Excellence Award in EducationSector Awarded to -Prof. Dr. Sanjay B. Chordiya Founder
President & Chairman, Suryadatta Group of Institutes.
SME & Entrepreneurship Excellence Award in ManufacturingSector Awarded to - CMD, Bafna
Pharmaceuticals Ltd.Mr. Mahaveer Bafna
SME & Entrepreneurship Excellence Award in ManufacturingSector Awarded to - Managing
Director, GEA Ecoflex India Pvt. Ltd.Mr. Virendra Jhamb
CO NNECT Inaugural Issue, January 201138
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SME & Entrepreneurship Excellence Award in Service SectorAwarded to - Anmol Finsec Ltd.Mr. Mukesh Shah
SME & Entrepreneurship Excellence Award in ManufacturingSector Awarded to - CMD, SMI Coated
Products Pvt. Ltd.Mr. Ajay Mehta
SME & Entrepreneurship Excellence Award for PromotingSMEs Awarded to - Chief Editor, SME
World MagazineMr. Rajen Kumar
Best Young Entrepreneur Award in Retail & MarketingSector Awarded to - Managing Director,
The Loot (India) Pvt. Ltd.Mr. Jay Gupta
Best Young Entrepreneur Award in Manufacturing SectorAwarded to - CMD, Chetas
Control Systems Pvt. Ltd.Mr. Mahesh S. Deshmukh
Best Young Entrepreneur Award in Service Sector Awardedto - CEO, Atherstone Investor
Communications Ltd.Mr. Arvind Agarwal
Best Young Entrepreneur Award in Financial Service SectorAwarded to - Managing Director,
Super CFO Services Pvt. LtdMr. Bhairav B. Kothari
Best Young Entrepreneur Award in Social Service SectorAwarded to - MD, Society for Educational
Welfare & Economic DevelopmentMr. Anirban Roy
CO NNECTInaugural Issue, January 2011 39
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INDIAN YOUNG ENTREPRENEURS’ FORUM
Networking | Motivation | Education I Empowerment
Contact for Membership, Assistance and Support Services
Tel: +91 - 22 - 6677 0218 / 6667 4444 / 6150 9800 | Fax: 2874 3543 | Email: [email protected] | Web: www.youngceoindia.com
101, Murlidhar Baldev Estate, Nr Vikas Estate, Off Aarey Road, Goregaon (E), Mumbai - 400 063.
3 & 4, Up Gr Floor, Samruddhi Venture Park, Marol MIDC, Near Hotel Tunga Paradise, Andheri (E) Mumbai - 400 093.
Registered & Correspondence Office:
Central Office:
Mr. Chandrakant Salunkhe - Founder President
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The Forum organises activities for the development of existing business, finding new markets, acquiring new
technology, finance and equity funding, international collaborations and resolving problems and issues.
The Forum provides information and guidance on the process of setting up an enterprise, the procedures and
documentation for export activities, making a business plan, market study, feasibility reports, project reports,
approaching a bank or a financial institution for obtaining term loans and working capital, development of skills
pertaining to manufacturing, quality, marketing and human relations, effective communication, export promotion,
foreign exchange rules & regulations, international payment settlements, risk management and other related topics.
The Forum provides a unique opportunity for networking with top CEOs of Corporate and Banks, Government
Officials, Technocrats, Industrialists and equity providers. This interaction will be immensely beneficial to the young
entrepreneurs in order to understand and learn effective management from experts.
Showcasing the business opportunities available in India and abroad
Interaction with Purchase, Marketing and Export Senior Managers and Executives.
To educate and train young entrepreneurs to compete in markets
Updating entrepreneurs with the latest trends in their business activities
Guidance and assistance on financial management
Assistance for joint ventures, collaborations, contract manufacturing and technology transfer
Knowledge transmission programs
Arranging group marketing and brand promotion
The Forum will provide guidance and assistance for business development as required by members.
Activities of the Forum
Forum is a private organisation and Registered u/s 25 of The Indian Companies Act, 1956)
Inaugural Issue, January 2011 41
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Friday, 18th June 2010 | Hotel InterContinental The Lalit, Mumbai
YOUNG ENTREPRENEURS’ SUMMITTheme
“Empowering for better growth - Synergy and Strategy”
Mr. Rajendra Darda Mr. A. Rameshkumar
Mr. M. Narendra
Mr. Ramu Deora Mr. M. K. Nag
Mr. Chandrakant Salunkhe Ms. Meera Sanyal
Ms. Sulajja Firodia-Motwani
- Hon’ble Minister for Industry, Maharashtra while inaugurating the Summit. (L to R) –
CEO & MD, Asia Pragati Capfin Pvt Ltd. and Chairman, Northern Region, SME Chamber of India, – Executive
Director, Bank of India, – Chairman, All India Shippers' Council, – Chief General Manager (SME
Business Unit), State Bank of India, – President, SME Chamber of India, – Country
Executive India, The Royal Bank of Scotland N.V and – Managing Director, Kinetic Motor Co. Ltd.
Mr. Rajendra Darda who was the Chief Guest at the Summit in
his inaugural address said that Government of Maharashtra is
fully aware of the issues and problems of the MSME Sector and
is committed for the development of MSME Sector. Towards this
all out efforts are being initiated by his Department. A
separate Secretary (SME) has already been appointed, in
addition to Secretary (Industries) to take care of the
requirements of MSME Sector through a “
which will deliver a hassle free service. He assured
that from his Ministry all support will be available for SMEs and
young entrepreneurs who want to start a venture. He also
mentioned that His Ministry is going to revive the DICs which
have been non-functional for the last 10 years.
He assured that Government will take all necessary measures to develop the MSMEs especially Young Entrepreneurs, who
wants to set up an enterprise and industrial growth in Maharashtra by providing all benefits available from the Government.
He also assured that he will take up with the Chief Minister the dream of making Maharashtra the number one industrialised
State in India as well as an attractive place for investment.
Single Window
Clearance”
Mr. Rajendra Darda - Hon’ble Minister for Industry,
Maharashtra delivering the inaugural address
Delegates at the Summit
ADDRESS BY CHIEF GUEST
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ADDRESS BY DIGNITARIES
She emphasised the need for Vocational Training, Streamline
education syllabus to focus on English language and computer skills
and Liberalization of Higher education. The next stage of enabling
reforms is now needed to provide an impetus to young Indian
entrepreneurs, she said.
She said that urgent reforms are required in the field of Education,
Economic Infrastructureand Environment protection.
The reforms of 1992 paved the way for unleashing the innovation
of Indian entrepreneurs and consequently India's growth. She
advised the young entrepreneurs to pursue their goals even in the
face of difficulties, and convert adversities into opportunities.
She also emphasised the need for promoting Self-Help Groups to
provide means of livelihood for rural women, Public-private
partnership, to reduce Man/Animal conflict through positive
efforts at rehabilitating human settlements, Focus on renewable
sources of energy, especially, solar, hybrid and biomass and focus
on pollution control norms and thereby ensure a green future.
Ms. Motwani was very optimistic of the future of the young
enterprises in the years to come since India is much sought after
country throughout the world for business and investment as it has
been established that it has great potential in spheres of business.
Hence it is the right time for any person who has entrepreneurship
desires and qualities to start ventures, since we have stable
economy and political leadership and growing market.
The essential need for anybody who wants to start an enterprise is
to have a viable project so that the execution of and expansion will
be a reality. Since technology is changing day-by-day and great
innovations are taking place everywhere it is very necessary to
have a thorough study of what one wants to do and how? Since
there have been growth during the previous 10 years, there are
many avenues available for the young generation which should be
exploited and taken advantage of. One should have through
knowledge of what is happening in the National and International
level for adoption, since in the coming 10-15 years there will be
tremendous growth.
She concluded that to bring about desired developments and
opportunities it is necessary to have growth in infrastructure, health
and education especially in rural areas. These are huge areas for
growth of entrepreneurs. Therefore, it is very essential, that the
concerned authorities should come forward to guide, encourage
and provide assistance to the young entrepreneurs who have
potential and willing to do something so that the status of the State
as No. 1 Industrialised State can be retained.
Ms. Meera Sanyal - Country Executive India,
The Royal Bank of Scotland N.V
Ms. Sulajja Firodia-MotwaniManaging Director, Kinetic Motor Company Ltd.
Bank of India has been successfully operating for the last 104
years and is one of the major banks which are committed for the
growth of MSMEs. Explained about various schemes available for
the MSMEs especially for the young entrepreneurs, mentioned that
there should a proper project planning for any entrepreneur as to
what he wants to do. He explained about the schemes available
under the CGTMSE from his Bank. The bank has set up around 100
clusters for SME Development.
He emphasized about the value system and qualities with which
any entrepreneurs can achieve success. Risk capital management is
another important area which should be taken care of. Another
important point he mentioned is about how to overcome various
challenges to be successful. He also emphasized the importance
for good governance, business ethics and transparency for an
enterprise which is the need of the hour to have a very good
impression amongst all concerned especially for global interactions
and business alliances. One has to be transparent, quality
conscious, customer centered and technology savvy.
He concluded by assuring all guidance, support and help for
entrepreneurs who want to start a really viable project having a
good techno-economic feasibility study.
Mr. M. Narendra - Executive Director, Bank of India
Inaugural Issue, January 2011 43 CO NNECT
Mr. Nag while addressing the inaugural session of the Summit said
that State Bank of India has many schemes for the Young
Entrepreneurs provided they have proper idea as to what they
want to do. The project should be very clear and indicate the future
plans so that the Bank can easily evaluate properly and the
viability and risks involved can be ascertained. Lending to MSMEs
from SBI has increased tremendously. The Bank has also devised
various means to mitigate delays.
Bank has to take into consideration all quality of the entrepreneur
as to what he wants to do, how to do and when to do. The issues
involved for financing is first of all a proper concept is required.
Hence the proposal of the project should be viable as per norms of
the bank to satisfy the internal assessment. State Bank of India is
fully committed to develop and encourage the Entrepreneurs, he
said. Another requirement for the entrepreneurs is that they should
be able to raise capital and proper interaction with the bankers to
convince their strength, weakness so that the bank can render
proper guidance.
He concluded by saying the SBI is always there to help a genuine
entrepreneurs who actually wants to set his enterprise.
Mr. Bhagat explained the India's story. India's ascendancy to
emerge as an economic and political global power of 21st century
has come despite India not opting to be a colony of any super
power; it took aid and created bilateral relations on its own terms.
Resistance from the developed world to deprive it of technological
advancement; withstood attempts of economic colonization. Mr.
Bhagat said that India's economic model is unique and commended
upon the vital role played by the MSME Sector toward contribution
to Nation development.
While explaining about emerging demography and Investment
outlays, with facts and figures he projected the potential growth
India would have from 2015 till 2030 with the help of vast
recourses and educated young population as also the expected
increase in the overall infrastructure investment and developments.
According to him the areas that emerge from demographic patters,
social & economic investments and global issues will be Urban
Housing (Affordable Housing), Higher & Vocational Education,
Entertainment & Leisure, Healthcare, Food Processing & Agriculture
related, Economic prosperity symbols i.e Automobiles, High
Fashion, etc. Environment Sustainability and Security. The essential
requirements of Self Enterprise are Planning, Capital, Best
Practices, Technology, Acting Collective, Mentoring, Knowledge /
Learnings – Adopt, Adapt & Abort, said Mr. Bhagat.
Mr. Bhagat said, what an entrepreneur wants is that the
Government needs to create an SME focused Banking Institution
like SIDBI or NABARD. For addressing the capital needs the various
ways are Securitization of Cash Flow, Explore Hybrid Financial
Instruments, Financial Management performance, Venture Capital
/ Private Equity and act collectively.
Mr. Bhagat advised the participants to contact SME Chamber of
India for Consulting, Advocacy and EuroIndia Centre for Learnings
Technology Partnership, Joint ventures, Access to European Market.
Mr. Girish Bhagat – Secretary (India), Euro India Centre
and Director, IndiaNivesh Limited.
Mr. M. K. Nag - Chief General Manager (SME Business Unit),
State Bank of India
Mr. Jagat ShahFounder & CEO, Global Network Institute
and Mentor, Cluster Pulse
Mr. Srikant BadveChairman and MD,
Badve Group of Industries
Mr. Sai S. MadhavanDirector,
Nishtha Technologies India Pvt. Ltd
Mr. Rajendra Darda - Hon’ble Minister for Industry, Maharashtra felicitating the following successful entrepreneurs during the Summit
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He explained the importance of development of human
resources for increased productivity for Strategic Business
Management for Sustained Growth. It is therefore
necessary that the organisation vision should be
communicated and understood clearly to make the journey
of each and every employee in an organisation delightful.
As per him it is very necessary to motivate the employees to
cultivate a belongingness to achieve maximum output as
well as help to put their whole hearted talents and stay for
longer periods, which will be beneficial for the overall well
being of an organisation.He also emphasised the need for
thorough reference checks, instead of completely
depending on resume while hiring employees as most of the
time. SMEs make mistakes in this respect. Also proper care
is needed while hiring relations and people referred by
friends to avoid family and friendly relations in the
workplace which is not healthy due to many reasons. If
possible, one should try to hire a jack of all instead of
specialist for a particular job. However, young companies
need specialist for specific tasks.
ADDRESS BY EMINENT SPEAKERS
“SustainableGrowth – Strategyfor YoungEntrepreneurs”
“Development ofHuman Resourcesfor increasedproductivity”
Mr. Srikant BadveChairman & MD
Badve Group of Industries
“Business Plansand Vision &Mission Statementsfor Better Growth”
Mr. Mahesh KrishnamurtiManaging Director,
Resources Global
Professionals (India)
Mr. Rao in his speech explained about the role played by
LIC in every walk of life, which has insured more than 206
million lives in the last 5 years.
Also explained about the various polices served in different
categories especially for the Young Entrepreneurs and
other entrepreneurs.
With an informative presentation he gave the facts and
figures of various polices for the information of the
participants.
Mr. Badve explained how a entrepreneur can translate his
ideas into realities by adopting the three essential
requirements that Confidence, Hard Work and Attitude. As
a Mechanical Engineer, from humble beginning without
business background, he made considerable achievements
and Badve group has manufacturing units located at
Aurangabad, Renjangaon, Chakan (Pune), Pantanagar
(Uttarakhand) and Chennai.
To be a successful entrepreneur, according to him, the
essential requirements are Providing Quality Technology so
as to be world class manufacturer in our field, Serving
Customers Efficiently and Effectively, Developing Market
needed Products, Providing Employees with a Safe and
Pleasant work environment.
According to him, client relationship is every essential. It is
necessary to continually foster world-class infrastructures as
well as to quickly create principle-centered sources to meet
customer's needs. To meet the challenge it is necessary to
assertively network economically sound methods of
empowerment so that we may continually negotiate
performance-based infrastructures.
Respect, integrity, communication, and excellence are other
important ingredients for success in business. He explained
in detail the importance of People (the team), opportunity,
context and risk and reward, quantification, direction,
motivation (inspiration), Challenge, clarity, action and
guidance.
The questions to be analysed quite often while making
business ideas are What do you know? How will you
respond to adversity? How well are you known? Who do
you know? Are you realistic? How committed are you?
What's driving you?
Mr. Ashish AroraManaging Director,
HR Anexi Pvt. Ltd.
“Role of LIC”
Mr. N. Prabhakar RaoRegional Manager,
LIC of India
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Mr. Sai Madhavan, in his address explained various aspects
of BPO Services such as – Medical Transcription, Legal
Transcription, Business Transcription, Tax accounting,
Planning for IT Strategy & implementation, Project
Management / Six Sigma, Accounting / Financial,
Professional / Corporate Training in the areas of Project
Management, Six Sigma, ITIL, Values Based Leadership,
Individual Development / Team Building workshops /
events.
According to him what one should expect are not a forum
for explaining latest IT products but review of Trends in
Technology / Market forces, Understanding IT and it's
relevance, focusing on the need for adaptation,
Strategizing for adaptation / critical factors and steps in
leveraging IT and the guiding principles in leveraging.
He also emphasised the need for increase in speed of
execution i.e. travel, processing, productivity, supply chain
management and increase in accuracy of scientific, medical,
bio-medical and aerospace technology.
Another important aspects are increase in quality metrics
and clarify of products /services in market, customer
acceptance, mobile/telecom industry, ISO 9001, increase in
coverage of mobility across geographical locations / POS
recording, multi-function products, by range of offerings,
increase in depth of research resulting in better procedures
like adapting to instrument precision, making advancements
in genetic engineering, making advancements in agro or
food processing.
According to him, to meet the increasing competitiveness,
one should adopt superior technology, enhance user
experience, using marketability tool, JIT, Lean
Manufacturing (increased efficiency and value).
IT Breaking the Myth because IT is complex and expensive
vs. IT for all but adaptable per relevance to business
function. It is not a rocket science. It is existing product or
principle but increased findings / refinement for varied
applications – innovation vs. invention.
He also made valuable observation on IT like technology, IT
application, adoption, Philosophy for Leveraging IT,
Profitability Vs. Growth.
Guiding Factors for Leveraging IT are strong business
strategy and philosophy, areas of business functions for
leveraging: biggest bang for the buck, Careful selection of
IT components for leveraging / degree of leveraging,
Timely introduction / integration of technology, Training
and adaptation, Seamless rollout of initiatives through
appropriate level of project management plans and
control, Guiding Principles for Leveraging vs. using your own
infrastructure and websites for two way communication with
the customer.
He concluded by saying that IT in Business is for doing the
right thing, for the right reasons, on the right elements, with
the right people, at the right time, with the right technology,
at the right cost, for the right product or service, for the right
users or uses.
Mr. Sai S. MadhavanDirector,
Nishtha Technologies
India Pvt. Ltd
“Leveraging ITfor businessgrowth”
Project is a temporary endeavour undertaken to create a
unique product, service or result. Project Management
involves application of knowledge, scales, tools and
techniques and project activities to meet project
requirements.
The important aspects involved in executing a project are
Project Integration Management, Project Scope
Management, Project Time Management, Project Cost
Management, Project Scope Management, Project Quality
Management, Project Communication Management, Project
Risk Management and Procurement Management.
He also explained in detail about Project Charter, Project
Success Criteria, Stakeholder Identification, Responsibility
Assignment, Matrix, Communication Plan, Work
Breakdown, Structure & Risk Management.
It is also very essential to understand the Power Play, Politics,
Personal Nuisances and Institutional History. Decision
making process is also crucial which includes advocacy and
Inquiry.
“Strategies andTechniques forExecuting &Managing
New Projects”
Mr. Naushad PanjwaniExecutive Director,
Corporate Projects,
Knight Frank India
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“Good Governance andEthical BusinessPractices for the successof an enterprise ”
“How to growprofitably leveragingoutsourcing?”
According to Mr. Nair, governance is about directing and
controlling a Company through a set of Systems, Principles and
Processes. The primary purpose of good governance is maximizing
stakeholder value, Customer, Employees, Investors, Vendors &
Society at large.
The need for good governance is creating long-term trust between
companies and investors, promote corporate fairness,
transparency and accountability, risk management and monitoring,
rationalizing the decision making procedures, efficiency in
operations and other business processes.
Good governance starts from a Frictionless journey from
Ownership to Professional Management of Enterprise, Entity Level
Measures, Operational Measures. Good Governance always
starts and ends at the Top, said Mr. Nair.
The equity level measures of good governance can be achieved by
having technically qualified leadership, strong and robust advisory
board, code of ethics and conduct documented and implemented,
ownership separated from Management, institutionalizing risk
management and audit procedures and control environment.
Operational measures involved in Good Governance are
company-wide policies and procedures documented, delegation
of Powers, implementation of internal controls across processes,
employee participation and strong systems and controls.
Mr. Nair also spoke about the evolution of Corporate Governance
and indicators of bad governance. The indicators of bad
governance are spate of high profile corporate frauds and
collapses in the U.S and Europe; executive compensation grossly
disproportionate to corporate results; misuse of corporate funds;
trading on insider information, particularly by managers exercising
stock options; misrepresentation of true earnings and financial
conditions of companies; and obstruction of justice by concealing
activities or destroying evidence. He concluded that sound business
ethics will go a long way in the progress of any organisation.
He said that the world is moving from physical capital and
ownership to networks and intellectual capital. Ownership of all
assets and resources is not needed for rapid and profitable
growth. Economies of speed are getting more important than
economies of scale. There is absence of expertise. To overcome this
we should use our own expertise since better expertise is available
elsewhere. Also it is very necessary to attract good management
talent and the same should be accessed on time-share basis, which
is useful for both large and small companies for different reasons.
For large companies for reasons of cost reduction, flexibility,
avoiding internal bureaucracy on capex, trade union problems etc.
and for small companies for speed, expertise, cost reduction, capex
etc.
“Responsibility ofCorporate to nurtureyoung entrepreneurs”
Mr. Deodutta KuranePresident, Human Capital
Management, YES Bank Ltd.
“Venture Capital andPrivate Equity Fundingfor Start-upand Expansion”
“WomenEntrepreneurs –A new force toreckon with”
Mr. Vinod NairPartner, Grant Thornton
Mr. Jitu Mehta
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Management Consultant in value
creation, Founder Chairman at
Valueveda and EX- Executive
Director at Hindustan Unilever Ltd
Delegates at the Summit
Ms. Devita SarafCEO, VU Technologies
and Zenith Computer Ltd.
Mr. Amit GroverFounder, Nurture Talent Academy
and Director, Mumbai Angels
OTHER EMINENT SPEAKERS
SME
SME TRAINING INSTITUTE OF INDIA
MAJOR OBJECTIVES & ACTIVITIES
SME Training Institute of India” Mr. Dinesh Rai
Mr. K. R. Sharma
Mr. T. R. Bajalia Mr. Chandrakant Salunkhe
Mr. A. Rameshkumar Mr. M. G. Sanghvi,
Mr.Anthony J. C. De Sa IAS,
was launched at the hands of - Secretary, Ministry of MSME,
Government of India on 21st February, 2009. - Director, MSME Development Institute of India,
Mumbai, - Executive Director, IDBI Bank, - President, SME Chamber of
India and - Chairman, SME Chamber of India (Northern Region), New Delhi.
Executive Director, Bank of Maharashtra Director, UNIDO Centre
Reg & Correspondence Office:
Central Office
101, Murlidhar Baldev Estate, Nr Vikas Estate, Off Aarey Road, Goregaon (E), Mumbai:- 63.
3 & 4, Upper Gr. Flr., Samruddhi Venture Park, Marol MIDC, Nr Hotel Tunga Paradise, Andheri (E), Mumbai:- 93.
Tel: +91 - 22 - 6677 0218 / 6667 4444 / 6150 9800 | Fax: +91 - 22 - 2874 354
Email: [email protected] | Website: www.smeinstituteofindia.com
For Assistance, Support & Details Contact: Mr. S. Maheshkumar - General Secretary
SEMINAR | CONFERENCE | TRAINING | EDUCATION | WORKSHOP | INTERACTIONS
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To impart knowledge and skills
SME & Entrepreneurship Development
Marketing & Promotion
Industrial Development
Export-Import Documentation
Business Process Management
Business plans and strategy
Self business evaluation knowledge
Finance and Investment
Technology Upgradation and IndustrialAutomation
Branding and Promotion Strategy
HR Management
Financial Management
Strategy for Identifying buyers and Importers
How to avail incentives and financial assistance?
Commercial CooperationAgreements
Joint Venture & Technology Transfer
Private Equity / Venture Capital Funds
Contract manufacturing tie-ups
Setting up new Industry &, Business
Quality Management
Production Management
Preparation of Business Plans and Project Reports
Domestic Market Development
Collateral Free Loans and Other Bank Finance
QualityAssurance and Productivity
Importance and benefits of Credit Ratings
Letter of Credit and Payment Settlements
Foreign Exchange Management
Logistic and Supply Chain Management
Lean Manufacturing Competitiveness Program
Procedures for Government and PSU Tenders
Importance of Intellectual Property Rights for SMEs
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This Conference was organised to facilitate the SMEs to identify new business opportunities, joint ventures and collaboration
arrangements, contract manufacturing tie-ups, transfer of technologies both imports and exports and to understand the
procedures, formalities, the legal aspects, methods of identification of business partners, funding avenues for new projects,
obtaining government & regulatory clearances and the incentives available from Government Departments and Banks.
The delegates had a lively interaction with the eminent speakers as well as networked among themselves. Lot of interest was
created to avail the various services available from the Chamber and other organisations towards technology transfer and
joint venture arrangements.
Conference on
“Technology Transfer & Joint Ventures
Opportunities for SMEs”Tuesday, 04th May 2010 | SME Chamber of India Conference Hall, Mumbai
Delegates at the Conference
CO NNECT Inaugural Issue, January 201148
Ms. Kalata appreciated the capabilities of Indian SMEs to
produce internationally acceptable quality products. Due
to her exposure to Indian industry especially with the SMEs,
she said that there are many opportunities for technology
transfer and business alliances to and from India.
There are good investment opportunities in Poland for the
Indian SMEs. She elaborated on how to obtain licenses,
opening representative offices as well as investment
formalities and taxation details. The sectors wherein
technology transfer opportunities available from India to
Poland are - Chemicals, Metals, Water Treatment and
Environment.
She explained in detail about the guidelines on
and about the mindset of the polish
businessmen about the Indian markets and enterprises
which is very positive and promising.
“Doing
Business with Poland”
Mr. Salunkhe emphasised that the Indian SMEs should
produce products of international quality in order to survive
and grow the competitive world market.
Many of the SMEs are using obsolete machineries,
technologies and processes which hamper their ability to
produce quality products. They should look for entering into
joint venture arrangements with suitable partners as well as
import latest technologies to meet their objectives.
There are also SMEs with state of the art technology which
they can think of exporting to other countries especially to
the developing countries.
He reiterated the need to attend and participate in
National and International Exhibitions, Conferences and
B2B Meets in order to identify suitable technologies and
partners.
“Technology Transfer,Joint venture andAlliance Opportunitiesbetween Indian andPolish Companies”
Ms. Anna KalataFormer Minister for Industry &
International Trade, Poland
“Latest Technologyfor better growthof Companies”
ADDRESS BY DIGNITARIESMr. Chandrakant SalunkhePresident,
SME Chamber of India
Mr. Choi mentioned that Korea has made good progress in IT
hardware sector while India has emerged as the leader in software
technology. Therefore, there exists tremendous opportunities for
joint ventures and collaborations in IT and IT enabled services.
Underlining the common cultural and social similarities prevailing in
India and Korea, the SMEs in both the countries should think of
increased business collaborations for mutual benefit.
Apart from manufacturing industries, the Indian SMEs engaged in
services will also find good opportunities in Korea.
Dr. Singh explained the importance of Indian steel industry and
ascertained that as the economy grows there would be huge
demand for steel. India has increased steel production
considerably and achieved remarkable improvements in design
and engineering. He emphasised the need for absorption of new
technologies to produce steel of high quality with competitive price.
This requires the Indian SMEs in steel industries to go in for joint
ventures. The major problem in the industry is the non-availability
of power at reasonable cost. Government should also take
measure to provide all necessary support for joint venture in steel
sector with minimum restrictions.
“Joint Ventures successstories of Korean automajors in India”
Mr. Don-Seok ChoiDirector General,
Korea Trade- Investment Promotion
Agency (KOTRA), Mumbai
“InternationalcooperationthroughJoint Ventures”
Dr. Sudarshan SinghChairman, ANT Steel Engineers
(Asia) Pvt. Ltd.
Mr. Bhagat informed that around 2000 SMEs are associated with
the Euro India Centre. There is an increased awareness between the
SMEs of India and Europe about the necessity to cooperate
amongst themselves to increase trade and investment.
Since the European quality standards are stringent, the Indian SMEs
should improve their capabilities to produce internationally
acceptable quality products as per customer needs. Therefore,
there is an urgent need to upgrade the technology in manufacturing
industries which can be achieved through technology transfer and
collaborations between Indian and European SMEs. There is a
general feeling that non-availability of capital is a major
impediment of Indian SMEs. This is not true because there are
many overseas investors and Indian venture capitalists ready to
invest in upcoming companies in high growth sectors.
The cluster approach is a good form of cooperative venture around
the world. In Europe there are many clusters which are progressing
very well. Even in India some clusters like knitted garments in
Tirupur, woolen garments in Punjab are successful cluster
operations. .
India is similar to Europe in its multi regional, multi linguistic and
multi ethnic characteristics. Therefore, many of the successful
business models in Europe can replicated in India. For example, ash
is used to make readymade bricks in the construction industry which
will find major applications in Indian low cost housing industry.
Although technology transfer and joint ventures are attractive
options there are many statutory and legal issues need to be
understood and addressed. This will avoid future litigations and
complications in doing business. While selecting the size of the
business partner, the reputation and integrity of the partner should
be given due consideration that its size to reap long and fruitful
association.
“Collaboration and AllianceOpportunities betweenIndian and EuropeanCompanies”
Mr. Girish BhagatSecretary (India),
Euro India Centre and
Director, IndiaNivesh Limited.
While entering any sort of agreement especially in joint venture
with overseas partners, the SMEs have to be very cautions in
understanding the legal implications of the agreements. Mere
MoUs will not be enforceable in the court of law in many occasions.
For a better understanding and to avoid future disputes, the
agreement have to be carefully worded, understood by both the
parties and should be enforceable if necessary in a designated
court of law. The Joint Venture Agreements should clearly specify
the partners duties and liabilities, term of the agreement, legal
jurisdiction, market related issues, patents and intellectual property
rights and arbitration.
“Legal Aspects inInternational Alliances”
Ms. Poorvi ChothaniLawQuest
CO NNECTInaugural Issue, January 2011 49
Mr. Jagat Shah of Cluster Pulse projected the various technologies
available from Canada for adoption by Indian SMEs.
Mr. Jagat said that basic questions like Why, What, Where, With
Whom, When and How are to be factored while deciding a
collaboration or joint venture or technology transfer or partnership
arrangement.
There are four routes for growth of an organisation like organic
growth, strategic alliances, joint ventures and merger &
acquisitions.
It is to be understood that the joint venture agreements are entered
into for a specific task and for a specific period. The best form of
joint venture is to have 50:50 stake. There are overseas companies
who enter into different joint venture arrangements with Indian
companies to cater to Indian markets with 50:50 stake and 70:30
stake to cater to the export markets.
In some joint ventures, the technology or know how or intellectual
property are utilised as equity participation.
He also touched upon the scope of the joint venture which will
include duties and responsibilities, the rights of partners, the legal
agreements, profit sharing arrangements, organisational structure,
non-competitive agreements, intellectual property rights, the
procedures for exit etc.
Mr. Nishibashi mentioned that India and Japan are good business
partners and there many successful joint ventures already existing,
for example - Maruti Suzuki and Hero Honda. Other prominent
Japanese companies in India are Mitsubishi Heavy Industries,
Bridge Stone, Toyoto, Toshiba and Nissan. He has highlighted about
the increasing interest of Japanese Government and companies to
partner with their Indian counterparts.
Delhi Mumbai Industrial Corridor (DMIC) is one such collaborative
initiative between the Government of India and Government of
Japan to develop a dedicated industrial corridor with world class
infrastructure. This will result in setting up of many industries
between Delhi and Mumbai as well as create great employment
opportunities. The Indian SMEs will have potential for growth by
associating with the DMIC Project.
JETRO will identify the SMEs in Japan and India to engage in DMIC
and provide necessary guidance and assistance for joint ventures,
technology transfers and business alliances.
The Government of Japan and India are undertaking small
community projects which will build eco friendly cities in Gujarat,
Haryana and Maharashtra. The feasibility studies have already
been started.These cities will create employment and better
environment for the people.
“Advantages ofadoption oftechnologies forgreater growth”
Mr. Tokio NishibashiSenior Advisor,
Japan External Trade Organisation
(JETRO), Mumbai “How to Identify JointVenture and InternationalAlliance Partners? ” and“Technological InternationalAlliances Challengesand Opportunities”
Mr. Jagat ShahFounder and Mentor, Clusterpulse
He explained in detail about the products and services of the SIDBI
aimed at the SMEs.
Technology Upgradation Fund Scheme for Textile Industries (TUFS)
has been launched by SIDBI with a view to sustaining as well as
improving the competitiveness and overall long term viability of the
textile sector. The scheme intends to provide timely and adequate
capital at internationally comparable rate of interest in order to
upgrade the textile industry's technology level. The special
features of the Scheme is that the SME borrowers can avail either
interest reimbursement on the interest actually charged in respect
of rupee loan or 12% Credit Linked Capital Subsidy on eligible
investment made for modernisation or 20% Credit linked Capital
subsidy (CLCS @20%) on machinery cost.
Through their CGTMSE scheme, they provide collateral free loans
to Micro and Small Entrepreneurs through their members banks
upto Rs. 1 crore.
They also have another division called SME Rating Agency of India
(SMERA) which provides ratings to the SMEs which will be useful to
them in obtaining loans from the banks at concessional rate of
interest. Moreover, these ratings will be useful in enhancing the
credibility of the enterprises with their customers, suppliers,
importers etc.
“Funding for Technology Upgradation Projects by SMEs”
Mr. Shailesh Dungaria - AGM, SIDBI
CO NNECT Inaugural Issue, January 201150
“Strategies andTechniques ofManaging andExecuting Projects”
Mr. Ashok SangolliProject Management
Consultant
Mr. Ashish AroraManaging Director,
HR Anexi Pvt. Ltd.
“Adoption of HRManagement forBetter Growthof SMEs”
Prof Rane emphasised the need for saving the energy in all
possible ways in every walk of life and utilising the same in
other areas for productive purposes. He cited examples for
saving energy from the day-to-day utilization of various
equipments like Air conditioners, Fridge etc. He explained in
detail with technical data about the savings in energy as
well as utilization of waste heat into productive purpose.
Many of the innovative technologies developed by the
students in IIT-Bombay are being patented. Some
innovative systems developed by IIT-Bombay can be used
for domestic purpose to produce hot water as well as to
reduce the power consumption of the AC System. This will
be a boon to the consumers as it saves a lot of money in their
daily utilities and add more convenience. These can be
commercially exploited by the Corporate and SMEs.
“EnergyConservationTechnologiesfor SMEs”
Prof. M. V. RaneMechanical Engineering
Department, IIT, Mumbai
Mr. Shah mentioned that many SMEs do not appreciate the
efforts required to manage the finance effectively and
arrive at the financial requirements in a more scientific
manner. Moreover, in majority of the cases the owners have
to concentrate on many operational matters thus by leaving
him with little time to concentrate on financial matters.
It is therefore advisable to outsource CFO Services to a
specialist who can identify the financial needs of the
enterprise, advise and guide the owner and the operating
staff in raising funds, utilising them effectively and train the
staff wherever necessary.
“Arranging andManaging theFinance for bettergrowth andexpansion”
Mr. Chaitanya ShahCEO, CKPP Associates
While delivering his lecture on “Adoption of HR
Management for Better Growth of SMEs”, Mr. Arora
emphasised that while the employers want to maximise the
contribution from the employees, the employees wish to
maximise their satisfaction in an organisation through both
monetary and other aspects. The success of an organisation
therefore depends on the leadership skills of the CEO or the
owner through effective engagement with their employees.
Building trust through proper communication is the key to
success. Identification of the problem areas, take corrective
action, understanding the expectation of the employees
and reward the efficiency and excellence should be an
ongoing process. While the owner is passionate about his
venture, it is very important to motivate all down the line to
understand the goal of the organisation and ensure their
involvement. It is worth noting that the attrition rate is high
due to unsatisfactory working conditions and lack of
motivation and appreciation more than the monetary
considerations.
He emphasized that maintaining the human relations of the
highest order is very important, as 95% of the Joint
Ventures fail or get into problem due to HR related issues.
The major problem in a project management is the cost and
time overrun said Mr. Sangolli during his speech. Normally
the project activity pertains to new start up, expansion,
modernisation, backward or forward integration, vertical
or horizontal integration etc.
To avoid these overruns and for the successful
implementation of the projects, care should be taken in the
areas of planning, feasibility report, project organisation,
staffing, financial management, budgets and control,
detailed costing of land, building, equipments and utilities,
erection and commissioning and consultancy charges from
the inception.
“Plan the work and work the plan” are the key to the
successful implementation of the project. Preparing
contingency plans as well as proper closure of the project
are the two points which are normally ignored by the
project personnel but the same need to be accorded
priority.
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“Experiences ofJoint VentureAlliances and itsAdvantages”
Mr. Sharad SanghiDirector,
Texperts India Pvt. Ltd
“Role ofExim Bankfor promotionof TechnologyExports”
Mr. Dipak Kujur
Chief Manager,
Exim Bank of India
Mr. Shanghi explained about successful setting up a joint
venture arrangement with a local partner in Bangladesh to
market products related to textile industry.
“Texperts” were distributing LYCRA, an ingredient useful in
textiles manufacturing, which is manufactured by their
collaborators “Invista”. Invista had a good product but did
not have the capability to market them in Asian countries.
By partnering with Texperts both the joint venture partners
could leverage their respective strengths for mutual benefit.
By maintaining quality and timely supply they were able to
create a good customer base in Bangladesh as tailoring is a
wide spread cottage industry in Dhaka.
This has also helped Texperts to supply their other products
like cotton and similar items used in textiles by the same
customers. This has resulted in increased volume of sales and
profit.
Exim Bank is a specialised bank facilitating SMEs in their
joint venture collaborations, imports of capital equipments
and raw materials and export credits. The bank provides
useful information to exporters and importers from SME
Sector about the opportunities available in other countries.
For those entrepreneurs who undertake project contracts
abroad the Exim Bank offers specalised packages of
credit. The Bank provides necessary assistance and
guidance to encourage the Indian companies to export their
technologies. This includes information about the specific
country, identification of technology importers, the
procedures and documentation and ensuring payments.
Due to their worldwide contacts, Exim Bank can assist Indian
SMEs to identify the right joint venture partners and also
extend credit for imports. Buyers credit and line of credit in
developing countries are some of the popular products of
Exim Bank which are useful for the Indian small and medium
entrepreneurs.
Delegates at the Conference
Macro Events & Exhibitions Pvt. Ltd.
EXH IB I T IONS | CONFERENCE | BRAND ING | PROMOT ION | E VENT MANAGEMENT
Registered & Correspondence Office Address
101, Murlidhar Baldev Estate, Near Vikas Estate, Off Aarey Road, Goregaon (E), Mumbai - 400 063.
Tel: +91 - 22 - 2871 1396 / 6677 0218 | Fax: +91 - 22 -2874 3543 | Email: [email protected]
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Conceptualization and Planning of various events and activities.
Marketing Campaign and Promotion (Direct, Tele and Websites)
Branding and Advertising Promotion
Creation, Implementation and Execution
Designing and Printing
Designing Interactive Event Website
Designing of Booths (Stalls) and Display Materials
Registration and database management
Post event follow up and coordination with prospective clients
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Media Planning and Branding - Print and Electronic
Selection of venue and hotel booking
Organise cultural and entertainment programs
Experienced and skilled manpower to execute events
Management of Guests, Delegates, Exhibitors and Participants
Coordination with Customs, Freight Forwarders and other Govt. Agencies
Networking and business promotion activities
Well equipped and experienced security personnels
Effective Communication
Research and Content Information
Pre and post event information
Coordination with suppliers and service providers
Logistics Support
Trade Promotional Activities
International Level Conferences and Summits
Exhibitions and Trade Fairs
Business Promotion events
B2B and B2C Meets
Advertisements and Branding
Knowledge oriented events
Educational, Cultural & Sports Events
Delegations and Trade Missions
Mega Events and Road Shows
Entertainment Activities
Study Tours and Educational Programs
FOCUSED ACTIVITIES AND EVENTSOUR SERVICES
SUPPORT
www.ma c r o e ve n t s . i n
Hamriyah Free Zone (HFZ)
Dr. Rashid Al Leem,
is one of the fastest growing and dynamic free zones in the world, housing over 4,900 companies
from 135 countries. Established in 1995 by an Emiri decree it is the first and the only free zone among 5,000 free zones
worldwide certified SA8000 for Corporate Social Accountability and OHSAS 18001 for Occupational Health and Safety.
Director General of Sharjah Department of Seaports and Customs and Hamriyah Free Zone Authority,
widely acknowledged as a visionary and thought leader in business, socio-economic, academic and cultural endeavors, is the
driving force in transforming HFZ into a strategic commerce hub and empowering thousands of businesses in the region
Q: What makes Hamriyah Free Zone different when compared to other free zones in the region?
Q: Can you shed some more light on your SME packages?
Q: How can companies and entrepreneurs interested in setting up a base
in HFZ obtain more information?
www.hamriyahfreezone.ae
HFZ is the only free zone with a special focus on SME sector. Apart from tax free environment, full ownership of business and
state of the art facilities and infrastructure we offer SMEs convenient business solutions that include discounted lease rents,
simplified procedures and minimum formalities. To support this important sector we've also negotiated agreements with
several local and international banks to provide corporate and individual credit facilities to assist SMEs in fast-tracking their
business set-up.
First, it's the Hamriyah SME Zone, a specially designated area in the Free Zone supported by a remarkable deep and inner
harbor facility. The 7 Magnificent Zones of Hamriyah SME Zone include: Steel City, Timber Land,
Oil&Gas Zone, Perfume World, Maritime City, Petrochemical Zone and Construction
World. Companies here can benefit from discounted lease rents with annual rate of
approximately USD 8.22 per square meter only, fixed for 5 years with rent holidays
of 2 months annually.
Another important angle of our SME strategy is Hamriyah E-office: Executive,
Economical, Efficient, Electronic. This is unique and specially designed
initiative with simple legal framework and documentation allows investors
to set up the office in only 24 hours following four easy steps and for as low as
$6,850.
Hamriyah MB Zone is designed to specifically cater to the needs of micro
business owners. Whether it's service or manufacturing or trading,
Hamriyah MB Zone offers convenient and practical business solutions for
micro business owners.
Our team frequently visits India and we'll be glad to meet with those
interested in exploring business opportunities at HFZ and answer all
their questions.
Alternatively you may contact us directly at
Email:
visit our website
Dr. Rashid Al LeemView of Hamriyah Port
INTERVIEWAbout Hamriyah Free Zone (HFZ)
An Exclusive Interview with Dr. Rashid Al Leem
CO NNECTInaugural Issue, January 2011 55
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VENTURE CAPITAL & PRIVATE EQUITY FUNDING
OPPORTUNITY FOR SMEs18th February 2010 | SME Chamber of India Conference Hall, Mumbai
Mr. Abhyankar was the Chief Guest at the Conference
beside many eminent personalities from the Private Equity
and Venture Capital fund providers and managers. Mr.
Abhyanakr highlighted the success of venture capital and
private equity funding in US and other countries as well as
the necessity for making them available to the Indian SMEs
in a big way for their growth.
He explained in detail about the various business
opportunities available all over the world for
manufacturing and service enterprises in India, quoting
from his experience as Ambassador and member of many
high level Committees. He had quoted that the success of the
growth of US Economy is due to the development of the
Silicon Valley which revolutionized the information&
communication technology. The important fact is that the
drivers behind this revolution are the Indian IT professionals.
When India made progress in IT Sector, the US had to
support and automatically other countries also started
recognising India as an emerging economy. Now India has
gained respect and businessmen from all over the world are
keen to do business with India. He urged the SMEs to take
advantage of this favourable condition and take all
necessary steps to grow bigger.
ADDRESS BY CHIEF GUEST
Mr. Rajender Abhyankar - Former Secretary, Ministry of
External Affairs, Government of India addressing the
delegates
Mr. Rajender Abhyankar - Former Secretary, Ministry of
External Affairs addressing the questions of delegates
Mr. Chandrakant Salunkhe - President, SME Chamber of
India, addressing the questions of delegates
INTERACTION WITH DELEGATES
Delegates at the Conference
CO NNECT Inaugural Issue, January 201156
There are many types of funds for Venture, growth, buy-out and
special situations. The funds are also focused on the stages in which
the company is in like early stage, growth stage, late stage, pre-
IPO, PIPE. Again there are many sector focused funds and
available to suit to the different fund sizes. These funds are
available from both Indian and foreign investors.
The fund managers generally look for the revenues profits and cash
flows of the borrower. The market segment, the size of the
company, the growth potential, market share and the leadership
position of the company are given due weightage.
These funds are available for medium and long term requirements.
Depending upon the strength of the business plan the fund
managers decide the quantum of investment and when to invest.Companies with professional management, transparency And
good governance get a good chance to obtain funds. The fund
managers also discuss in detail about the exit options as well as the
number of years required to exit.
As the investors are choosy about where to invest it is also necessary
for the companies to select the correct investors. The points need to
be considered are :Fund life and the balance of life, the current
portfolio regarding the number of investments and the sectors
invested, the experience of the team members, who will be
nominated on the board, Performance of other portfolio
companies, their objectives for investment and the exit
preferences.
It is to be remembered that the fund assessment is a two way
process and the company should not hesitate to ask for references
of the investors.
Mr. Mangesh PathakCo-Founder,
Ambit Pragma Fund
“Matching the Fundto the Proposition”
ADDRESS BY EMINENT SPEAKERS
Mr. Joshi highlighted the shortcomings and difficulties faced by the
start-up companies and companies in SME Sector.
Small scale start ups have difficulty in raising funds
Debt equity norms are stricter. Institutions want higher equity
from promoters.
Track record required for raising money from public.
Operational Issues
Team not in place
No internal Control
Centralized decision making
Geographical Constraints
Over dependence on few customers/ suppliers
Non clarity of Business Model
Lack of Networking
He reiterated that technology oriented small units find difficulty in
raising adequate finance as conventional financing is security
oriented. This void is met by the venture capital funds He added
that monitoring is most crucial for success of venture investment.
Venture Capital funds make considerable value addition through
hands on management.
A venture capital fund adds value to the organisation as under:
Strategy Formulation & implementation
Streamlining internal control systems & processes
Networking & Marketing tie-ups
Key personnel recruitment & team building
Appointment of experts & creation of advisory boards
Establishing good corporate governance practices
Conflict resolutions (at times)
Negotiating for technology transfer
Ensure regular accounting and secretarial audits
Budgeting & MIS
Showcasing the companies in various forums
Active participation in Board Meetings
Broad basing the board
Negotiating with strategic investors
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Mr. Mihir JoshiManaging Director,
Gujarat Venture Finance Limited
“The Value AddedRole of Investors”
CO NNECTInaugural Issue, January 2011 57
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What is due diligence? Due Diligence is the process through
which a potential acquirer evaluates a target company or its
assets for acquisition. It is based on the maxim
meaning
Process is different from audit – level of assurance and the
perspective to be used differs.
Due Diligence is about learning the past with an eye to the future
– if we don't learn from the past, we are bound to repeat it. We
are bound to fail, if we don't look to the future.
It is not about finding ways to stop a deal – it is about presenting
issues to investors to work around.
Most importantly, due diligence is about verifying that
representations made during course of negotiations are correct.
Due diligence is about applying common sense to identify hurdles
and ways around them in a business proposal. Due diligence needs
to be focussed on acquirer's expectations from a deal like, What is
the deal rationale, What synergies does the deal offer, What is a
smooth manner to exit, What premium to pay and what is the walk
away price.
Look beyond a tick and bash checklist approach – understand
the deal logic
Take a focused objective and unbiased approach to the process
– give harsh recommendations, if required
Assess whether business is what it is made out to be
Qualitative and quantitative analysis on financial performance
to get a 'feel' of sustainable / normalised earnings
Identify hidden liabilities/ onerous clauses in contracts / other
exposures
Investment by private equity fund in a company
Acquisition of a company by another company
Entering in to any joint venture / other commercial arrangement
by a corporate entity
Preparatory work for bidding for various contracts
Ascertaining creditworthiness of prospective customers before
doing business with them
Periodic business analysis to ascertain areas of improvement
The steps required to be taken by any company depends on the
specifics of that company. However, generally, the following points
need to be taken care of:
Management information systems
Adequate documentation in the form of contracts / agreements
Agreements with related parties
In case of customer concentration risk, document quality of
relationship with customers
Pre-approvals from lenders for proposed transaction
Carry out periodic 'financial-health' checkup
“CAVEAT
EMPTOR” “BUYER BEWARE”
Due diligence experts should focus on the following:
Due diligence services are availed for varied purposes:
How should a company prepare for due diligence?
He touched upon the role of a good finance adviser in the fund
raising process. The role of Financial Advisor has become all the
more important in the present day complex financial world. The
success of the financial adviser depends upon specific technical
knowledge, bringing out USP, formulating strategies, practical on
hand experiences, tracking trends and creating values. Following
are the key responsibilities of a Financial Adviser:
Identification of the Potential Company with excellent growth
prospects
Candidly assess the challenges
Help the client understand how a Potential Investor will view the
Company
Develop, Validate and Document Historical as well as Projected
Financials
Obtain concurrence of expectations of Value and Terms
Prepare documentations to market the Company
Identify Potential Investors
Initiate contact with Potential Investors & obtain signed
Confidentiality Agreements
Provide Prospective Investors with detailed information &
arrange site visits
Obtain Indications of Value and Terms Or Alternately Definitive
Declines.
Negotiate a Term Sheet or Letter of Intent
Prepare the Company for Due Diligence
Organize & Manage the Due Diligence Process
Continually Track Progress and clarify Open Issues
Assist Negotiating Business and Financing Issues in the Definitive
Agreement
Stay until the successful closure of the transaction i.e. “Money Hits
the Bank”
Investor's preference depends mainly upon 3 S's: Which Sector the
company belong to, its size and its stage of growth. The investors
look out for Management quality, Market Positioning, Growth
Potentials, Sustainability, Profitability, Past and Future, Valuations,
Returns and exit options. Constant follow-up is needed to
understand the investor's areas of concerns, Address concerns
properly, signing of NDA, to explain the assumptions in the model,
arranging plant / sight visits and getting the feedback from the
investor.
Financial Advisor assists the Company in preparations for
Commercial and Financial Due Diligence. Legal due diligence
should also be conducted through legal experts. Preceding to the
closing of the deal the company must ensure that it has fulfilled all
the conditions like - Group Structuring – If any, ROC Filings, Income
Tax Filings, Secretarial Paper Work, Obtain all the necessary
clearances and finally the remittances.
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TARGET RIGHT INVESTORS
“The Role Of A GoodFinancial Advisor in theFund-Raising Process”
Mr. Raj ShroffDirector, Aaryaa Cross Border
Advisors Pvt. Ltd.
Mr. Sushrut ChitaleDirector,
Infogenia Analytics Pvt. Ltd.
“Due Diligence Processand Documentation”
CO NNECT Inaugural Issue, January 201158
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Mr. Tambe explained about the concepts of venture capital
and private equity.
Venture capital is a broad subcategory of private equity
that refers to equity investments made, typically in less
mature companies, for the launch, early development, or
expansion of a business.
Private equity is equity investment in high growth companies
whether listed or unlisted. Investments in private equity most
often involve either an investment of capital into an
operating company or the acquisition of an operating
company (Buyout funds) or purchase of shares of existing
investors / promoters In India.
PE funds are active across sectors funding both listed and
unlisted companies. Funding in listed companies is called
PIPE (Private Investment in Public Enterprises). When a bank
is reluctant to extend loan to a new venture, a venture
capital fund takes a bet on the business model. These
venture capitals are suitable for companies who can fully
leverage their strengths, the industry in which the company is
operating is growing at least 15% and the company has the
right strategies to achieve exponential growth.
Business plan highlights markets, company, expansion
plan
In-depth financial model
Fund carries out extensive research and business analysis
Broad valuation parameters and commercials are
agreed
Term sheet highlights in principle agreement to key
commercial terms
External party appointed for financial due diligence
Valuation adjustment post Due Diligence reportExecution of shareholder agreement and closure
Create MIS systems and budgeting to formulate and
track business numbers
Private equity fund would monitor business numbers
periodically on its own or through external partyKey business parameters are taken up at Board for
discussion
Traditional means fund normal growth rate – PE funds
can fund above normal growth rate
Not just Capital – Strategy and professionalism
Long term partner – successive funding requirements
Improves perception and valuation
Creates high entrepreneur driveBuilds in place systems, processes and MIS reporting
Pre-infusion of money involves
Post-infusion of money involves
The SMEs should consider resorting to Private
Equities due the following reasons:
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Mr. Shrirang TambeDirector,
Infogenia Analytics Pvt. Ltd.
“Introduction andEligibility Criteria forObtaining PE & VC”
Describing about how to write a good business plan she
mentioned that growing is less risky than not growing. An
entrepreneur starts in a small way and grows gradually into
a big organisation.
There are two major strategic issues while growing. One is
the strategy related scale of operation the other is strategy
related to management.
Scale strategy deals with professional attitude of the
entrepreneur in managing the business and operational
capability to diversify and expand the business activities.
The management strategy encompasses financial acumen
of the promoter and decision makers. People management
is very essential for maintaining the growth of the
organisation. While growing, it is important to build a
cohesive team of managers.
To ensure growth, the promoter should take into
consideration the following:
What is the growth that I should aspire?
Does my organisational business model warrant for
equity infusion & exit route?
How much of a stake is leveragable by the organisation
and the entrepreneur?
Plan for the scenarios – Optimistic as well as pessimistic.
Build organisational efficiencies and safeguard your
interest.
Know the risks and opportunities trade off
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Ms. Sonali TipreFounder & Managing Director,
Margin'sview Management
Services
“Strategy andPlanning forBusiness Growth ”
CO NNECTInaugural Issue, January 2011 59
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The private equity investments involve three players namely,
investors, fund managers and investee companies.
The investors mostly consist of institutional investors.
Normally they do not have decision making say in the
operation of the company. They will have access to
information regarding underlying investments. They will
also use their network wherever possible to help underlying
investments.
They take investment decisions and interact with investee
companies. They charge fees for their services and also get
a significant profit share (normally 20%).
These companies give up a certain extent of ownership in
their company and enter into a partnership with the fund
managers. There is a significant difference between debt
financing by lending institutions and equity financing by the
PE Funds:
Appetite for risk and returns is secondary to the promoter
As a result, interest is payable irrespective of business
performance
Return is in the form of interest / fees earned
Interest must be paid on due date
Thousands of borrowing accounts
Returns from third parties
Risk and return appetite equivalent to the promoter
Returns are dependent directly on business performance
Returns are evaluated as multiples rather than IRRs.
Absolute returns may be more important than multiples or
IRR.
10- 15 investments over the Fund investment life of 4
years
In India, typically PE Funds look at businesses growing over
30% p.a. and the growth has to be sustainable.
The investors consider the following in the investee
companies (Promoters):
What is the entrepreneur's ability to grow the business?
What are the other group companies? Other business
interests?
What is the depth and experience of the existing
management team? Normally, the PE Fund's involvement
is not limited to board meetings but active participation in
growing the business
Relationship is based largely on trust and alignment of
interest. There are very few historical instances of PE
Funds going to Courts
Openness to Changes that normally a PE fund may look
for :
Introduction of corporate governance measures,
changing statutory auditors
Introduction to new markets, evaluation of inorganic
growth opportunities
Changes in Management structures – Hiring external
professionals, incentive/ESOP based compensation
structures
The investors would like to exit as early as possible as the
partnership is for a limited time from 3 to 7 years. It is not a
perpetual relationship. Exit is normally identified with
reasonable amount of clarity at the time of investment. They
do not rely on business cashflows for exit (except where
there is project specific equity, as in real estate or
infrastructure). The exit routes consist of IPOs, Sale to
strategic investor, and sale to another financial investor.
An experienced investment banker brings significant
benefits
Exposure and relationships with multiple funds
Helps negotiate the right valuation, the right terms and
conditions and helps in future conflict resolution
Choosing the right banker….
See track record of deals closed.
Speak to previous clients
If it is a large banking outfit … who is the professional
handling your transaction? What is his personal track
record?
It is to be noted that in case of family owned businesses they
should choose the right investor and timing rightly even if it
takes time. They should be consistent in their approach and
practice transparency.
Ask for list of information requirements in advance.
Invite external service providers only once all the
information is compiled.
It is easier if the scope of Due diligence is understood at
the time of term sheet itself
INVESTORS
FUND MANAGERS
INVESTEE COMPANIES
Characteristics of lending institutions
Characteristics of PE Funds
EXIT OPTIONS
THE ROLE OF AN INVESTMENT BANKER
DUE DILIGENCE PROCESS
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“Preparing forPrivate Equity:Steps to betaken by SMEs”
Ms. Sangeeta ModiFounder Member,
Access Asset Managers
CO NNECT Inaugural Issue, January 201160
He explained in detail about the terms sheets.
A Term Sheet is a document through which the venture capitalinvestors communicate to the promoters their intent of investingmoney in a company and the terms and conditions under whichthe venture investor would make the investment. In other words, aterm sheet is the beginning of the negotiation process.
It is generally prepared by lawyers post a limited review of thebusiness and the industry but prior to the detailed due diligenceof the company.
It contains the basic commercial understanding between thepromoters, company and investor for a given investmenttransaction.
It is put forward by the 'lead investor', who is leading theinvestment round. If there are other investors, they usually followalong using the same terms.
Term Sheets are also known by following names:
Memorandum of Understanding (MOU)
Letter of Intent
Bid document
Term Sheets are non-binding and indicative in nature.
The signing of the Term Sheet is the pre-ultimate stage of gettingfinancing done. Once the investor and promoters agree on aTerm Sheet, the due diligence process starts and assuming allgoes well, the money should arrive in the Company.
To capture the commercial understanding.
To negotiate and agree on the terms and conditions.
To fix the key figures and clauses for Investment andshareholders agreements.
To set out the negotiation procedure (time schedule, exclusivity,costs, etc.)
In case the venture capital investors agree to invest in thecompany, the Term Sheet is converted into a ShareholdersAgreement.
It specifies the willingness of the buyer to buy certain stake in thecompany at a certain valuation.
Company, Investors, Promoters, Existing Shareholders
Invested amount / tranches
Share price and type of shares
Valuation of the Company
Anti-Dilution Protection
Closing and drawdown schedule (No. of tranches & dates onwhich amounts would be invested by the investors)
Use of the proceeds from the investors
Business Plan
Representations and Warranties
Conditions Precedent
Escrow for shares / share Certificates
It specifies rules about relationship between the company, investorsand other shareholders after investment is made in company.
Composition of Board / Management
Dividend Policy
Liquidation Preference
Subscription Rights
Board seats
Founders lock-up period
Future participation rights
Protective provisions
Non-competition obligation
Information rights of investors
Veto rights of investors
Transfer restrictions (right of first refusal/right of pre-emption)
Exit provisions namely IPO, Tag along, Drag along, put option.
Timing
Validity
Confidentiality
Exclusivity
Applicable Law
Jurisdiction / Arbitration Clause
Veto rights to investors
Conditions Precedent
Liquidation preference
Anti-dilution provisions and Future participation rights
Founders lock-up period
Protective provisions
Board seats
Exit options – IPO, put/call options, buy-back, etc
Tag-along rights
Drag-along rights
Validity
No Material Adverse Change (MAC)
Don't sign anything that involves personal obligation.
For example, a clause that says the promoter has to buy backshares with his own money.
It is necessary to negotiate for more time before the drag-alongrights can be implemented.
Think through the board composition before appointing therepresentative of the investor on the board.
Term Sheet should be simple to understand.
Identify the most important points to be achieved in thetransaction agreements and make sure these issues are coveredby the term sheet.
Do not treat Term Sheets as templates as each situation is unique.
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Term Sheet – Objective / Purpose
Contents of the Term Sheet
Important Aspects of Terms Sheet
While negotiating a term sheet the following need tobe considered:
(A) Investment Agreement Issues
(B) Shareholders' Agreement Issues
(C) Procedural and General Aspects
Mr. Raju NanwaniVice President, Legal and
Company Secretary,
ICICI Securities
“UnderstandingTerm Sheets”
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STREAMLINING BANKING FINANCE FOR SMEs19th January 2010 | SME Chamber of India Conference Hall, Mumbai
The Banking sector works closely with the SME sector to
achieve equitable and inclusive growth. The Government
has taken many measures for the development of SME
and set up MSME Re-finance scheme and MSME Risk
Management Schemes. The guiding factor between
bankers and its customers is the Trust. There are many
schemes from the banks for export oriented SME.
Credit is the lifeline of a business. The PMO is looking into
the problems of SME and monitor the credit flow to this
sector. In the round table meeting of OECD, there was
emphasis on SME and entrepreneurship financing. The
problem of SME is not unique to India but it can be found
in other countries. SME face many problems like
insufficient working capital which is a global
phenomenon. SME complain that banks do not lend
adequately and when needed and the banks are
reluctant to lending to SMEs due to high risk factor. The
rating agencies and the supporting organization like
SME Chamber of India should bridge the gap between
banks and its SME customers.
SME also suffer with insufficient equity capital. VC Fund
should come forward to invest in SME. It is observed that
many SME are closely held ownership structures with
least accountability and transparency. The proposed
SME exchange with relaxed listing guidelines will be a
boon to the SME to enter into the capital markets.
Ms. Ravneet Kaur - Joint Secretary (Banking & Insurance
Department), Ministry of Finance and Chairperson, Exim
Bank of India addressing the delegates
ADDRESS BY CHIEF GUEST
KEYNOTE ADDRESS
There is an urgent need to sensitising the SME and the
banks for mutual benefits.
The SME supporting agencies should apply pressure on
defaulting SME to adopt good governance and ethical
practices. Because of a few defaulting SMEs the entire
sector is being blamed. SME have a responsibility to the
society and to all its stake holders.
The enterprises should keep on changing according to
the latest business and economic trends and look for
avenues for expansion and diversification. An enterprise
starts in a small a way and over the period gain sufficient
experience, access knowledge and upgrade
technologically to become a medium and then to a big
company.
Today technologies are cheaper and easier to obtain
and SME should raise the scale of manufacturing. We
can easily achieve a respectable 7.5% growth. Tata's
Nano project is a good example of crisis management.
SME should think of utilizing venture capital funds for
their expansion.
It is noteworthy that SME are the major suppliers to
corporate, PSU and MNCs. Despite many problems SME
contribute significantly to revenue department and it is
like a hen giving golden eggs. Therefore the revenue
department should be sensitive to the problem of SME.
The rule and the procedures of the Government
departments and banks towards SME should be
streamlined and stabilised. Revenue maximisation and
cost minimisation should be the objective of the SME.
Prof. Suresh Tendulkar - Director, Central Board, RBI and
Former Chairman, Economic Advisory Council to Prime
Minister addressing the delegates
CO NNECT Inaugural Issue, January 201162
While dealing with banks the small entrepreneurs are at the mercy
of the Branch Manager in majority of the cases. This situation should
change and there should be transparency in all the dealings
between the banks and its customers. The SMEs should also adopt
good governance in their business activities and provide authentic,
accurate and relevant information to the banks to gain their
confidence.
On the lines of a process industry, the bank of Baroda
conceptualized SME loan factory, a dynamic approach employing
assembly line concept. The idea is to move the papers in sequential
manner as in the assembly line of a factory. A proposal is
generated by a sales force, referred to a relationship manager,
pass through a processing department, approved by consent
authorities and the loan is disbursed. The entire cycle has to be
completed within 14 days. 37 such loan factories are in operation.
SMEs should also cultivate the habit of self assessment before
approaching the bank to quicken the process. SME gold card is also
issued to privileged customers to provide necessary services. The
officers are informed to forward their queries at one go so that the
customers can respond easily and there is no need for frequent
visits to banks.
Training is essential for SMEs as well as for the Branch Managers to
understand each others requirements. Both should be sensitive to
others views. The problem with small enterprises is that it revolves
around one man for all managerial decisions and actions.
SMEs require many more support than just finance, like marketing,
H.R. Technology, Quality etc. and other service providing agencies
should coordinate with the banks in this regard. As per a report on
SSI, it is observed that the management contributes the maximum
obstacles in the progress of the small enterprises. It should be
remembered that the structure should follow the capability.
Dr. Anil Khandelwal - Former CMD, Bank of Baroda & Chairman,
Baroda Pioneer Asset Management Ltd. addressing the delegates
KEYNOTE ADDRESS
The credit ratings has become more crucial now-a-days than
optional a few years back. There are plenty of advantages in
obtaining the credit rating from a reputed 3rd party credit rating
agency. It enhances the credit worthiness of an enterprise in the
eyes of customers, suppliers, bankers, investors, importers,
exporters, regulating agencies and the public at large.
There are special criteria applicable while rating a small and
medium enterprise which is different from that of the Corporate.
Moreover, the banks also offer concessional interest rates to the
rated companies.
Overseas businessmen prefer to deal with companies with good
credit rating. There are government schemes which subsidies the
initial cost in going in for ratings.
Mr. D. R. DograMD, Credit Analysis and Research
(CARE) Limited.
“Rating beyondnumbers –SME Perspective”
Exim Bank offers a variety of products and services for the small
and medium enterprises engaged in exports of goods, services and
project as well as dealing in imports.
The SMEs are greatly affected by the credit crunch and more so by
the export oriented units. There should be a concerted effort to
contain the slow down which is affecting the business all over the
world. Fortunately, India is not affected so much due to a series of
quick and appropriate decisions taken by the Government and
Reserve Bank of India.
Exim Bank offers export finance to SMEs, assist them in finding and
exploring new markets and undertake new projects in other
countries. With the line of credit arrangements, the SMEs are able
to do business with many developed and developing countries.
Mr. Samuel JosephGeneral Manager, EXIM Bank
“Economic Stimulus:Measures to BoostSME Growth”
ADDRESS BY EMINENT SPEAKERS
CO NNECTInaugural Issue, January 2011 63
“Role ofBanking Sectorfor SME Growth”
Mr. Sangram DashDeputy General Manager,
(Manufacturing),
State Bank of India.
The Prime Minister's Task Force emphasizes on greater credit
flow to MSME Sector. The Indian SMEs face many problems and
have a lot of constraints. Fear of loss makes many SMEs to adopt
traditional business practices. They are not aware of the many
Government schemes and few of them utilize the same.
Low scale of activities, obsolete machines, delayed payments
from customers, lesser profitability, lack of innovative marketing
strategies, inability to attract and retain high quality workforce
and limited capital base are a few to mention.
Moreover, the SMEs are fragmented and highly heterogeneous
in their activities, products, markets, size, operations etc. Many
of them become sick due to poor management.
With a view to assist the SME Sector, the SBI have a
decentralized SME team to establish person to person contact
(P2P). Separate processing centres and loan sections are
created to receive applications and transact business with SME.
SBI charges only 8% for loans upto 5 lakh. Finance is also
available for supply chain management.
There is a unique scheme in which centrally financed products
are available for the SME Vendor, the industry major who buys
the products from the SME as well as the dealer of the final
products. Separate funds are available for technology
upgradation, cluster development and bulk purchases.
Mr. Deepak Narang - General Manager, Allahabad Bank
Ms. Susmita Das Gupa - Chief Ideator, Smart IdeAS
Mr. Chaitanya Shah - CEO, CKPP Associates
OTHER EMINENT SPEAKERS
Delegates at the Conclave
CO NNECT Inaugural Issue, January 201164
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Market Development
Branding, Promotion and Publicity
Marketing Strategy and Initiatives
Online marketing
Franchise, Distributorship & Dealership
Exports & Imports
Digital and Print Media Marketing
Strategy for Brand Building
Supply Chain Management
Procurement – Private and Government Sector
Consultancy and Concept Marketing
Collaborations and alliances
Market Survey, Study and Research
Warehousing, Logistics and Cold Storage Facility
Packaging, Printing, and Packing Facility
OUR SERVICES IDENTIFIED SECTORS
For Business Enquiries and Services Contact
Mr. Hemant Salunkhe - Director
Tel:. +91 - 22 - 2871 1396 / 6677 0218 | Fax: +91 - 22 - 2874 3543 | Email: [email protected] | Web: www.bricksmarketing.com
Reg. & Correspondence Office: 102, Murlidhar Baldev Estate, Near Vikas Estate, Off. Aarey Road, Goregaon (E), Mumbai - 400 063, India
Inaugural Issue, January 2011 67 CO NNECT
H. E. Mr. Balkrishna Shetty INDIA-SWEDEN SME DEVELOPMENT COUNCIL INDIA-
LATVIA SME DEVELOPMENT COUNCIL Mr. S. Maheshkumar
Mr. Prashant Nagre Mr. Chandrakant Salunkhe
Mr. Chaitanya Shah
launched the bi-lateral trade promotion divisions - “ ” and “
” on 18th December 2009 at Mumbai. In Picture from (Left to right) - General
Secretary, SME Chamber of India, – Head, Pharmaceuticals, Sterling Biotech Ltd, - President, SME
Chamber of India and - CEO, CKPP Associates
GLIMPSES OF OUR PAST EVENTS
Mr. Chandrakant Salunkhe -
Mr.
Paul Abela -
President, Small & Medium Business
Development Chamber of India (SME Chamber of India), and
President, GRTU (Chamber of Small & Medium
Enterprises), Malta signing co-operation agreement between SME
Chamber of India and GRTU, Malta for setting up India - Malta SME
Development Council on 24th November 2009 at Mumbai
Chief Guest Prof. Suresh D. Tendulkar
Work Shop on SIX SIGMA
Mr. Paul Joseph
- Chairman, Indian SME
Knowledge Forum, Director, Central Board of RBI and Former
Chairman, Economic Advisory Council to the PM inaugurating the
on 7th October 2009 at New Delhi. Other
(from L to R) - Principal Advisor, MCX-SX, Mr.
Chandrakant Salunkhe Mr. A.
Rameshkumar
Mr. N. C. Vasudevan
- President, SME Chamber of India,
– Chairman, SME Chamber of India, Northern Region,
New Delhi) and – Director General, National
Productivity Council , Govt. of India.
Mr. Chandrakant Salunkhe
Mr. Dinsha J. Patel
- President, SME Chamber of India
presenting the flowers to - Hon'ble Minister of
State (Independent Charge) Micro, Small and Medium Enterprises
during Interactive Meeting on 8th October 2009 at New Delhi
Mr. R. M. Nayak
Mr. Allen Pereira
Mr.
Chandrakant Salunkhe
- Ex Banker & Chairman, Banking & Finance
Advisory Committee, SME Chamber of India, -
Chairman & Managing Director, Bank of Maharashtra and
- President, Small & Medium Business
Development Chamber of India (SME Chamber of India) during
Interactive Meeting on 10th September 2009 at Mumbai. Mr. Pereira
visited SME Chamber of India’s office to understand the problems &
issues of SMEs related to bank finance and promised that Bank of
Maharashtra will support SMEs and the Chamber
Inaugural Issue, January 2011 69
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S7 GLOBAL SME PARTNERSHIP SUMMITth
Theme: Strengthening Technology and Innovation for SME Development21 February 2009 | Hotel Leela Kempenski, Mumbai, India.
st
INAUGURATION OF THE SUMMIT
Mr. Montek Singh Ahluwalia
Mr. Nanasaheb B. Patil, IAS Mr.
Chandrakant Salunkhe Mr. A. Rameshkumar
Mr. Tamer Taskin
Mr. Joseph Massey Mr. Maheshkumar
- Deputy Chairman, Planning Commission, Government of India inaugurating the Summit Other
dignitaries (L to R) - Principal Secretary, Agriculture & Horticulture, Government of Maharashtra,
- President, SME Chamber of India, - Chairman, SME Chamber of India, Northern
Region, New Delhi and MD & CEO, Asia Pragati Capfin Pvt. Ltd., – President, Aegean Region Chamber of
Industry (EBSO), Izmir, Turkey, - MD & CEO, MCX Stock Exchange Ltd and - Director &
General Secretary, SME Chamber of India
Even a small enterprise in a remote area that does not have
a big modern plant or good infrastructural facilities should
create an excellent website to show case their capabilities.
In the present globalised world connected by hi-tech
communication, a good website will enable them to reach
out to many prospective customers around the world,
observed Mr. Montek Singh Ahluwalia, Deputy Chairman,
Planning Commission while inaugurating Summit
He has also launched the two initiatives of the SME
Chamber of India
which are meant for
enhancing the knowledge and export potential of the SME
Sector. It is worth noting that
Chairman, Economic Advisory Council to the Prime Minister
has kindly consented to be the Chairman of the
He emphasized that the SME Sector should adopt new
technology and innovative methods in order to remain
competitive. Further, he said that India, Asia's 3rd largest
economy may end up with a growth rate of about 6.5% in
the second half of this fiscal year. The Government has
provided a refinance facility through SIDBI to provide
money to Banks for onward lending to MSMEs. Therefore,
the Banks should gradually change their risk perception and
provide more credit to the SME Sector. He has also
recommended to the SME entrepreneurs to ask the
Government officials to provide more infrastructure
facilities rather than asking for some concessions and grants.
The Government is also planning an additional stimulus of
around 1% of the GDP amounting to Rs. 60,000/- crores.
Growth is a problem but inflation is not a problem.
Compared to many other countries India is reasonably
doing well. The fiscal and the monetary measures have
enough flexibility to respond to the prevailing economic
situation.
“Indian SME Knowledge Forum” and
“SME Export Promotion Council”
Prof. Suresh Tendulkar,
“Indian
SME Knowledge Forum”.
ADDRESS BY CHIEF GUEST
Mr. Montek Singh Ahluwalia – Deputy Chairman, Planning
Commission, Government of India addressing the delegates
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Mr. R. K. BakshiExecutive Director, Bank of Baroda
Mr. T. R. BajaliaExecutive Director, IDBI Bank
Mr. M. G. Sanghvi
Executive Director, Bank of MaharashtraMr. Muruga Thambiran S
Head, Business Banking, (GRCB), Barclays Bank PLC.
ADDRESS BY EMINENT SPEAKERS
Mr. Sharief Habib Al Awadhi
Director General, Fujairah Free Trade Zone Authority
Mr. Tamer TaskinPresident, Aegean Region Chamber of Industry(EBSO)Izmir, TURKEY
Mr. Dinesh Rai, IASSecretary, Ministry of MSME, Government of India
Mr. Anthony J. C. De Sa IASDirector, UNIDO Centre for South - South Industrial Co-operation
CO NNECT Inaugural Issue, January 201170
Mr. Montek Singh Ahluwalia
Mr. Chandrakant Salunkhe Mr. Tamer Taskin
Mr. Anthony J. C. De Sa, IAS
Mr. Joseph Massey Mr. A. Rameshkumar
- Deputy Chairman, Planning Commission, Govt. of India releasing research paper on
SME CHAMBER OF INDIA and MCX SX. In picture
(from left to right) - President, SME Chamber of India & IITC-INDIA, – President,
Aegean Region Chamber of Industry (EBSO), Izmir, TURKEY, - Director, UNIDO Centre for South -
South Industrial Co-operation, - MD & CEO, MCX and - Chairman, SME Chamber of
India (Northern Region) and MD & CEO, Asia Pragati Capfin Pvt. Ltd.
“Meeting
Financial and Risk Management - Challenges of SMEs” jointly prepared by>
Release of Research Paper on
“MEETING FINANCIAL AND RISK MANAGEMENT - CHALLENGES OF SMEs”
Inaugural Issue, January 2011 71
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Mr. Dinesh Rai, IAS - Secretary, Ministry of MSME, Government of India is conferring the Awards in the presence of
Mr. Chandrakant Salunkhe - President, Small & Medium Business Development Chamber of India (SME Chamber of India)
PRESENTATION OF
ANNUAL SME & ENTREPRENEURSHIP EXCELLENCE AWARDS - 2008
Mr. Tamer Taskin
H. E. Mr. Turgut Koyuncuoglu
- President, Aegean Region Chamber of
Industry, Izmir, Turkey accepts the award on behalf of
- Hon. Consul General of India,
Izmir, Turkey, (Appreciation Award for Supporting Indian SMEs)
MD, Nishotech Systems Pvt. Ltd.
Awarded for Excellence in Manufacturing Sector
Mr. Nilesh Badani - Mr. Shrikant B. Pawar - Proprietor, Top Gear
Transmissions, Awarded for Excellence in Manufacturing Sector
Mr Mitin A. Patel - MD, Prima Automation (India) Pvt. Ltd
Awarded for Excellence in Manufacturing Sector
CO NNECT
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Delegates at the Award presentation function
Mr. Mahesh Maheshwari - Director, Nimbark Fashions Ltd.
Awarded for Excellence in Manufacturing Sector
Mr. Vishnu Varshney - Managing Director, GVFL Limited.
Appreciation Award for Supporting SMEs
Mrs. Thripti Kalra - Director, Kalra Overseas Pvt. Ltd.
Awarded for Excellence in Manufacturing Sector
Mr. Vasant Phadtare - MD, Kavitsu Transmissions Pvt. Ltd.
Awarded for Excellence in Manufacturing Sector
Mr. Vikas Mahtani - Director, Kavis Fashions Pvt. Ltd
Awarded under Young Entrepreneur Category
Mr. Ashok Goyal - Managing Director, BLR India Pvt Ltd.
Awarded for Excellence in Service Sector (Logistics)
Ms. Sonali Tipre - CEO, Margin'sview Management Services,
Awarded under Women Entrepreneur Category
Inaugural Issue, January 2011
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23 December, 2008 at Hotel Grand Hyatt, Mumbaird
Conference on
SME FINANCE - Roadmap for SME Growth& Global Financial Crisis and Recession - Impact on Indian Economy & SMEs
Prof. Suresh D. Tendulkar
Mr. Chandrakant Salunkhe
Mr. Jignesh Shah Dr. Amarendra Sahoo
Mr. A. Rameshkumar
Mr. Maheshkumar Mr. Rakesh Rewari
Mr. Joseph Massey
- Chairman, Economic Advisory Council to the Prime Minister and National Statistical Commission
inaugurating the Conference in the presence of (Left to Right) - President, Small & Medium Business
Development Chamber of India, - Chairman & Group CEO, Financial Technologies Group, -
CGM, RPCD, Reserve Bank of India, - Chairman, SME Chamber of India, Northern Region, New Delhi and
MD & CEO, Asia Pragati Capfin Pvt. Ltd., - General Secretary, SME Chamber of India, - Dy.
Managing Director, SIDBI and - MD & CEO, MCX Stock Exchange Ltd.
73 CO NNECT
Prof. Suresh Tendulkar - Director, Central Board, RBI
and Former Chairman, Economic Advisory Council to PM
ADDRESS DIGNITARIES
Mr. Jignesh Shah – Chairman & Group CEO,
Financial Technologies (India) Limited
Dr. Amarendra SahooCGM, RPCD, Reserve Bank of India
Mr. Rakesh RewariDeputy Managing Director, SIDBI
BUSINESS CLUB
A Networking Platform
The SME Business Club was inaugurated by , Chairman, Economic Advisory Council to the
Prime Minister, in the eminent presence of (L to R) Mr. Chandrakant Salunkhe, President, Small & Medium Business
Development Chamber of India, Chairman, Securities & Exchange Board of India (SEBI),
Member, Advisory Board, Financial Technologies Group and Former Chairman of SEBI
Secretary, Ministry of Micro, Small and Medium Enterprises, Government of India on 3rd May, 2008 at Mumbai.
Hon'ble Dr. C. Rangarajan
Mr. C. B. Bhave, Mr. G. N.
Bajpai, Mr. Dinesh Rai,
“SME Business Club – A Networking Platform” Small & Medium Business Development Chamber of
India and India International Trade Centre (IITC-INDIA)
is initiated by
to establish contacts and enhance business, trade, exports and
provide opportunity to identify business partners and interact with manufacturers, suppliers, buyers, exporters, traders,
service providers from various sectors.
Unique opportunity to exchange company profiles, business information, domestic trade, export and import enquiries and
other requirements.
The Club will organise One-to-One and Interactive Meetings to generate trade leads and business opportunity from cross
sectors.
The Club will provide important information on latest products, services, schemes, advantages, benefits of various
sectors.
The Club will also assist to source and update knowledge on negotiating skills, business strategies, market trends &
awareness, innovations, advanced technologies and management techniques.
The Club will resolve the problems and issues related to Industries, Trade, Exports, Imports, Banking & Financial
Institutions and Government Departments. Issues which are not cleared within the Club will be taken up by SME Chamber
of India for further follow up.
The Organisers will provide assistance to the members to enhance their domestic trade and exports by using their
contacts worldwide.
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INAUGURATION OF SME BUSINESS CLUB
ABOUT SME BUSINESS CLUB
For Assistance, Support Services and More Information Contact
Tel: +91 - 22 - 6677 0218 / 6667 4444 / 6150 9800 | Fax: 2874 3543 | Email: [email protected] | Website: www.smebusinessclub.in
3, Upper Gr Flr, Samruddhi Venture Park, Marol MIDC, Near Hotel Tunga Paradise, Andheri (E), Mumbai - 93.
101, Murlidhar Baldev Estate, Nr Vikas Estate, Off Aarey Road, Goregaon (E), Mumbai - 63.
Central Office:
Regd. & Correspondence Office:
Mr. Chandrakant Salunkhe - Founder President
Inaugural Issue, January 2011 75
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SConclave on
Empowering Indian SMEs for 2020Opportunities and Challenges23rd August 2008 | Hotel Grand Hyatt, Mumbai
Mr. Montek Singh Ahluwalia
Dr. R. A.Mashelkar Mr. Anil Deshmukh
Mr. Rajinder Singh Mr. Jignesh Shah
Ms. Malini Shankar
Mr. Rasesh Kanakia Mr. Chandrakant Salunkhe
Mr. Maheshkumar
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,
Deputy Chairman, Planning Commission, Govt. of India inaugurating the conclave in the presence of
President, Global Research Alliance, Hon’ble Minister for Public Works (Public
Undertakings), Maharashtra, - Chairman & CEO, Global Absolute Group, Chairman & Group
CEO, Financial Technologies Group, Development Commissioner - Industries, Government of Maharashtra,
- Chairman, Kanakia Group President, Small & Medium Business Development
Chamber of India and - General Secretary, SME Chamber of India
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EMINENT SPEAKERS
Dr. R. A. MashelkarPresident
Global Research Alliance
Mr. Jignesh ShahChairman & Group CEO
Financial Technologies (India) Limited
Mr. Anil DeshmukhHon’ble Minister for Public Works
(Public Undertakings), Maharashtra
Mr. Rajinder SinghChairman & CEO,
Global Absolute Group
Ms. Malini ShankarDevelopment Commissioner - Industries,
Government of Maharashtra
Mr. Rasesh KanakiaChairman,
Kanakia Group
CO NNECT
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ADDRESS BY CHIEF GUEST
Mr. Ahluwalia said that in both industry and services, a very large
percentage of the enterprises are SMEs. Secondly a very large
percentage of the employment has also been generated by the
SMEs and finally their contribution to exports is also very high. He
said that it is not possible to think of a healthy economy if we don't
have a vibrant and healthy environment for the Small and Medium
Enterprises group. That is being true of all countries. It is true of the
dynamic economies. It is a very important sector and the
Government is paying a lot more attention on what can be done to
address the problems of the SMEs.
According to him, SMEs have many problems. The major ones are
infrastructure, credit - not only bank credit but also access to
capital, issues relating to skill development in the sense of
availability of skills, technology upgradation, human relation and
market development. These are all areas in which the Government
in the course of 11th plan are formulating and implementing
several measures.
The one most important thing to be recognised by us is the
deficiency of infrastructure, which are pretty widespread in India.
The deficiencies of infrastructure operate in a very asymmetric
way. Large organisations can insulate themselves from
infrastructure deficiencies because they are large enough to create
their own infrastructure. Small enterprises have to rely on the
general level of infrastructure or general quality of infrastructure
and the fact is that the general quality of infrastructure offer
constraints especially to the SME sector. So quite honestly my
advice to the SME sector is to insist the concerned authorities to
improve the infrastructure facilities.
Again among the infrastructure, the availability of uninterrupted
power supply is of prime importance. It is observed that in states
were more emphasis is laid on power, there is improvement in the
industrialization, promotion of SMEs and increased employment.
The demand for energy is going to increase every year.
During the 10 plan the target for additional capacity power
generation was about 40,000 MW, while in the 11 Plan it is 78000
MW. So there is a very big change in what I would call a pipe line
activity as far as power sector is concerned. But something must
come out of the pipe line. Frankly, that is what the central & state
government and private sector have to make sure.
On the financial side also the Indian financial system has become
more sophisticated over the last 10 years or so. Not only the banks
but also markets are developed and there are new products in the
market today like Venture Capital and Private Equity operation
including investors from abroad getting into this sector which was
not the case earlier.
Finally a few words on the issue of skill development. He mentioned
that a really successful SME Sector would flourish most in an
environment that generates sufficient supply of skilled labour. Once
again large cooperation can do their own training in skill
development. A small organisation relies on ample availability of
skilled labour and I think this is a major area where the Government
has to do a lot.
The Government has announced recently about setting up of a skill
development corporation, which will be put in place very shortly
and this is the corporation to which the Government will contribute
money, would invite contribution from the private sector and it will
be run by a CEO as if it was private Corporation and not like a
Government body. The idea is to invite representatives of
Associations representing 10 manufacturing sectors and 10 service
sectors which we believe have a tremendous scope for employment
generation.
He appreciated the initiative taken by Mr. Salunkhe for organising
this Conclave, which is the need of the hour since SMEs are playing a
vital role for the nation development and hoped that all the
government departments and banking sector will support the SMEs
to compete with world market.
th
th
Mr. Montek Singh Ahluwalia - Deputy Chairman, Planning
Commission, Government of India addressing the delegates
Delegates at the Conclave
Inaugural Issue, January 2011 77 CO NNECT
6 International Conference onth
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Better Banking Regulations and Integration of SMEs
SME FINANCING
03 May, 2008 at Hotel Intercontinental The Lalit, Mumbaird
Hon’ble Dr. C. Rangarajan,
(L to R) Mr. T. C. Venkat Subramaniam, Mr. Muruga Thambiran S., Mr. Rajinder
Singh, Mr. C. B. Bhave, Mr. Chandrakant
Salunkhe, Mr. Dinesh Rai
Mr. G. N. Bajpai,
Chairman, Economic Advisory Council to the Prime Minister inaugurating the Conference in the eminent presence of
CMD, EXIM Bank, Head Business Banking, Barclays Bank PLC,
Chairman & CEO, Global Absolute Group, Chairman, Securities & Exchange Board of India (SEBI),
President, Small & Medium Business Development Chamber of India, , Secretary, Ministry of Micro, Small & Medium
Enterprises, Govt. of India and Member, Advisory Board, Financial Technologies Group & Former Chairman SEBI.
Dr. Rangarajan observed the catalytic role of SMEs as the growth
engines in the development of countries. In India they are major
contributors to GDP through manufacturing and exports. It is
therefore essential to support this sector crucial for achieving the
target of 9% plus growth. SMEs being widely dispersed across the
entire country also make them a key element from a regional
developmental perspective. A major area of concern of our SMEs,
particularly the tiny segment, is access to affordable credit. SMEs
also lack access to private equity and venture capital and have a
very limited access to secondary market instruments. To improve
the delivery of credit, the Government has announced a
The Government has
also set up a Credit Guarantee Fund to provide relief to those
small entrepreneurs who are unable to pledge collateral security.
Dr. Rangarajan advised the banking sector to double the credit
flow to this sector within a period of five years and support the
SMEs through risk and venture capital. To enable the schemes
introduced by the Banks to reach the rural areas, bank personnel
need to undergo special training to develop expertise to empower
SMEs. The Banks should establish specialized SME branches for
easy access to bank credit to entrepreneurs and launch State
level venture capital funds for benefit of SMEs. He noted that SEBI
is establishing a special stock exchange for SMEs to enable them to
raise capital. He lauded the role of SME Chamber of India for the
development of SME Sector and empowering SMEs to be globally
competitive.
While conferring the awards for SME and Entrepreneurship
Excellence, he appreciated the initiative of Mr. Salunkhe for
instituting these awards and congratulated all the Awardees on
their selection and conveyed his best wishes for their future growth
and higher levels of achievement.
He hoped that the awards will serve to encourage the awardees to
strive harder and contribute to the Nation's economic and social
development and also motivate more and more of our
entrepreneurs to emulate the example set by the Awardees.'Policy
Package for Stepping up Credit to SMEs'.
the
Hon’ble Dr. C. Rangarajan, Chairman, Economic Advisory
Council to the Prime Minister addressing the delegates
ADDRESS BY CHIEF GUEST
In order to sustain and grow, companies of all sizes look for new
markets. This has resulted in increased co-operation amongst
governments, trade promotion organization and individual
enterprises.
, as a leading Chamber focused on the
promotion of SME Sector set up a separate
Connecting Indian SMEs with SMEs in other countries for
effective interaction and to facilitate mutually beneficial
alliances is the main objective of this division. To achieve this, the
Chamber carried out elaborate studies about the business
opportunities in various parts of the world and entered into
agreement of co-operation with select associate organizations.
set up by the Chamber is
operating in
We are in
the process of adding more countries to this list.
The members can approach the Chamber for any of their
business requirements such as exports, imports, investments,
sourcing, representative offices, marketing agents etc. We will
assist and guide the entrepreneurs by connecting them with our
associates in respective countries.
Small & Medium Business Development Chamber of India
(SME Chamber of India)
“Bi-lateral Trade
Promotion Division”.
“SME Development Councils”
China, GCC, Turkey, Sweden, Zambia,
Malaysia, Mauritius, Bulgaria, Malta and Latvia.
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Assistance for setting up manufacturing units and offices
Arrange trade missions and delegations, buyer-seller meets,
business match making
Organise and participate in trade fairs & exhibitions,
catalogue shows
Find out and source quality products, machinery, equipments &
hand tools as per the requirement of entrepreneurs of both the
countries.
Exchange information on Technology transfer, Infrastructure,
Information Technology, Electronics, Biotechnology, Financial
Services, Pharmaceuticals & Healthcare, Food & Agriculture,
Manufacturing, Telecommunications, Information / Knowledge
based Industries, Tourism and other emerging areas.
Provide information on the newly launched products, high tech
products and industry, latest technology, market survey, market
research, project reports, project finance, quality products &
raw material and best services.
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Enhance bi-lateral trade, services and investments.
Exchange business leads.
Encourage joint ventures, technology transfers and contract
manufacturing
Solve the issues related to international business transactions.
Provide useful information on cooperation, alliances,
Government policies, Rules and regulations and taxation.
Set up permanent products and services display and exhibition
centres.
Organise trade promotional activities - conferences, seminars,
B2B meets and delegations.
BI-LATERAL TRADE PROMOTION DIVISION
India – China Business Development Forum India – GCC SME Development Council
India – Turkey SME Development Council India – Sweden SME Development Council
India – Zambia SME Development Council India – Malaysia SME Development Council
India – Mauritius SME Development Council India – Bulgaria SME Development Council
India – Malta SME Development Council India – Latvia SME Development Council
Existing Bi-Lateral Trade Promotion Division
Objectives of the Division
Activities of the Division
CO NNECTInaugural Issue, January 2011 79
Mr. Chandrakant Salunkhe - President,
signing
andSME
Chamber of India
Co-operation Agreement
Mr. Andrew Chipwende -Director General, Zambia Development Agency
Mr. Chandrakant SalunkheMs. Sun Yan Yan
- President, SMEChamber of India and - ViceChairman, Suzhou Industrial Park, China signingCo-operation Agreement
Mr. Chandrakant SalunkheMr. Gagik Vardanyan -
- President, SMEChamber of India andExecutive Director, Chamber of Commerce andIndustry of the Republic of Armenia signing theCo-operation Agreement
Mr. Chandrakant SalunkheMr. Ju IL Kim
- President, SMEChamber of India and - President,Daejeon Chamber of Commerce & Industrysigning the Co-operation Agreement
Mr. Chandrakant SalunkheMr. Colin Koh -
- President, SMEChamber of India and President,Singapore Industrial Automation Associationexchanging the Co-operation Agreement
Mr. Chandrakant SalunkheMr. Avtar Gokhal
- President, SMEChamber of India and -Chairman, Black Chamber of Commerce &Industries signing the Co-operation Agreement
CO-OPERATION AGREEMENTS
Mr. Chandrakant SalunkheMr. Tamer TA KIN
Mr. TurgutKOYUNCUOGLU
Mr. Maheshkumar
- President, SMEChamber of India and -President, Executive Board, Aegean RegionChamber of Industry, Izmir, Turkey signing theAgreement in the presence of
- Honorary Consul General ofIndia in Izmir, Turkey and -General Secretary, SME Chamber of India.
ŞMr. Abdulrahim Hasan Naqi -
Mr. Adnan A Al
Nueim -
Mr.
Chandrakant Salunkhe - Mr.
Maheshkumar
Secretary General,
Federation of GCC Chambers,
Secretary General, Asharqia Chamber
signing with
and
- General Secretary S
President
Co-operation Agreement
ME Chamber
of India.
Mr. Chandrakant Salunkhe
Mr. Michael Chen
Mr. V. Prakash
H. E Mr. Zhou Wei Qiang
- President, SME
Chamber of India and - CEO,
SIEC signing Economic Co-operation Agreement
in the presence of - Consul General
of India, Shanghai, -
Vice Mayor, Suzhou.
Mr. Chandrakant Salunkhe
Mr. Walid Tamim
- President, SME
Chamber of India and - Director,
Afghanistan Investment Support Agency signing
the Co-operation Agreement
Mr. Chandrakant Salunkhe Mr. William
Badrock
and
- Chief Executive, Halton Chamber of
Commerce and Enterprise, Cheshire signing Co-
operation Agreement
Mr. Chandrakant Salunkhe Mr. Linjun Wangand -
Administrative Vice GM, China International
Purchase Centre signing the Co-operation
Agreement
CO NNECT Inaugural Issue, January 201180
INTERACTION WITH DIGNITARIES
Dr. Manmohan Singh
Mr. Sushil Kumar Shinde
Mr. Chandrakant
Salunkhe
- Hon’ble Prime Minister of
India, - Hon’ble Chief
Minister of Maharashtra,
- President, SME Chamber of India
Mr. Chandrakant Salunkhe
Mr. N. N. Meena
- President, SME
Chamber of India with - Hon’ble
Union Minister of State for Finance, Government
of India
Mr. Chandrakant Salunkhe -President, SME
Chamber of India with Mr. Pranab Mukerjee -
Hon’ble Union Minister of Finance, Government
of India
CO NNECTInaugural Issue, January 2011 81
Mr. Chandrakant Salunkhe - President, SME
Chamber of India with Mr. John Howard - Hon'ble
Prime Minister of Australia
Mr. Chandrakant Salunkhe - President, SME
Chamber of India with Mr. Mukesh Ambani -
Chairman & MD, Reliance Group of Industries
Mr. Chandrakant Salunkhe -President, SME
Chamber of India with H. E. Datuk Seri Abdullah
Ahmad Badawi - Hon’ble Prime Minister of
Malaysia.
Mr. Chandrakant Salunkhe - President,
with
SME
Chamber of India
Hon’ble Minister of Industry and
Commerce, Bahrain.
Mr. HASAN Bin Abdallah
Al-Fakhru -
Mr. Chandrakant Salunkhe - President, SME
Chamber of India with Dr. Navinchandra
RAMGOOLAM - Hon’ble Prime Minister
Mauritius
Mr. Chandrakant Salunkhe -
Mr. Kamalnath
President, SME
Chamber of India with - Hon'ble
Minister of Commerce and Industry, Government
of India.
Mr. Chandrakant Salunkhe -
Mr. Vilasrao Deshmukh
President, SME
Chamber of India with -
Hon’ble Chief Minister of Maharashtra
Mr. Chandrakant Salunkhe -
Mr. Narayan Murthy
President, SME
Chamber of India with -
Chairman & CEO, Infosys
Mr. Chandrakant Salunkhe - President, SME
Chamber of India presenting a memento to Dr.
Sali Ram Berisha - Hon’ble Prime Minister of
Republic of Albania
INTERACTION WITH DIGNITARIES
CO NNECT Inaugural Issue, January 201182
Mr. Chandrakant Salunkhe
H
- President, SME
Chamber of India with . E. Mr. Rama Krishna
SITHANEN - Hon’ble Deputy Prime Minister of
Mauritius
Mr. Chandrakant Salunkhe
Y.A.B. Tan Sri Dr. Koh Tsu
Koon
- President,
with
- Chief Minister of Penang, Malaysia
SME
Chamber of India
Mr. Chandrakant Salunkhe - President, SME
Chamber of India with Mr. Franklin L. Lavin -
Under Secretary for International Trade, U.S
Department of Commerce, Washington, D.C
Mr. Chandrakant Salunkhe
Dr. Sye-Kyun Chung -
Mr. Ki-Hwa Hong -
- President, SME
Chamber of India with
Hon’ble Minister of Commerce, Industry & Energy,
Republic of Korea and
President & CEO Korea Trade - Investment
Promotion Agency.
Mr. Chandrakant Salunkhe
Mr. Kür ad Tüzmen
Mr. R zanur MERAL
, Mr. MURAT YALÇINTA
- President, SME
Chamber of India with (L to R)
- Hon’ble Minister of State of Turkey for Foreign
Trade, - President,
Confederation of Businessmen & Industrialists of
Türkiye (TUSKON) -
President, Istanbul Chamber of Commerce.
ş
ı
Ş
Mr. Chandrakant Salunkhe
Mr.
- President,
with
SME
Chamber of India -
Hon’ble Minister of Commerce & Industry, Papua
New Guinea and - Deputy
Secretary, Department of Commerce & Industry,
Papua New Guinea
Gabriel L. Kapris
Mr. John Andrias
Mr. Chandrakant Salunkhe
Mr. Mandisi Bongani
Mabuto Mpahlwa
- President, SME
Chamber of India with
- Hon’ble Minister of Trade &
Industry, South Africa
Mr. Chandrakant Salunkhe - President,
with
SME
Chamber of India H. H. Shaikh Saud Bin Saqr
Al Qasimi - The Crown Prince and Deputy Ruler of
Ras Al Khaimah, UAE
Mr. Chandrakant Salunkhe with H. E. Mr. Frank
Heemskerk
Mr. Lodewijk Asscher
- Hon’ble Minister for Foreign Trade,
Netherlands and - Vice
Mayor, City of Amsterdam
Mr. Chandrakant Salunkhe
H. E. Mr. Ivailo Kalfin
- President, SME
Chamber of India with -
Deputy Prime Minister and Minister of Foreign
Affairs of Republic of Bulgaria
Mr. Chandrakant Salunkhe
Mr. Kemal UNAKITAN
Mr.
Richard Ensor
- President, SME
Chamber of India with -
Hon’ble Minister for Finance, Turkey and
- MD, Euromoney Conferences
Mr. Chandrakant Salunkhe - President, SME
Chamber of India with Ms. Seri Rafidah Aziz -
Hon'ble Minister for International Trade and
Industry, Malaysia