Mr. Monohar Bidaye
India is moving higher in the global landscape and establishing itself as the sixth largest economy with GDP of more than USD 2.6 trillion. The various structural reforms initiated by the Government of India have renewed the confidence of global investors which is driving foreign direct investments. Reforms in the area of Insolvency Code and GST will go long way to make India leading growth engine of the world economy. While insolvency code will help bankers and corporates to resolve mounting debt burden with huge NPA, GST will bring fiscal sustainability by reducing the cost of compliance with multiple state tax systems and expanding tax base by bringing unorganised sector activity into organised sector. However liquidity situation in the economy is yet to improve.
With all positive developments happening around us we are still saddened with legacy issues caused by geo-political situation in the Middle East and delay in finding solution to debt resolution of Zicom Group. As I had mentioned in my previous year’s speech, the business of the Parent Company got affected due to change in the policy of the Government caused by Make in India Initiative. As Parent Company is working under the constraint of NPA guidelines of RBI we are facing several restrictions on utilisation of proceeds of business. The need of hour is to quickly move to manufacturing activity to avail the benefits of lowtax rate. The distribution business of security equipment’s of Parent Company is moving into commodity zone. Entry of number of Chinese Companies in the Indian market has expedited this situation. Due to the intense competition and price conscious behaviour of channel partners the margins on the security equipment’s and products can now be compared with margins on other electronic hardware like laptop, computer, servers etc. We see strong case to relook at this business again and to see whether Zicom can venture into other related/unrelated business to bring glory back to the stakeholders. We will appraise the stakeholders on these new ideas from time to time. To resolve the debt situation we are discussing with the bankers to accept One Time Settlement of Debts to reflect its diminished enterprise value.
Zicom SaaS continue to maintain its position by holding value for the stakeholders. During the year under review, Zicom SaaS succeeded in renewingits major contracts with the customers. The Company succeded in registering marginal growth in its Enterprise and MYCS segments. During the year the Company has added couple of large clients to its portfolio which will help to drive the growth in future. On the technology side the Company has introduced street smart service to monitor the safety and performance of vehicles in India. The Company is undergoing trials with couple of large fleet operators to penetrate this service in Indian market. We are sure going forward, Zicom SaaS will offer various new services. As informed during our quarterly results, Zicom SaaS Lenders mainly bankers have entered into One Time Settlement (OTS) contracts with the Company. Although there was a delay in settlement, we are confident of making payment under OTS during the current financial year.
Phoenix International, Doha, Qatar, subsidiary of Zicom has stopped executing its projects due to severe economic crisis caused by embargo on Qatar initiated by UAE & Kingdom of SaudiArabia. Most of the projects in Qatar are standstill as there is no road connectivity due to geo-political situation.Almost 90% of the employees have been expatriated with settlements and the Company is working with local partners and bankers to bail out the Company.
Unisafe Fire Protection Specialists L.L.C., Dubai another large subsidiary of Zicom has also been impacted adversely due to non-revival of UAE economy since last 3 years. Unisafe has put in place all contingency plans to reduce its employee strength substantially and its infrastructure in small emirates.
To infuse resources in the Group for its revival, the management is working relentlessly with prospective investors to work out various model of investments which includes hiving off certain businesses.
Team Zicom is working passionately together in this difficult circumstances to keep the business and its value intact.
On behalf of the entire Zicom team, I’m sincerely thankful to all stakeholders and well-wishers for sticking with us through a challenging year. With your support, we are confident of scaling new heights in the coming years.