JANUARY 2011 CONNECT - SME Chamber of India · Planning Commission Govt. of India Inaugural Issue,...

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


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.


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


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,



Ms. Sangeeta ModiFounder, Access Asset Managers

Mr. V. K. VenkatachalamSecretary General (Public Relations),

SME Chamber of India

CO NNECT Inaugural Issue, January 201104

Dignitaries Blessed Our Activities

69

Address by

Mr. Montek Singh

AhluwaliaDy . Chairman,

Planning Commission

Govt. of India

Inaugural Issue, January 2011 05

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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.

Inaugural Issue, January 201106CO NNECT

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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


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


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,



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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


“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



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,

LAUNCHING OF CO NNECT

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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


“IF SMEs

DO NOT

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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.


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

Inaugural Issue, January 201120

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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.


CO NNECT


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. 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.


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



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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.


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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.


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


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



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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


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”



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


H.E. Mr. Paul A. Folmsbee

Roundtable Series-II “Empowering Indian SMEs - VISION

2020”. Mr. Madhu Kannan -


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.



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


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


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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


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


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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


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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)


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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



CO NNECT



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


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.


“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

CO NNECT


“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

.

Management Consultant in value

creation, Founder Chairman at

Valueveda and EX- Executive

Director at Hindustan Unilever Ltd


Ms. Devita SarafCEO, VU Technologies

and Zenith Computer Ltd.

Mr. Amit GroverFounder, Nurture Talent Academy

and Director, Mumbai Angels


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


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,


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


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


“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.


0120 - 2490000

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?

[email protected]

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


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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.


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



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”


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”


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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”


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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 ”


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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


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


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


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”



“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


Delegates at the Conclave


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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


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. Dinsha J. Patel


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


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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. 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”.


Mr. Montek Singh Ahluwalia – Deputy Chairman, Planning

Commission, Government of India addressing the delegates

CO NNECT

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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.


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



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”


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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


CO NNECT


Delegates at the Award presentation function

Mr. Mahesh Maheshwari - Director, Nimbark Fashions Ltd.


Mr. Vishnu Varshney - Managing Director, GVFL Limited.

Appreciation Award for Supporting SMEs

Mrs. Thripti Kalra - Director, Kalra Overseas Pvt. Ltd.


Mr. Vasant Phadtare - MD, Kavitsu Transmissions Pvt. Ltd.


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


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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. 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


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SConclave on

Empowering Indian SMEs for 2020Opportunities and Challenges23rd August 2008 | Hotel Grand Hyatt, Mumbai


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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-

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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



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


6 International Conference onth

-

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


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.



“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


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. 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. 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


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,



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


Mr. Chandrakant Salunkhe - President, SME

Chamber of India with Mr. John Howard - Hon'ble

Prime Minister of Australia


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.


with

SME

Chamber of India

Hon’ble Minister of Industry and

Commerce, Bahrain.

Mr. HASAN Bin Abdallah

Al-Fakhru -


Chamber of India with Dr. Navinchandra

RAMGOOLAM - Hon’ble Prime Minister

Mauritius


Mr. Kamalnath

President, SME

Chamber of India with - Hon'ble

Minister of Commerce and Industry, Government

of India.


Mr. Vilasrao Deshmukh

President, SME

Chamber of India with -

Hon’ble Chief Minister of Maharashtra


Mr. Narayan Murthy

President, SME


Chairman & CEO, Infosys


Chamber of India presenting a memento to Dr.

Sali Ram Berisha - Hon’ble Prime Minister of

Republic of Albania

INTERACTION WITH DIGNITARIES



H

- President, SME

Chamber of India with . E. Mr. Rama Krishna

SITHANEN - Hon’ble Deputy Prime Minister of

Mauritius


Y.A.B. Tan Sri Dr. Koh Tsu

Koon

- President,

with

- Chief Minister of Penang, Malaysia

SME

Chamber of India


Chamber of India with Mr. Franklin L. Lavin -

Under Secretary for International Trade, U.S

Department of Commerce, Washington, D.C


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. 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.

- 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. Mandisi Bongani

Mabuto Mpahlwa

- President, SME

Chamber of India with

- Hon’ble Minister of Trade &

Industry, South Africa


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


H. E. Mr. Ivailo Kalfin

- President, SME


Deputy Prime Minister and Minister of Foreign

Affairs of Republic of Bulgaria


Mr. Kemal UNAKITAN

Mr.

Richard Ensor

- President, SME


Hon’ble Minister for Finance, Turkey and

- MD, Euromoney Conferences


Chamber of India with Ms. Seri Rafidah Aziz -

Hon'ble Minister for International Trade and

Industry, Malaysia

INTERACTION WITH OVERSEAS DIGNITARIES


JANUARY 2011 CONNECT - SME Chamber of India · Planning Commission Govt. of India Inaugural Issue,...

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Transcript of JANUARY 2011 CONNECT - SME Chamber of India · Planning Commission Govt. of India Inaugural Issue,...