KSFCar0708-e 943264013

OPERATIONS AT A GLANCE
Amount (Rs. in crore)
Particulars
2005-06
2006-07
2007-08
Since inception up to 31.03.2008 -......
Paid up capital at the year end Gross Sanctions: a. Number b. Amount Assistance to SSIs a. Number b. Amount Disbursements Loans outstanding Recoveries Percentage of NPA Income Expenditure Operating Profit
97.84
97.84
97.84
1,161 316.20
1,326 424.53
1,195 368.15
1,59,225 8,536.53
788 165.00 199.86 1,342.28 555.06 46 210.16 204.50 8.56
875 178.53 310.39 1,320.71 502.74 33 195.71 182.31 17.32
795 173.05 303.13 1,264.58 561.14 24 265.21 201.92 31.66
1,03,595 4,459.42 6,829.53 -..... -..... -..... -..... -..... -..
BOARD OF KSFC
Directors on the Board of KSFC :
Sl. No.
1
Period Name
Sri. N. Gokulram, I.A.S., Chairman Sri. V. Umesh, I.A.S., Chairman & Managing Director Sri. M.R. Sreenivasa Murthy, I.A.S., Chairman Dr. Raj Kumar Khatri, I.A.S., Smt. Bhama Krishnamurthy Sri. V. Madhavan Nair, I.A.S. (Retd.) Sri. Ramesh G. Dharmaji Sri. H. Suresh Prabhu Sri. P.K. Gupta Sri. S.R. Hanchinamani Sri. S. Nagaraju Sri. G.S. Doreswamaiah Sri. Nataraj V. Angadi Sri. S. Ananthan Sri. H.V.S. Krishna Sri. V. Umesh, Sri. V. Umesh,
I.A.S., I.A.S.,
From
21.12.2005 09.04.2007 24.01.2008 16.08.2006 10.02.2006 06.06.2008 17.05.2006 11.10.2006 05.07.2004 31.05.2007 15.05.2006 11.11.2006 27.03.2007 26.11.2005 19.09.2007
To
08.04.2007 23.01.2008
U/s of SFCs Act

10(a)
2 3 4 5 6 7 8 9 10 11
10(b) 05.06.2008 10(c) 10(c) 10(d) 30.05.2007 10(d) 10(e) 10(e) 10(e) 18.09.2007 08.04.2007 03.02.2008 11.06.2008 14.07.2008 10(e) 10(f)
Managaing Director Managaing Director

I.A.S.,
23.06.2006 24.01.2008 04.02.2008 12.06.2008 14.07.2008
Sri. Tapan Senapati, Sri. D.N. Nayak,

I.A.S.,
Managaing Director Managing Director
Managaing Director
I.A.S.,
Sri. Kaushik Mukherjee,
EXECUTIVE COMMITTEE
Members of the Executive Committee :
Sl. No Period Name From To 03.02.2008 11.06.2008 14.07.2008 18(1) Sri. V. Umesh,
I.A.S.,
U/s of SFCs Act
01
0
23.06.2006 04.02.2008 12.06.2008 14.07.2008 16.08.2006 17.05.2006 16.10.2006 06.10.2006 17.12.2005 12.06.2007 26.11.2005
I/C
Sri. Tapan Senapati, I.A.S., Sri. D.N. Nayak, I.A.S., Sri. Kaushik Mukherjee,
I.A.S.,
02 3 4 0 5 0 6 0 7 0 8
Dr. Raj Kumar Khatri, Sri. H. Suresh Prabhu Sri. S. Nagaraju
I.A.S.,
Sri. Ramesh G. Dharmaji
Sri. G.S. Doreswamaiah Sri. Nataraj V. Angadi Sri. S. Ananthan Executive Directors General Managers
I/C
18.09.2007 Legal Advisor Sri. B. Rudra Gowda Auditors M/s. K.V. Narasimhan & Co., Chartered Accountants
Dr. S.S. Chandrashekar Sri. N.R. Sridhar
Sri. R.D. Kattimani Sri. N. Aswatharam Sri. B.H. Srinivasa Murthy Sri. G. Nagaraja Sri. L.B. Nilogal
KARNATAKA STATE FINANCIAL CORPORATION

DIRECTORS REPORT 2007-08
The Directors of the Corporation have great pleasure in presenting the 49 annual report on the operations of the Corporation together with the audited statement of accounts for the year ended March 31, 2008.
th
production is attributed to favourable weather conditions, good rainfall with record output of major crops including wheat, rice, coarse cereals, pulses and oilseeds. The industrial production, as measured by the Index of
The year 2007-08 was a challenging year for the Corporation in terms of resource mobilization and re-capitalization and the Corporation through its innovative strategies tackled these issues. The Corporation made a commendable performance in the area of sustained growth in its profitability with a post tax profit of Rs.62.17 crore. Strengthening of recovery machinery helped the Corporation improve the quality of loan assets and reduce NPAs. A brief stock of the economic scenario of the country and the State of Karnataka is taken before going into the performance highlights of the Corporation. INDIAN ECONOMIC SCENARIO: During 2007-08, the Indian economy continued to expand at a good pace although there was some moderation in the growth momentum during the course of the year. As per the Central Statistical Organizations revised estimates, the Indian economy grew by 9 per cent. This growth rate in GDP in 2007-08 follows the all-time high growth of 9.6 per cent in 2006-07 and 9.4 per cent in 2005-06. This growth has meant a significant rise in the per capita income, which has grown from Rs.11,672 in 2003-04 to Rs. 24,321 in 2007-08.
Industrial Production (IIP) grew at 3 per cent in March 2008 compared to a robust 14.4 per cent growth in March 2007. As a result, the industrial production growth for the entire fiscal slipped to 8.1 per cent in 2007-08 from 11.6 per cent in 2006-07. However, owing to the comparatively healthy performance during the prior 11 months, the overall growth for the full year remained at over 8 percent. The industrial slowdown is largely because of the sharp drop in the growth of the manufacturing sector to 8.8 per cent from 12.5 per cent last fiscal. High inflation rate, spiraling crude oil and commodity prices adversely impacted the manufacturing sector. The services sector continued to be the major contributor to GDP growth and maintained its double-digit growth at 10.6 per cent during 2007-08 compared to 11.2 per cent in the previous year. During 2007-08 fiscal, the overall growth of infrastructure industries (crude petroleum, cement, electricity, coal, petroleum refinery products and finished steel) decelerated to 5.6 per cent as against 8.7 per cent in the previous year. Rising prices of industrial fuel and food products
After a modest growth in crop output for several years, the Indian agriculture is reckoned to have rebound in 2007-08 with the foodgrain production surging by 10 million tonnes or 4.6 per cent to touch a new high of 227.32 million tonnes. The grain output in 2006-07 was 217.28 million tonnes. The increased agricultural
contributed heavily in pushing up inflation. Inflation based on wholesale price index touched 7.4 per cent at the end of March 2008 as compared to 5.9 per cent an year ago. On the external front, the value of countrys exports for the fiscal year 2007-08 amounted to $155.5 billion and
the value of imports stood at $235.9 billion. With cumulative high export growth at 23 per cent and a higher import growth of 27 per cent, the countrys trade deficit stood at $ 80 billion. India received $24.57 billion foreign direct investments in 2007-08 and the sectors that attracted maximum FDI inflows include services, telecom, construction activities, computer software and hardware. KARNATAKAS ECONOMY: Karnataka is one of the top five industrialized states in the country. The overall real growth in GSDP in Karnataka for FY 08 is anticipated to be around 7 per cent. The year 2007-08 is the first year of the 11th plan period.
exploitation of the emerging growth opportunities, repositioning its business portfolio keeping the entrepreneurs needs in focus, strengthening of its fee - based activities, reducing NPA and broadbasing the resource mobilization. MAJOR INITIATIVES OF GOVT.OF KARNATAKA: The Govt. of Karnataka under its Special One-Time Settlement scheme to help small borrowers of KSFC to come out of debt trap extended a monetary support of Rs.68 crores during the year 2007-08. The Government has also assured a support of Rs.86 crores for settlement of NPAs of small borrowers of KSFC for the year 2008-09. The Government infused equity of Rs.150 crores for improving the networth of the Corporation. The Government also intervened in resolving the refinance facilities, which was temporarily held up on account of regulatory requirements. A long-term restructuring plan was put in place to address issues relating to NPA reduction, improving networth and financial restructuring. CORPORATE GOVERNANCE:
COMMITTEE APPROACH
The growth in Karnatakas GDP in agriculture is anticipated to be 4.4 per cent as against the all India revised estimates of 4.5 per cent. In industry and services sectors, the growth anticipated is 5 per cent and 8.7 per cent as against the all India growth rates of 8.1 per cent and 10.6 per cent respectively. Services sector continues to drive the economy in the State contributing 55.72 per cent to GSDP as compared to 25.16 per cent by the secondary sector and 19.13 per cent by the primary sector. The GSDP in real terms is likely to reach Rs.2,15,282.00 crore and the per capita GSDP in real terms, is likely to reach Rs. 39,576 in 2007-08 as against Rs. 25,085 in 2006-07. In 2007-08, the State Level Single Window Clearance Committee approved 728 projects with an investment of Rs.10,309.92 crore and the State High Level Clearance Committee has approved 108 projects with an investment of Rs.1,60,522.82 crore. 14,984 SSIs are registered during the year under review, involving an investment of Rs.1,126.56 crore and is expected to generate employment to 1,23,399 persons. Against this background, KSFC responded effectively to the growing and varied requirements of the industrial and services sectors in Karnataka. The Corporations effor ts during 2007-08 were directed towards
The committee approach for decision making was continued ensuring efficiency and transparency in working systems. Various committees set up for project clearance, sanction, disbursement and recovery of loans functioned well during the year. The Project Clearance Committee comprising of Senior Executives of the Corporation and chaired by the Managing Director met 19 times and cleared 122 proposals during the year under review. One Time Settlement proposals were screened in an open and transparent environment through committee approach. During the year 2007-08, 347 proposals of branch offices cases were screened of which 165 cases cleared and 135 proposals of head office cases were screened of which 63 proposals were cleared recommending suitable settlement packages.
The Sale Negotiation Committee constituted to dispose off the secured assets taken over by the Corporation, met 17 times in respect of head office cases. Offers received for 137 units were deliberated and sale was approved in respect of 41 cases. Similarly, offers received for 71 units in respect of branch offices cases were negotiated and sale was approved in respect of 23 units by Sec.29 Cell positioned at head office.
- AUDIT COMMITTEE
- CREDIT RISK ANALYSIS MODELS
In order to improve the quality of in-house credit appraisal and mitigate credit risks, the Corporation on a study of various credit risk models of financial institutions/banks introduced Credit Risk Analysis Models. These models analyse risks involved in lending, such as financial risks, business risks, management risks, legal risks etc., and give clear perception about the project being financed. The model is under validation and a validated computer based model will be put in place in FY 09.
- ISO CERTIFICATION
The Corporation has a full-fledged Audit Committee consisting of 5 directors of the Board of the Corporation as members. The Audit Committee reviewed the performance of the internal audit department from time to time. The Committee met 4 times during the year and reviewed the internal auditing of the operations of the Corporation. The committee also approved the audit plan for FY 08 and also put in place guidelines for effective internal auditing. The Committee also discussed cases pertaining to 109th report of the COPU and on its advice the report was submitted to the government after seeking the Boards approval.
- MANAGEMENT OF NPAs
The Corporation obtained the ISO 9001:2000 renewed license during the year. M/s Bureau of Indian Standards renewed the certification for a further period of three years up to May 2010. Twelve Quality Internal Audits and six Management Review meetings as per the revised standards of ISO 9001:2000 were conducted during the year under review. All documents are updated, necessary revisions made in the Quality System Procedures with continual improvements in all the areas. The Quality System Procedures of new departments viz., Financial Services, Section-29 Cell and Infrastructure Development departments have been included in the Quality Manual QM-03. BIS auditors conducted Renewal and Surveillance audits during the year. Steps were initiated to conduct ISO awareness and Internal Audit Training programmes for a fresh batch of officers.
- COMPUTERISATION
One of the important functions of the recovery is managing the Non Performing Assets (NPAs). Appropriate and timely action is of utmost importance in tackling NPAs. The Corporation has introduced performance benchmarks for various areas in recovery, which include Quarter-wise and Element-wise recovery targets, Asset-wise collections, collection by sale of units, settlement through OTS etc. In addition to this, information on cases which are likely to slip from present asset status to a lower grade are generated every month and reviewed on a continuous basis in order to avoid any asset slipping further down. Similarly, information on cases where the asset status has already slipped are obtained every month and reviewed on a continuous basis to improve the asset portfolio by upgrading the status wherever possible by taking necessary follow-up steps. With stringent monitoring processes, the Corporation was able to not only bring down the NPA level but also arrest slippage of assets and improve recovery.
Steps were taken during the year for upgradation of IT infrastructure in the three major areas viz., hardware, software and networking, in-house. The entire upgradation project is expected to be completed in the next financial year. BOARD AND EXECUTIVE COMMITTEE MEETINGS: During the year, 14 meetings of the Board of Directors and 15 meetings of the Executive Committee were held. SANCTIONS: Sanctions during the year under various schemes touched Rs.368.15 crore covering 1,195 cases as
against Rs.424.53 crore covering 1,326 cases during 2006-07. Cumulative sanctions reached Rs. 8,536.53 crore covering 1,59,225 cases as on 31.03.2008.
in value of output of Rs.1,551.63 crore and generate employment to 7,430 persons. INDUSTRYWISE SANCTIONS:
FLOW OF ASSISTANCE: a) Assistance to small-scale enterprises: During the year, the Corporation sanctioned an amount of Rs.173.05 crore to 795 small-scale industries. Cumulative assistance to small-scale industrties at the end of March 2008 stood at Rs. 4,459.42 crore to 1,03,595 cases. b) Assistance to medium-scale enterprises: During the year, the Corporation extended financial assistance to 4 medium scale units amounting to Rs.14.65 crore. Cumulative assistance to this sector stood at Rs.830.13 crore to 1,642 cases. c) Assistance to transport: During the year, the Corporation extended financial assistance to 29 cases amounting to Rs.2.05 crore. The cumulative assistance to this sector stood at Rs.730.60 crore to 40,334 cases. d) Assistance to other sectors: Assistance to other sectors excluding SSIs, MSIs and Transport amounted to Rs.178.40 crore to 367 cases during the year. Cumulative assistance to other sectors stood at Rs.1,808.82 crore to 10,680 cases.
Sl.
(Rs. in crore) Sl. No. 01 2 3 4 005 6 7 8 09 Industry Hotel / Restaurants Food Non-metallic products Engineering Miscellaneous mfg. Printing & Publishing Industrial Estate Chemicals Textiles & Readymade Garments Transport/Tpt. Equipment Others TOTAL SIZEWISE SANCTIONS: (Rs. in crore)
% to the total Sanctions Up to Rs.10.00 lakhs Above Rs.10.00 lakhs to Rs.45.00 lakhs Above Rs.45.00 lakhs to Rs.150.00 lakhs Above Rs.150.00 lakhs to Rs.300.00 lakhs Above Rs.300.00 lakhs to Rs. 500.00 lakhs Above Rs.500.00 lakhs TOTAL No. 202 Amt. 15.32 No. 16.90 Amt. 4.16 No. 1 2
Amount 161.54 59.07 31.84 27.27 21.55 18.42 8.82 8.20
% to the total 43.88 16.04 8.65 7.41 5.85 5.00 2.40 2.23
7.37 6.45 17.62 368.15
2.00 1.75 4.79 100
10 11
HEAD OFFICE AND BRANCH OFFICE SANCTIONS: During the year, loan sanctioned by the head office amounted to Rs.133.77 crore to 57 cases compared to the previous years sanctions of Rs.184.57 crore to 73 cases. Loans sanctioned by the branch offices amounted to Rs.234.38 crore to 1,138 cases compared to Rs.239.96 crore to 1,253 cases in the previous year. INVESTMENT, VALUE OF OUTPUT AND EMPLOYMENT: The investment catalysed by the Corporation in 2007-08 is expected to be Rs.2,552.91 crore resulting
660
119.29
55.23
32.40
284
109.43
23.77
29.72
29
32.86
2.43
8.93
8 12 1,195
23.55 67.70 368.15
0.67 1.00 100.00
6.40 18.39 100.00
10
HIRE PURCHASE & FINANCIAL SERVICES: The Corporation opened 11 Nos. of Foreign Letters of Credit on behalf of the assisted units to the extent of Rs.10.06 crore. The income earned out of this activity is Rs.7.43 lakh during the year under review. DISBURSEMENTS: Disbursements made during the year 2007-08 touched Rs.303.13 crore as against Rs.310.39 crore disbursed during the year 2006-07. Cumulative disbursements reached Rs.6,829.53 crore as on 31.03.2008. RECOVERY: The total recovery during the year stood at Rs. 561.14 crore as compared to Rs.502.74 crore made in the previous year. Recovery in respect of loans was Rs.542.24 crore, Rs.0.30 crore in respect of hire purchase, Rs.1.80 crore in respect of leasing and Rs.16.80 crore in respect of financial services.
The Corporation was able to keep up the tempo of recovery on account of systematic and concerted efforts put in, special emphasis laid on tackling chronic and major default cases, review of cases at regular intervals and series of consortium meetings held with the loanee units to sort out various problems. CASES UNDER SECTION 29 OF SFCs ACT: The Corporation had in its custody assets of 2,102 default units at the beginning of the financial year. During the year under review, assets of 163 units involving arrears of Rs. 269.10 crore were added. Assets of 709 units were returned / released / sold during the year. Assets of 343 units were transferred to DC/ DC transit. As at the end of March 2008, assets of 1,213 units involving arrears of Rs. 960.66 crore remained in the custody of the Corporation. Out of these, 1,058 are industrial units involving arrears of Rs. 925.95 crore and 155 transport cases involving arrears of Rs. 34.71 crore.
Status of Repayment as on 31.03.2008

(Term Loans only) (Rs. In lakhs) PARTICULARS Arrears at the beginning of the year Add : Demands during the year 2007-2008 Less : Rescheduling, funding & status change in the account Recoverable Amount Less : Recoveries a) Against Arrears b) Against Current Total Recovery Overdues as on 31.03.2008 01. Loan outstanding 02. % of overdues to loan outstanding 03. % of collected to collectable 04. % of current principal recovery to principal demand 05. % of current interest recovery to interest demand B: (A-B) 15,607.31 13,433,96 29,041.27 6,090.54 6,017.33 6,132.84 12,150.17 32,578.03 21,624.64 19,566.80 41,191.44 38,668.57 1,23,162.16 31.40 51.58 50.89 74.94 A: PRINCIPAL 10,187.56 26,394.29 1,450.04 35,131.81 INTEREST 41,962.97 8,183.44 5418.21 44,728.20 TOTAL 52,150.53 34,577.73 6,868.25 79,860.01
NOTE: Amount outstanding and amount recoverable in respect of statutory notice issued cases, cases taken over under Sec. 29 of the SFCs Act, DC referred cases, Suit filed cases, PG invoked cases and BIFR cases are not included in the above statement.
11
KPM(R) CASES: During the year,
12
certificates
to
Deputy
the co-operation of the SIDBI, refinance was restored in February 2008. The state government also routed Rs.150 crore of its investment in Karnataka Neeravari Nigama Ltd., (Rs.120 crore) and Cauvery Neeravari Nigama Ltd., (Rs.30 crore) through the Corporation so as to broad base the equity of the Corporation. During the year, the investment of Industrial Development Bank of India in the Corporation as Equity Share Capital and Loan in Lieu of Capital, amounting to Rs.29.20 crore and Rs.9.17 crore respectively, were transferred in the name of Small Industries Development Bank of India. After restoration of refinance facility, the Corporation availed refinance of Rs. 106.00 crore, while repayment to SIDBI during the year was Rs.124.74 crore. The LoC outstanding of SIDBI which was at Rs. 875.68 crore as on 31.3.2007 came down to Rs. 856.94 crore by 31.3.2008. The interest cost on account of LoC also came down from Rs.76.56 crore for the year 2006-07 to Rs.72.70 crore for the year 2007-08. The Corporation availed a rebate of Rs.1.06 crore from SIDBI for prompt payment of principal and interest installments. The Corporation redeemed the bonds worth Rs. 66.40 crore during the year, thereby the outstanding of the bonds reduced from Rs.640.10 crore as on 31.3.2007 to Rs.573.71 crore as on 31.3.2008. The interest cost on bonds was marginally more at Rs.57.96 crore for the year 2007-08 compared to Rs.57.44 crore in 2006-07. The government guaranteed liability stood at Rs. 454.64 crore, comprising of Rs.454.27 crore on account of bonds and Rs.0.37 crore on account of fixed deposits. The Corporation remitted a sum of Rs.0.41 crore to the State treasury as guarantee commission. The total long-term liability of the Corporation which was at Rs.1571.30 crore at the beginning of the year, came down to Rs.1480.42 crore (excluding the subsidy
Commissioners were issued for recovery of Rs. 5.60 crore. 1,655 units have been referred to DC for recovery of dues as at the end of March 2008. RESCHEDULING: Review of all default portfolio was made on a case to case basis and appropriate strategies adopted. During the year, the Corporation rescheduled the repayment of loan in respect of 222 units amounting to Rs.10.34 crore as against 398 units rescheduled amounting to Rs.16.38 crore during the previous year. FINANCIAL RESULTS: During the year under review, the Corporation generated a gross revenue of Rs.265.21 crore on cash basis as against Rs.195.71 crore in 2006-07, an increase by 35.51%. Working of the Corporation for the year resulted in an operating profit of Rs.31.66 crore as against Rs.17.32 crore in 2006-07, an increase of 82.70%. The net profit for the Corporation stood at Rs.62.17 crore compared to Rs.12.95 crore for the previous year. This increase in the net profit is a result of the support extended by the GoK towards settlement of NPAs in respect of small loans up to Rs.10 lakhs as also the concerted efforts of the Corporation. These measures resulted in higher interest recoveries and write back of NPA provision of Rs.55.29 crore. Apart from this, revenues were also augmented by the new fee-based activities introduced during the year. TREASURY ACTIVITY: The financial year 2007-08 was an year of challenge for the Corporation in terms of resource mobilization and the need for re-capitalization. The decision of the SIDBI in June 2007 to stop refinance to the Corporation because of the regulatory requirements of the Reserve Bank of India on the networth of the Corporation severely stressed the cash flows of the Corporation during the year. However, with the timely intervention of the Govt. of India, the Govt. of Karnataka, RBI and with
12
SHAREHOLDINGS
Composition of the shareholdings of the Corporation
(Rs. in Lakhs) Sl. No. 1 Particulars State Government : Under Section 4(3) (a) Under Section 4(5) Special Capital issued under section 4A 2 Small Industries Development Bank of India : Under Section 4(3)(a) Special capital issued under Section 4A 3 Insurance companies, investment Trusts, Other financial institutions under section 4(3)(c) 4 5 Public sector banks under section 4(3)(c) Other parties under section 4(3)(d) Total 16,090 7,900 2,475 97,84,545 16.09 7.90 2.48 9,784.54 22,92,692 6,27,500 2,292.69 627.50 51,73,000 5,37,388 11,27,500 5,173.00 537.38 1,127.50 No. of shares
Amount
bonds issued on behalf of the GoK) by the year end. The total interest and financial expenses reduced from Rs.141.11 crore for the year 2006-07 to Rs.136.34 crore for the year 2007-08. ASSET RECONSTRUCTION: The objective of the Asset Reconstruction department at head office is primarily to tackle the cases pooled after they are subjected to regular recovery process. These cases are addressed to bring down the NPA level by initiating second line of recovery action in the form of disposing the assets of the unit, filing miscellaneous petition against the guarantors to obtain decree, enforce the decree and bring attachment of the assets/proper ty and identification of personal
properties of the guarantors and bring them too for attachment through court. The Corporation has made progress in realising its objective of bringing the chronic default cases to a logical end inspite of several bottlenecks. During the year under review, a total amount of Rs. 1096.16 lakhs was recovered from the chronic default cases comprising Principal amount of Rs.641.00 lakhs and Interest of Rs.404.27 lakhs. Assets of 14 units were brought for sale involving a sale amount of Rs.507.00 lakhs of which an initial amount of Rs.256 lakhs is realised. The recovery from MR portfolio was Rs.131.17 lakhs which also contributed to the income of the Corporation.
13
REHABILITATION OF SICK UNITS: The Sick Unit Monitoring Department is created for nursing of viable sick industries. The cumulative assistance as on 31.3.2008 since inception, under rehabilitation scheme (RSR) stood at Rs. 91.64 crores. The coverage of units under RSR scheme has reduced in recent years with the introduction of Debt Reconstruction Scheme (DRS) as most of the sick units opt for reliefs/concessions extended under DRS compared to RSR. Under the scheme, reliefs/ concessions such as reduction of interest in respect of cases carrying high rate of interest, rescheduling of principal dues and waiver of penal/compound interest to borrowers who cleared the interest dues on simple interest basis are extended. SPECIAL ONE TIME SETTLEMENT SCHEME OF GOK FOR SMALL AND TINY BORROWERS OF KSFC: With the advent of the era of liberalisation and economic reforms of Govt. of India, the SME sector, particularly, small scale units took the brunt of the economic challenges resulting in many of them going sick. Therefore, as a pro-active measure, the Corporation over the years has extended various reliefs and concessions to many SMEs in the form of one-time settlements. Small accounts still exist that need rehabilitation / honourable exit from their debt trap. To rescue these units from the debt trap, the Govt. of Karnataka came up with a special OTS scheme during 2007-08 for small and tiny KSFCs borrowers of loans up to Rs.10 lakhs. For this purpose, the state government extended budgetary support of Rs. 68 crores for the year 2007-08. Loans where the disbursed amount is Rs.10 lakhs and below and the account is NPA as on 1.4.2006 are eligible to be covered under the scheme. Under this scheme, the Corporation was able to settle nearly 6,000 loan accounts. This contributed substantially to the reduction of NPA level. OTHER FINANCIAL SERVICE ACTIVITIES: Strategic alliances entered into with different organisations- UTI, LIC of India, IFFCO-Tokio and IL&FS directed towards fee-based activities to augment income generation have started yielding results.
- UTI Mutual fund products The Corporation has tied up with UTI for marketing of its mutual fund products. As a result of concerted efforts, the Corporation mobilised an impressive business of Rs.79.32 crore during the year against a target of Rs.12.75 crore and earned a commission of Rs.31.65 lakhs. - Insurance business The Corporation has a strategic tie up with IFFCO-Tokio and LIC of India for marketing of their general and life insurance products respectively. During the year, the Corporation got corporate agency license from Insurance Regulatory and Development Authority (IRDA) for marketing of life insurance products. Insurance training was imparted to selected staff and the Corporation mobilised a premium collection of Rs.1.03 crore during the year under review. Similarly, the Corporation made progress in its general insurance business and collected a premium of Rs.2.29 crore and commission of Rs.27 lakhs. - Monitoring of IPOs The Corporation is a recognised financial institution of SEBI for acting as Monitoring Agency for Public Issues exceeding Rs.500 crore. During the year, the Corporation took up the issue monitoring assignments of two more companies apart from the existing three companies and earned a revenue of Rs.21.00 lakhs under this activity. - Consulting Services The Corporation entered into an MoU with HDMC for providing technical valuation and certification of the works done by the contractors of HDMC. The Corporation executed the assignments provided by HDMC in this regard and is hopeful of getting similar assignments from BBMP, MMP etc. - SPV with IL&FS During the previous year the Corporation launched a Special Purpose Vehicle with IL&FS for taking up services such as project evaluation, business model validation and similar customer centric financial
14
services. During the year, the Corporation completed the registration of the company with registrar of companies in the name of M/s Karnataka enterprises Solutions Ltd (K-eSol Ltd). INFRASTRUCTURE DEVELOPMENT ACTIVITY: Infrastructure is an integral part of the services sector and plays a crucial role in the industrial development. With rapid growth of the economy in recent years, the importance and urgency of infrastructure development has increased. Recognizing this, the Corporation has taken up infrastructure development projects with public/private participation. The Corporation has been initially focussing on identifying valuable lands in the prime localities in and around Bangalore city owned by various government departments/ governmental agencies/registered societies/trusts etc., exploring suitable infrastructure development on joint venture basis. In respect of such joint venture projects, the Corporation takes care of all the financial tie-ups for development of these properties. The expected income out of different revenue models will be shared with the owners of the properties in appropriate ratio on mutually agreeable terms after studying economics/viability. The proposed joint venture projects will be of world class and state-of-art- technology. It could be IT park, shopping mall, commercial complex, SEZ, etc., depending upon the location of the property and commercial potentiality of the place. This new activity will ensure sustained cash flow for the concerned owner of the property as well for KSFC by way of rentals and other earnings which will be mutually beneficial to both the institutions. A separate infrastructure development department created for this purpose is fully functional. The identified joint venture proposals are in various stages of processing. It is expected that the efforts will fructify into credible joint ventures for implementation during 2008-09.
The Corporation has been allotted 10 acres land in Harohalli industrial area and 25 acres of land in Mysore by the State Level Window Clearance Committee. It is proposed to develop IT/BT/SME parks in these lands. The concerned industrial areas are in various stages of acquisition/development by KIADB. The possession of these lands is likely to be given by KIADB during 2008-09. Further, there is also a move for development of Steel Park in about 200 acres land in Koppal district as a joint venture project with KIADB. The viability study of this proposal is in progress. MOFPI SCHEME : The Ministry of Food Processing Industries (MOFPI) has enlisted KSFC as one of the FIs for implementing the scheme of sanctioning grant/subsidy in the form of financial assistance to food processing industries. KSFC can now receive application for grant process and sanction the same through the e-portal. The corporation has received applications from 33 units across its BOs as of year '08, seeking MOFPI grant amounting to Rs.389.92 lakhs. After processing, the eligible amount of Rs.334.57 lakhs was sanctioned to 32 units. RTI ACT : The central government has brought into force the Right to Information Act during 2005. Accordingly the State Govt. has directed the Corporation to adopt the rules. In compliance, the Corporation has followed the said directions. As required render the Act, Public Information officers & Appellate Authorities have been appointed and a circular has been issued. All the relevant information required under the Act are made available on KSFC website. INTERNAL AUDIT: A full fledged Internal Audit Department came into being with internal audit cells at each of the zonal offices.
15
The department, during the year, conducted 3 types of audit viz., Concurrent audit for post sanctions and disbursement, Routine audit covering entire operations of the Corporation and Financial audit covering finance, accounts and administration etc. The department also conducted special audits/investigation work wherever required and placed the reports before the Audit Committee. PUBLIC GRIEVANCE CELL: Public grievances are promptly addressed and effective measures are envisaged for their speedy disposal at branch, zonal and head office levels. This apart, Public Grievance Redressal Committee is in place at head office for on the spot settlement of complaints/ grievances pertaining to both branch and head office issues. Over the last few years, there is substantial drop in the number of complaints received by the Public Grievance Cell as the operations of the Corporation are fine-tuned to be consistent with the transparency act of the state government. PERSONNEL AND ADMINISTRATION: The manpower strength of the Corporation stood at 1,230 at the end of March 2008 as against 1,266 at the end of March 2007. Seventy-eight employees/officers were deputed to external training programmes during the year. AUDITORS: M/s K.V. Narasimhan & Co., Chartered Accountants, Bangalore was re-appointed by the Reserve Bank of India as statutory auditor for 2007-08. AUDIT BY COMPTROLLER AND AUDITOR GENERAL OF INDIA: The audit of the affairs of the Corporation by Comptroller and Auditor General of India under sub-section (6) of Section 37 of the State Financial Corporations Act 1951 was completed for the year 2006-07. ACKNOWLEDGEMENTS: The Board of Directors wishes to place on record special thanks and gratitude to the Government of
Karnataka for all the support extended for the settlement of small loans, equity support and timely intervention for the restoration of refinance. The Board places on record its specific thanks to the Departments of Finance and Industries & Commerce, GoK for their continued support and guidance. The Board expresses its thanks to the Govt. of India, the Reserve Bank of India and the Small Industries Development Bank of India for their support. The Board also thanks the LIC of India, UTI-MF, IFFCO-Tokio and industry associations viz., KASSIA, AWAKE, BCIC & KCCI etc. The Board expresses its thanks to Commercial Banks, Apex Bank, Co-operative Banks, KSIIDC, KIADB, KSSIDC, KPTCL, and DICs for their co-operation. The Board acknowledges the valuable contribution rendered by Sri.V. Umesh, IAS during his tenure as the Chairman & Managing Director of the Corporation. The Board also places on record the contributions of Sri.Tapan Senapati, IAS and Sri D.N. Nayak, IAS during their tenures as Managing Directors of the Corporation and also the contributions made by the outgoing Directors Smt. Bhama Krishnamurthy, Sri. P.K. Gupta and Sri. S. Ananthan. The Board places on record its appreciation of the leadership, guidance and support to KSFC by Sri.M.R. Sreenivasa Murthy, IAS., Chairman, KSFC & Principal Secretary, Finance Department, Govt.of Karnataka. The Board takes this opportunity to thank the entrepreneurs for reposing faith in the Corporation, the shareholders for their unstinted support and the investors in the bond issues of the Corporation. Finally, the Board acknowledges the dedicated services and efforts put in by Sri. Kaushik Mukherjee, IAS, Managing Director and the officers and officials of the Corporation. By order of the Board Sd/MANAGING DIRECTOR
16
AUDITORS REPORT
To, The Shareholders, Karnataka State Financial Corporation, Bangalore. 1. We, the Statutory Auditors of Karnataka State Financial Corporation appointed under section 37 (1) of the State Financial Corporations Act, 1951 do hereby report upon the Balance sheet as at 31st March, 2008 and the Profit and Loss Account for the year ended on the date annexed thereto. These financial statements are the responsibility of the Corporations Management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. The Balance Sheet and the Profit and Loss Account have been prepared in accordance with schedule I and II of KSFC General Regulations and give the information as required to be given in terms of the provisions of KSFC General Regulations. 4. We invite attention to: a) (i) Note No.1 (g) (ii), Schedule P, regarding Rs.8600 Lakhs of commitment from the State Government towards simple interest in respect of Small loans availed by the borrowers upto Rs. 10 Lakhs which have become NPA as on 01.04.2006, and is considered as a credit towards provision required. (ii) (a) Note No.1 (15c) of Schedule-P regarding applicability of sales tax/VAT liability in respect of assets taken over and sold U/s.29 of the SFCs' Act. (ii) (b) Note No.15(d) of Schedule-P concerning the collection of contingency deposit of Rs.129.87 lakhs from lessees towards anticipated claims from the Commercial Tax department and payment of an adhoc amount of Rs.73.18 lakhs against the above transaction. The impact if any due to the above on the net profit for the year and on the current assets and liabilities is not ascertainable. b) Note No.6 (e) of Schedule-P regarding treatment of monetary value of accumulated leave at the credit of employees as contingent liabilities in contravention of the Accounting Standard 15-"Retirement Benefits" issued by the Institute of Chartered Accountants of India.
In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the significant Accounting policies and Notes forming part of the Accounts give the information required by the general regulations of KSFC in the manner so required and the said Balance Sheet is a full and fair Balance Sheet and exhibits a true and correct view of the state of affairs of the Corporation. For K.V. Narasimhan & Co. Chartered Accountants L.R. Venugopal Partner (M.No.20818)
Place : BANGALORE Date : 30.06.2008
17

BALANCE SHEET AS AT 31ST MARCH 2008
(Rs.in.lakhs)
Particulars
Schedule
As at 31-03-2008
As at 31-03-2007
CAPITAL AND LIABILITIES: Share Capital Loan Pending Conversion to Share Capital Reserve Fund and Other Reserves Term Borrowings Current Liabilities & Provisions A B C D E Total: PROPERTY AND ASSETS Cash & Bank Balances Investments Loans & Advances Fixed Assets Current Assets Profit and Loss Account Balance F G H I J 4995.99 15371.17 105734.63 6155.17 22937.62 53874.50 209069.08 4871.07 369.91 105790.61 748.21 14741.07 60091.24 186612.11 27467.55 917.69 5640.69 156142.19 18900.97 209069.08 12467.55 917.69 425.00 165230.10 7571.77 186612.11
Total: Notes & Significant Accounting Policies forming part of Accounts P
For Karnataka State Financial Corporation Sd/Vasant Kumar Dy. Gen.Manager (C) I/c Sd/Dr. S.S.Chandrashekar Executive Director (F) I/c Sd/D.N.Nayak, I.A.S. Managing Director Sd/M.R.Sreenivasa Murthy, I.A.S. Chairman
Directors 1. Ramesh G. Dharmaji 2. V. Madhavan Nair, I.A.S. (Retd.) 3. S. Nagaraju 4. G.S. Doreswamaiah 5. H.V.S. Krishna
As per our Report attached For K V Narasimhan & Co., Chartered Accountants Sd/(L.R.VENUGOPAL) Partner (M.No.20818) Place : Bangalore Date : 30.06.2008
Place : Bangalore Date : 28.06.2008
18

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2008
(Rs.in.lakhs)
Particulars
Schedule
Year Ended 31-03-2008
Year Ended 31-03-2007
INCOME Interest Income Other Income
K L Total:
18984.75 7536.72 26521.47
16721.70 2849.70 19571.40
EXPENDITURE Interest and Other Financial Expenses Personnel Expenses Administrative Expenses Bad Debts Written Off Provision towards Contingencies (Ref notes No 13 & 14) Depreciation
M N O E I Total:
13634.01 3383.73 808.97 413.39 1875.56 76.11 20191.77 6329.70 41.00 8.50 63.46 6216.74 0.00 0.00 -60091.24 -53874.50
14110.66 2856.76 827.89 355.81 0.00 80.72 18231.84 1339.56 44.19 0.00 0.00 1295.37 247.05 823.64 -60315.92 -60091.24
Profit Before Tax Less: Provision for Fringe Benefit Tax Less: Provision for Wealth Tax Less: Provision for Income Tax Prior Years Profit after Tax Less: Adjusted towards Dividend Deficit Account Less: Dividend payable to GOK Less: Brought forward Loss from Previous Year Deficit carried to Balance Sheet Notes & Significant Accounting Policies forming part of Accounts
For Karnataka State Financial Corporation Sd/Vasant Kumar Dy. Gen.Manager (C) I/c Sd/Dr. S.S.Chandrashekar Executive Director (F) I/c Sd/D.N.Nayak, I.A.S. Managing Director Sd/M.R.Sreenivasa Murthy, I.A.S. Chairman
19

(Rs.in.lakhs)
Schedule to the Accounts
As at 31-03-2008
As at 31-03-2007
Schedule -A SHARE CAPITAL Authorised Share Capital 5,00,00,000 shares of Rs. 100 each Issued and Paid up Capital 8029545 shares of Rs.100 each 1755000 shares of Rs. 100 each, issued under section 4 A of the SFCs Act 1951 Amount Received towards Shares Pending Allotment (Refer Note 12(a) of Schedule P) Total:
50000.00
50000.00
8029.55
8029.55
1755.00 17683.00
1755.00 2683.00
27467.55
12467.55
Schedule -B LOAN PENDING CONVERSION TO SHARE CAPITAL Loan pending conversion to share capital - IDBI/SIDBI Total: 917.69 917.69 917.69 917.69
Schedule-C RESERVE FUND AND OTHER RESERVES a) Special Reserve Fund u/s.35A of SFCs Act,1951 b) Special Reserve for the purposes of Sec.36(1)(vii) of the Income Tax Act1961 Revaluation Reserve on Fixed Assets (Refer note No.18 of Schedule P) Total: 250.00 175.00 250.00 175.00
c)
5215.69 5640.69
0.00 425.00
20
(Rs.in.lakhs)
As at 31-03-2008
As at 31-03-2007
Schedule-D TERM BORROWINGS 1. BONDS: a. Guaranteed by State Govt.under Sec.7(I) of the SFCs Act b. Yet to be guaranteed by State Govt. 2. Line of Credit from SIDBI 3. Fixed Deposits accepted u/s 8 of SFCs ACT, 1951 a. Guaranteed by GOK b. Other Deposits c. Unclaimed Interest on Matured Deposits 4. Term Loan from Lakshmi Vilas Bank Ltd., 5. Subsidy Bonds a. Subsidy Bonds - Series 2004 6. Towards VISHWA Programme from GOK Total:
45427.46 11943.50 57370.96 85694.04
52066.96 11943.50 64010.40 87568.26
36.96 2748.91 6.81
2792.68 2084.51
58.91 3079.54 6.81
3145.26 2161.12
8100.00 100.00 156142.19
8100.00 245.00 165230.10
21
(Rs.in.lakhs)
As at 31-03-2008
As at 31-03-2007
Schedule - E CURRENT LIABILITIES & PROVISIONS A) CURRENT LIABILITIES : 1. Unclaimed Dividends 2. Earnest Money Deposit 3. Sundry Deposits 4. Dividend Subvention from GOK 5. Other Liabilities 6. a. Amount received pending adjustments b. Amount received towards Subsidy c. Amount received towards Subsidy Bond Expenses d. Loan Application Fee Deposit e. From GOK towards OTS Int. Reimbursement 7. Margin Money Assistance a. Towards Rehabilitation of Sick units b. Towards Physically Handicapped c. Towards Agencies KSCSTDC/ KBCDC/KMDC/KWDC Less : Amount receivable from Parties d. Towards Seed Capital from SIDBI / IDBI Less : Amount receivable from Parties 8. Dividend payable to GOK B). PROVISIONS 1. Towards FBT 2. Towards Contingencies (Refer Note No.13 & 14 of Schedule P) 3. Towards Wealth Tax 4. Towards Income Tax (Ref. Note No.20 of Schedule P) Total: 948.24 936.70 5397.55 4957.50 11.54 440.05 823.64 1417.30 132.39 11.94 85.03 79.67 0.36 0.00 11940.92 1596.88 279.85 2074.08 132.62 17.96 82.98 0.00 0.36 5.00 2450.78 1596.88 281.05
1726.33 9.20 0.49
2307.64 9.20 0.50
971.64 958.11 0.00 0.00 13.53 0.00 823.64
124.19 1875.56 8.50 63.46 18900.97
83.19 0.00 0.00 0.00 7571.77
22

(Rs. in lakhs)
Schedule to the Accounts Schedule -F CASH AND BANK BALANCES a) Cash on hand b) Balance with Banks i) Reserve Bank of India ii) SBI & Other Scheduled Banks Less: Canara Bank Drawal facility balance Total: Schedule-G INVESTMENTS 1. Investments in Shares i) Shares acquired pursuant to underwriting agreements a) Irredeemable Preference Shares fully paid less: Provisions ii) Investment in Equity Shares less: Provisions 2. A. Investment in KITVEN FUND B. Investment in KAMCO & KATCO
i) 16500 Shares of Rs.100 each in KAMCO ii) 500 Shares of Rs.100 each in KATCO
As at 31-03-2008
As at 31-03-2007
72.02
183.17
1.73 5615.18 692.94 4922.24 4995.99 5032.57 641.40
296.73 4391.17 4871.07
16.28 16.28 223.04 119.89 251.00 16.50 0.50
0.00
16.28 16.28 223.04 107.65 237.50
0.00
103.15
115.39
17.00
268.00 0.02
17.00
254.50 0.02
C. Investment in NSCs 3. Application Money on Shares (Ref. note No.12 B of Schedule P) TOTAL:
15000.00 15371.17
0.00 369.91
23

(Rs. in lakhs)
Schedule to the Accounts Schedule-H LOANS AND ADVANCES 1. LOANS AND ADVANCES a) Term Loans and Advances b) Factoring Advances c) Debentures Subscribed d) Lease Finance e) Deferred Payment Guarantee f) Financial Guarantee TOTAL Less: Provision for NPAs 2. a) Stock on Hire Less: Unmatured Finance charges Hire Purchase Instalment due Less: Provision for NPAs As at 31-03-2008 As at 31-03-2007
120160.37 238.77 4537.88 23.89 604.75 466.22 126031.88 28397.25 0.00 0.00 427.39 427.39 97634.63
124874.69 231.28 5195.03 27.48 733.37 547.10 131608.95 33920.82 1.31 0.00 461.24 460.07 97688.13
0.00
1.31
b)
0.00 8100.00
1.17 8100.00 105790.61
3. Subsidy advance Total: Schedule - J CURRENT ASSETS Seed Capital Assistance Less: Seed Capital Assistance from SIDBI / IDBI Deposits with Banks Advances to Staff Less: Provisions Deposits and Other Advances. Less: Provisions Other Assets Less: Provisions Advances to suppliers Less: Provision for NPAs Assets acquired in satisfaction of loans Less: Provision for loss on sale of acquired assets Advance FBT Amount receivable from GOK : - a) towards subsidy bonds (Ref note no 14) - b) towards Guarantee Commission (Ref note no 13) Total: 2784.83 32.64 290.28 4.12 124.17 7.30 736.43 736.43 36.01 18.73
105734.63
0.00 0.00
0.00 17673.23 2752.19 286.16 116.87 0.00 17.28 121.25
6384.11 5397.55
986.56 9435.20 2933.87
308.80 21.76 15.14 7.29 736.43 736.43 37.45 18.73
287.04 7.85 0.00 18.72 83.19
988.64 982.00
1970.64 22937.62
988.64 0.00
988.64 14741.07
24
25
(Rs. in lakhs) Schedule to the Accounts Schedule K INTEREST INCOME Interest on Loans & Advances Interest on NCDs Interest on DPG Interest on Factoring Lease Rentals Less:Lease Equalisation Reserve Interest from Hire Purchase Total: Schedule - L OTHER INCOME Upfront Fee Sale of Application Forms Interest on Bank Deposits & Other investments Interest on staff advances Miscellaneous Income Profit on sale of acquired assets Premium on pre-mature closure of Accounts Other income from Leasing Other income from Merchant Banking Rent received Profit from Sale of fixed assets Bad Debts recovered Investigation Fee Provision for NPAs withdrawn Total: 179.43 0.00 179.43 37.85 18984.75 17956.45 767.28 33.07 10.67 24.75 0.00 24.75 37.07 16721.70 16014.35 543.27 53.93 48.33 Year Ended 31-03-2008 Year Ended 31-03-2007
147.00 1.77 336.01 95.73 416.44 4.68 56.42 1.01 92.36 1.79 3.53 660.26 190.72 5529.00 7536.72
199.58 1.97 677.30 78.96 142.45 0.00 110.26 10.63 29.12 1.48 38.68 356.37 212.90 990.00 2849.70
26
(Rs. in lakhs) Schedule to the Accounts Schedule M INTEREST AND OTHER FINANCIAL EXPENSES Interest on Borrowings from SIDBI (Net) Interest on Bonds Interest on borrowings from Banks Interest on Fixed Deposits Guarantee Commission to State Government Brokerage on Bonds & Fixed Deposits Premium paid on Prepayment/ Rollover Total: Schedule N PERSONNEL EXPENSES Salaries and Allowances (a) Managing Director (b) Staff & Officers (c) VRS Medical Expenses (a) Managing Director (b) Staff & Officers Contribution to Provident Fund Gratuity and Contribution to Group Insurance Staff Welfare Expenses Total: 7270.46 5795.89 265.27 261.15 41.24 0.00 0.00 13634.01 7656.11 5744.34 289.16 280.92 73.71 0.00 66.42 14110.66 Year Ended 31-03-2008 Year Ended 31-03-2007
6.95 2749.93 81.23
2838.11
6.60 2280.64 74.73
2361.97
0.05 99.66
99.71 260.25 78.82 106.84 3383.73
0.02 97.98
98.00 218.39 73.77 104.63 2856.76
27
(Rs. in lakhs) Schedule to the Accounts ScheduleO ADMINISTRATIVE EXPENSES Travelling Expenses: i) Managing Director ii) Directors Iii) Staff & Officers Sitting Fees to Directors Rent, Taxes & Insurance Postage, Telegrams & Telephones Motor Car Expenses Printing & Stationery Publicity and Advertisement Books, Periodicals & Newspapers Repairs, Renewals and Maintenance Bank charges & Commission Remuneration to Auditors: i) Audit fees ii) Reimbursed Expenses Legal charges Professional and Consultancy charges Prior Period adjustments EDP Expenses Board Meetings / AGM expenses Membership fees / Subscriptions for Institutions Other Expenses Wealth Tax Total: 3.69 5.39 266.22 275.30 0.88 129.98 45.30 86.61 40.26 11.58 3.24 91.57 4.25 6.58 5.63 283.41 295.62 0.56 129.58 52.44 94.87 43.35 8.68 3.32 52.96 6.92 Year Ended 31-03-2008 Year Ended 31-03-2007
1.56 0.55 2.11 29.11 16.83 0.00 0.56 6.61 0.90 63.71 0.17 808.97
1.40 0.72 2.12 31.58 60.92 2.05 1.03 5.81 2.32 33.39 0.37 827.89
28

SCHEDULE - P NOTES & SIGNIFICANT ACCOUNTING POLICIES FORMING PART OF THE ACCOUNTS FOR THE FINANCIAL YEAR 2007-08 I. 1) NOTES TO ACCOUNTS : (a) Pursuant to SIDBI Circular No.FI 03/2006-07 dated 27.04.2006 and Circular No FI 04/2007-08 dated 23-04-2007 with regard to asset classification, advances have been classified as performing and non-performing assets based on the record of recovery of Principal/Interest installments as under : (Rs.in lakhs) Category of assets a) Standard Amount outstanding 73243.72 (65774.63) b) Sub-standard 4812.42 (5638.54) c) Doubtful d) Loss 46980.98 (60486.09) 1044.05 (1021.06) e) Adhoc Provision 00.00 0.00 Total: * (Figures in bracket pertain to previous year) (b) (c) In respect of advances jointly financed with KSIIDC/Others, the asset classification has been done as stated above in the absence of availability of information of leaders classification. In respect of non-convertible debentures where interest is not serviced regularly and as such is in arrears, the same are provided applying the non-performing assets norms for classification of advances and provisions are made accordingly. In respect of lease and hire purchase, the advances are classified as per the RBI Circular No.841/ 01.2000/93-94 dated 28th March 1994 and provisions are made as per IDBI Circular No.DFID No.4937/ coord(SFCs Restr) dated 28th March 1994 and further amendments effected vide SIDBI Circular No.FI 6/2001-02 dated 16th May 2001 and SIDBI Circular referred to at note-1(a). In respect of more than one facility availed by the same borrower provision is made as per the highest overdue age under the various facilities. The Corporation has adopted the method of valuation of investments in shares in accordance with the guidelines issued by RBI on 04.05.2001 effective from 31.03.2001. 126080.72 (132920.32) Amount of provision 183.11 (164.15) 481.24 (657.97) 28032.97 (31727.19) 1044.05 (1021.06) 00.00 (1700.00) 29741.37 (35270.30)
(d)
(e) (f)
29
(g)
i)
In terms of SIDBI circulars referred to above, the Corporation was to make 100% provision in respect of D -III advances with an option to account the additional provision emanating from such provisioning norms over a period of 3 years commencing from 31.03.2007. Thus one third of additional provision i.e Rs.6033.00 lakh (total additional provision Rs.18100 lakh) is deferred. The Government of Karnataka has consented and committed to fund simple interest in respect of small loans upto Rs. 10.00 lakh which have become non-performing assets as on 01-04-2006. The Government of Karnataka had committed a support of Rs.15400 lakh out of which a sum of Rs.6800 lakh was received during the FY 2007-08. The Government of Karnataka has committed a support for the balance of Rs.8600 lakh for the financial year 2008-09. Provision for NPA is considered after taking credit for this amount.
ii)
After considering the above adjustments a sum of Rs.5529.00 lakh has been withdrawn and transferred to Profit and Loss account as provision no longer required. ( refer Schedule L) . 2) The amount of loans and advances is net of Rs.29741.30. lakh (previous year Rs.35270.30 lakh) being the provision made towards substandard and doubtful loans and advances as per SIDBI guidelines. The Corporation has a system of calling for periodic confirmation from its borrowers in respect of loans and advances which have not been disputed by the borrowers. Bank balances include cheques on hand Rs.18535.74 lakh (previous year Rs.4507.38 lakh). besides the
3)
4) 5)
During the year interest of Rs.30147.75 lakh was waived (previous year Rs.7612.92 lakh) bad debts write off of Rs.413.39 lakh (previous year Rs.355.81 lakh) Contingent liabilities: (a) (b) (c) (d) (e) (f) Guarantees and Underwriting Agreements Nil (P.Y. Nil ) Letters of credit issued Rs.419.73 lakh (previous year Rs.197.30 lakh) Amount payable on partly paid non-convertible debentures Nil (previous year Nil) NCD sanctioned but yet to be disbursed Nil (previous year Nil )
6)
Monetary value of eligible accumulated leave to the credit of employees as at 31st March 2008 in the event of opting for encashment is Rs.714.00 lakh (previous year Rs 665.22 lakh). Disputed Sales Tax Liability in respect of leasing transactions relating to assessment years 199596 and 1996-97 is Rs. 97.04 lakh (previous year Rs.107.51 lakh) out of which the corporation has paid Rs.97.04 lakh.(previous year Rs.72.96 lakh). There are no other pending appeals. Assessments are completed up to AY 2005-06. The interest amount payable on matured fixed deposits is subject to renewal by the depositors and the amount is not quantifiable. Claims of dismissed employees pending before Courts - Amount not quantifiable. Commitment towards acquisition of land allotted by KIADB - Rs.1241.20 lakh.(Net of advances) Amount committed to KITVEN towards Venture Capital Fund - Rs.500.00 lakh net.
(g) (h) (i) (j) 7.
Dividend payable to Government of Karnataka amounting to Rs.823.00 lakh represents appropriation made out of earlier years profit towards the dividend payable to Government of Karnataka for the years 1999-2000, 2000-2001 and 2002-2003.
30
8.
Debentures subscribed amounting to Rs 4537.88 lakh (Previous year Rs.5195.03 lakh) is in the nature of loans/advance facilities provided by the Corporation and include Rs.1931.03 lakh (previous year Rs.1931.03 lakh) in respect of which debenture certificates are yet to be received by the Corporation. The Fixed Deposits include matured deposits pending renewal / payment. The Corporation is carrying on financial activities where the risks and returns are same and is in the normal course of lending activities. As such, Segment Reporting required under Accounting Standard 17 issued by Institute of Chartered Accountants of India does not arise. The Corporation in the present situation does not foresee future taxable income within a reasonable period to wipe out the carry forward losses. Hence deferred tax asset/liability has not been created in the books as per Accounting Standard 22 issued by Institute of Chartered Accountants of India. Share capital from the Government of Karnataka Pursuant to G.O No.FD 100 BFC 2005 Bangalore dated 25.10.2007 the Govt. of Karnataka further released a sum of Rs.15000 lakh to the Corporation towards share capital. Pending issue of Govt. Order, Rs.15000 lakh is also shown as Share application money pending allotment.
9. 10.
11.
12.
(a)
(b)
Investment in the equity of Karnataka Neeravari Nigama Ltd and Cauvery Neeravari Nigama Ltd. Pursuant to G.O No.FD 100 BFC 2005 Bangalore dated 25.10.2007 and subsequent directions vide letter No.PWD 132 FC-1/08 dated 20.03.2008 and No.PWD-161 FC-1/08 dated 20.3.2008 from the Government, an amount of Rs.12,000 lakh and Rs.3,000 lakh have been invested in the share capital of Karnataka Neeravari Nigama Ltd and Cauvery Neeravari Nigama Ltd respectively. Pending the execution of MoU with the Government, the amounts are shown under the head, Investments.
13.
Payment of Guarantee Commission to Government of Karnataka/ Contingency Provision The Corporation had been paying guarantee commission at 1% on the outstanding guarantee to the Govt. of Karnataka spread over the tenure of the guarantee. During the financial year 2007-08, on the observation of the AGs, the government decided that the guarantee commission has to be paid at 1% p.a. and recovered a sum of Rs.982 lakh towards arrears of guarantee commission up to financial year 2006-07. The sum of Rs.982.00 lakh continues to be shown as 'amount receivable'. For the same reasons, a provision for Rs.344.92 lakh has been made in the accounts towards the guarantee commission payable for the financial year 2007-08. The Corporation has been pursuing with the Government to permit the payment of guarantee commission at 1%, spread over the tenure of the guarantee in accordance with provisions of Karnataka Ceiling on Government Guarantees Act 1999. The matter is under examination by the government. Pending decision, a provision for Rs.1326.92 lakh is made in the accounts towards the possible loss, if any, that may arise and is shown under 'contingency provision'.
14.
Interest on Sinking Fund Investments. An amount of Rs.988.64 lakh is shown as receivable from the Govt. of Karnataka towards management of subsidy bonds raised by the Corporation during 1999-2000. During 2007-08, the Government agreed to release a sum of Rs.440.00 lakh to the corporation as fees for managing and servicing the bond issue and desired that
31
the balance amount of Rs.548.64 lakh be foregone by the Corporation. The Corporation has been pursuing with the Government for providing matching equity support of Rs.548.64 lakh. Pending decision, a provision for Rs.548.64 lakh is made in the accounts towards the possible loss, if any, that may arise and is shown under 'contingency provision'. 15. Disclosure for Hire Purchase and Financial Lease transactions : (i) Disclosure for hire purchase The gross investment on the Hire Purchase at the balance sheet date and the present value of minimum Hire purchase payments receivable at the balance sheet date are same. Hence no reconciliation is carried out.
a. Reconciliation between the total gross investment in the Hire Purchase at the balance sheet date and the present value of minimum Hire purchase payments receivable at the balance sheet date.
The total gross investment in the Hire purchase and the present value of minimum payments receivable at the balance sheet date, for each of the following periods: 2007-08 (Rs.) i) ii) iii) b) c) Not later than one year Later than one year and not later than five years Later than five years Nil Nil Nil Nil 2006-07 (Rs.) 1,30,746.00 Nil Nil Nil
Unearned finance income The unguaranteed residual values accruing to the benefit of the hire The accumulated provision for uncollectable minimum lease payments receivable Contingent rents recognised in the statement of profit and loss for the period A general description of the significant hire purchase arrangements of the hirer Accounting policy adopted in respect of initial direct costs
Nil
Nil
d)
Nil
Nil
e)
Nil
Nil
f)
Nil No initial direct cost incurred by the Corporation
Nil No initial direct cost incurred by the Corporation
g)
(ii)
Disclosure for finance lease : The gross investment in the Lease at the balance sheet date and the present value of minimum Lease payments receivable at the balance sheet date are same. Hence no reconciliation is carried out.
a. Reconciliation between the total gross investment in the Equipment Lease Finance at the balance sheet date and the present value of minimum lease payment receivable at the balance sheet date.
32
b.
The total gross investment in the lease and the present value of minimum payments receivable at the balance sheet date, for each of the following periods :2007-08 (Rs.) i) ii) iii) Not later than one year Later than one year and not later than five years Later than five years b) Unearned finance income c) The unguaranteed residual values accruing to the benefit of the hire d) The accumulated provision for uncollectable minimum lease payments receivable e) Contingent rents recognised in the statement of profit and loss for the period f) A general description of the significant hire purchase arrangements of the hirer g) Accounting policy adopted in respect of initial direct costs Nil Nil Nil Nil Nil Nil Nil Financial Leasing 2006-07 (Rs.) Nil Nil Nil Nil Nil Nil Nil Financial Leasing
No initial direct cost incurred by the Corporation
No initial direct cost incurred by the Corporation
There is divergent opinion on the applicability of sale tax /VAT liability in respect of the assets taken over and sold u/s.29 of SFCs Act. The matter has been referred to Government of Karnataka. The Management does not foresee any liability on this account. Contingency deposit of Rs.129.87 lakh collected from Lessees towards anticipated claims from commercial tax department representing sale tax on lease rentals is carried as liability. The Corporation paid an adhoc amount of Rs.73.18 lakh to the commercial tax department against the above transaction and shown this as advance. These are subject to further review / adjustment if any.
16. Impairment of assets (a) (b) 17. During the year there is no impairment of assets presently used by the corporation having any impact on the net profit of the Corporation for the year as contemplated by the accounting standard 28(AS- 28) The Corporation was not able to assess the realisable value of fixtures attached to the permanent structures. Hence the same has been carried at WDV in the books.
Capital Expenditure on Infrastructure Development As part of diversification plan, the Corporation has taken up infrastructure development activities. Application has been made to KIADB for allotment of lands at Mysore and Harohalli Industrial Area, Kanakapura. The initial payment made along with the application has been shown as Advance towards Capital Expenditure and the balance amount payable is shown under the Contingent liabilities".
18.
Revaluation of Assets Pursuant to SIDBIs Letter No.420/DFID/SFCs/ dated 1st April 2008, the land and buildings of the Corporation, including the leasehold land held by the Corporation at No.1/1, Thimmaiah Road, Bangalore-52, have been revalued to reflect the true value of assets as on 31.3.2008. The net increase on revaluation is Rs.5,215.69 lakh, for which corresponding Revaluation Reserve has been created.
33
19.
(a)
Old entries in the Bank reconciliation pertaining to Canara Bank operative account outstanding prior to 01.10.2007 have been reviewed and have been transferred to separate schedule pending receipt of certain clarifications from the said bank. Current liabilities include certain balances in suspense account, sundry deposits & other liabilities which are being carried forward for the past few years requiring review and adjustment. The effect of such reconciliation & adjustment in respect of old balances on the net profit of the corporation and on current liabilities /others and Bank balance is not ascertained.
(b)
20.
The income tax assessments of the Corporation have been completed up to assessment year 2005-06. Certain demands consequent to the orders of the Hon. ITAT amounting to Rs.36.90 lakh and Rs.26.56 lakh pertaining to the assessment year 1994-95 and 1995-96 respectively have been provided. A sum of Rs.98.03 lakh representing 50% of the demand for the assessment year 1996-97 arising on account of orders made Under Section 154 of the Income Tax Act was paid during the year. This order was appealed against and a favourble decision has since been obtained. Hence this amount becomes refundable. No appeals are pending. Other income includes forfeited amounts in respect of earnest money/sundry deposits. Previous years figures are regrouped and rearranged wherever necessary requirements. II. SIGNIFICANT ACCOUNTING POLICIES to conform to current year
21. 22.
1.
(a)
As required by IDBI vide Circular dated 26th April, 1994, the Corporation follows Cash System of Accounting for recognition of income and expenditure. Further, all expenditure including interest which is accrued and fallen due is accounted irrespective of its payment excepting for Guaranteed Dividend liability up to 1999-2000 which is accounted on receipt of subvention money from GOK and charged off in the year of profit. Memorandum loan accounts are maintained on mercantile basis for the purpose of Management Information System. Non-performing Assets has been made as per the applicable guidelines issued by IDBI
(b) 2. 3. 4.
Provision against AND SIDBI.
The Corporation de-recognises income accounted on the receipt of cheques pending realisation at year end and which are subsequently dishonored. The guidance note on Accounting for lease issued by the Institute of Chartered Accountants of India (ICAI) has been adopted in respect of assets given on lease and the lease equalization /terminal adjustment is provided on the basis of schedule of lease rentals due over the period of lease for lease transactions. Accounting Standard 19 issued by ICAI has been adopted in respect of assets given on lease and HP. The income from bills discounting and DPG commissions are accounted up front. The allocation logic adopted by the Corporation for repayment of loan made by the borrower is to first adjust towards other debits, thereafter to adjust interest dues and lastly the remaining amount towards repayment of principal. In case of one time settlement and appropriation of sale proceeds of assets taken over under Section 29 of the SFCs Act 1951, the allocation logic is to first adjust towards principal thereafter towards interest accounted under Mercantile system till the year 1983, then towards other debits and lastly the balance, if any, towards interest due subsequent to 1983. Sale consideration on the sale of assets offered as security to the Corporation on deferred payment basis is accounted in the year of sale where the borrowers accounts were written off in earlier years, and in other cases the income is accounted on actual receipt of deferred payment instalments.
5. 6.
7.
34
8. 9. 10.
Appropriation of amounts received on account on One Time Settlement is made on approval by the Board. In terms of RBI Circular dated 4th May, 2001 effective from 31.03.2001, investments are classified as Available for sale and provisioning for net depreciation in the value of investments is made. (a) (b) Fixed assets have been carried at historical cost less depreciation and include all lease assets. The land (both free hold and lease hold ) and buildings owned by the Corporation have been revalued as on 31.3.2008 and such revalued amounts are credited to Revaluation Reserve and disclosed under Reserve Fund and Other Reserves. Depreciation is provided on straight line method at the following rates. 1. 2. 3. 4. i ii Building Furniture and fixtures Fans and Electrical Fittings, Internal Telephones and Equipments Motor cars, Bicycles, Computers and Motor Cycles 15% 20% 04% 10%
(c)
On additions made during the year depreciation is provided for full year, in respect of sales during the year no depreciation is provided in the year of sale. Revalued amounts in respect of buildings is depreciated over next 25 years. Revalued amounts in respect of lease hold land at No.1/1, Thimmaiah Road, Bangalore-52 is amortized over the balance primary lease period commencing from financial year 2008-09. Revaluation Reserve in respect of buildings and leasehold land will be withdrawn to the profit & loss account from the financial year 2008-09 to the extent of depreciation /amortization each year.
iii (d) 11. 12.
Depreciation on all the leased assets is provided on straight-line method over the primary period of lease.
The Corporation has taken a policy under Group Gratuity Scheme with Life Insurance Corporation of India for payment of gratuity to its employees and premium thereof has been charged to Profit and Loss Account. The Corporation has own Provident Fund Regulations and contribution to the fund is accounted for. For Karnataka State Financial Corporation
Sd/Vasant Kumar Dy. Gen.Manager (C) I/c
Sd/Dr. S.S.Chandrashekar Executive Director (F) I/c
Sd/D.N.Nayak, I.A.S. Managing Director
Sd/M.R.Sreenivasa Murthy, I.A.S. Chairman
35
MANAGEMENTS REPLY TO THE REPORT OF STATUTORY AUDITORS TO SHAREHOLDERS

0.1 Provisioning [4(a) (i)] The classification and provisioning for Non Performing Assets are based on the guidelines issued by SIDBI. The Corporation has followed these guidelines and has assessed provisioning requirements accordingly. The Govt. of Karnataka has assured a budgetary support of Rs. 154.00 crore to reimburse the simple interest in respect of one time settlement of small loans upto Rs.10.00 lakhs. A budgetary provision of Rs.54.00 crores was made in the Govt. of Karnataka Budget for the Financial Year 2007-08. The remaining amount of Rs. 100.00 crore was proposed to be provided over the next two Financial Years at Rs. 50.00 crore each year. However Govt. has enhanced the budgetary support for 2007-08 and released Rs. 68.00 crore during the Financial Year. The balance Rs. 86.00 crore has been proposed to be released by the Government of Karnataka during the Financial Year 2008-09 as per the assurance of the Government. The scheme is intended to enable the Corporation to write back the provision made for non-performing assets. In view of the above, the amount has been reckoned for the provisioning requirements. 02. Applicability of VAT / Sales tax [4(a)(ii)(a)] The Corporation has taken legal opinion on the matter. As per the opinion, the assets taken over and sold under See.29 of the SFCs Act does not attract Value Added Tax. The subject has been deliberated in the board of the KSFC and a submission has been made to the Government of Karnataka for issue of necessary clarification on this issue. In view of the above position, the Corporation does not foresee any liability on this account. 03. Contingency Deposits from the lessees [4(a)(ii)(b)] The applicability of sales tax in respect of the leasing transactions carried out by the Corporation in the earlier years is under dispute. However, as a precautionary measure, contingency deposits have been collected from the lessees. Out of the deposits of Rs. 129.87 lakh, an amount of Rs.73.18 lakh has been paid based on assessments completed and the balance is carried forward pending assessment and appeals. The corporation has also obtained indemnity bonds from the lessees to take care of the eventual liabilities that may arise. The management does not foresee any liability which may affect the profit. 04. Monetary value of accumulated leave [4(b)] The Corporation has been disclosing the monetary value of eligible accumulated leave to the credit of employees as contingent liability at para 6 (e) in the notes to accounts. The Corporation follows Cash System of Accounting and monetary value of eligible accumulated leave will be paid to the employees as and when the claim is made and accounted for in the year of payment. The said policy of the Corporation will be taken up for review during the FY 2008-09 when the Corporation is expected to switchover to the Accrual System of Accounting.
36
ADDITIONAL DISCLOSURE AS PER SIDBI GUIDELINES (A) CAPITAL : 2007-08 CRAR Core CRAR Supplementary CRAR Subordinated Debt.& Tier II Capital Risk Weighted Assets(Net) i) On Balance Sheet ii) Off Balance Sheet Shareholding pattern Category Government of Karnataka SIDBI Insurance Companies, investment trusts and other financial institutions Public Sector Banks Other parties TOTAL: B. a. b. No.of shares 6837888 2920192 16090 7900 2475 9784545 % of holding 69.88 29.84 0.17 0.08 0.03 100 -23.27% -23.27% Nil 153440.40 825.20 (Rs.in lakhs) 2006-07 -33.96 % -33.96 % Nil 135707.69 583.67
Sl.No. a)
b) c)
d) No. 1 2 3 4 5
ASSET QUALITY AND CREDIT CONCENTRATION : Percentage of net NPAs to net loans and advances : 24.17 (32.80)% Amount and percentage of net NPAs under the prescribed asset classification categories Net NPAs (Rs.in lakhs) Sub-standard assets Doubtful assets Total : 4331.18 (4980.57) 18948.07 (27058.90) 23279.25 (32039.47)
Percentage 4.50 (5.10) 19.67 (27.71) 24.17 (32.80)
*Figures in bracket indicates previous years figures. c. Amount of provisions/write off made during the year towards standard assets, NPAs, investments (other than those in the nature of an advance, income tax). (Rs. In lakhs) Assets Standard Assets NPAs Investments Total : Provisions/Write Off 2007-08 (18.96) 5146.81 (12.24) 5115.61 2006-07 (34.56) 702.83 (34.15) 634.12
Note: Figures in brackets indicate the additional provision made towards NPAs and figures other than in bracket indicate the withdrawal of excess provision made.
37
d.
MOVEMENT IN NET NPAs : PARTICULARS Opening balance as at 01.04.2007 Add: Additions during the year Less : Recovery during the year Closing balance as at 31.03.2008 31.03.2008 33739.47 8227.29 18687.51 23279.25
(Rs.in lakhs) 31.03.2007 44552.57 15646.43 26459.53 33739.47
e.
Credit exposure as percentage to capital funds and as percentage to total assets in respect of Sl.No. 1 2 Assets The largest single borrower The 10 largest single borrowers % to capital funds 2.26 17.00 % to total assets 0.50 3.73
Note :- Credit exposure to largest borrower group is not disclosed, since the related Data base is not available. f. Credit exposure to five largest industrial sectors as % to loan assets Sl. No. 1 2 3 4 5 C. Hotel and construction Industries Food excluding beverages Non metallic minerals Metallic products Other industries % to loan assets 24.28 18.76 10.47 6.43 3.12 (Rs.in lakh) Less than or equal to 1 year 76946.57 76946.57 23549.34 23549.34 53397.23 More than 1 year upto 3 years 3962.03 3962.03 46156.86 46156.86 -42194.83 More than 3 years upto 5 years 4535.97 4535.97 49862.01 49862.01 -45326.04 More than 5 years 22463.71 22463.71 36573.88 36573.88 -14110.17 Total 107908.28 107908.28 156142.09 156142.09 -48233.81
LIQUIDITY : ITEMS Rupees assets Total assets Rupee liabilities Total liabilities Total (Net)
D.
OPERATING RESULTS : 2007-08 a) b) c) d) e) Interest income as a % to average working funds Non interest income as a % to average working funds Operating profit as a % to average working funds Return on average assets Net profit per employee 14.05 5.58 5.05 4.41 4.85 2006-07 11.79 2.01 1.25 0.96 1.00
38
KARNATAKA STATE FINANCIAL CORPORATION CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2008
(Rs.in lakhs) Particulars OPENING BALANCE : - Cash - Bank balances - Fixed Deposit with banks Sub Total (A) ADD : CASH INFLOW Share Capital - Ordinary Share capital - Special Share capital - Redeemable preference share capital - Amount received on Share Application BONDS AND DEBENTURES - Secured (guaranteed bonds and others) - Unsecured BORROWINGS - State Government - SIDBI - Scheduled Banks - Others DEPOSITS - State Government - Others (guaranteed by State Government) - Other deposits SALE OF INVESTMENTS - Own investments (a) Governments Securities (b) Acquired under underwriting agreements (c) Others - Investments in nature of loans and advances (a) Out of special class of share capital (b) Others LOANS AND ADVANCES-RECOVERIES - Term loans (including working capital) - Bridge loans (term loan and subsidy loan) - Hire purchase/Lease finance - Factoring /Working cap - Bills Discounted/Merchant Banking - Assistance out of special class of share capital - Margin Money Subsidy received from State Government Subsidy recovered from parties not fulfilling the terms and conditions for availing subsidy Subsidy received from SIDBI Others Inflows Sale of fixed assets Net decrease in working capital Cash inflow from operations Total Cash Inflow (B) YEAR ENDED YEAR ENDED FY 2007-08 FY 2006-07 183.87 4687.90 9435.20 14306.27 102.11 11461.76 16500.00 28063.87
0.00 0.00 0.00 15000.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 10600.00 0.00 0.00 0.00 0.00 657.72 0.00 0.00 0.00 112.50 0.00
0.00 15500.00 8000.00 0.00 0.00 0.00 307.72 0.00 0.00 0.00 62.50 0.00
36239.00 0.00 42.85 19.01 884.00 0.00 6.75 13854.00 0.00 0.00 205.56 12.12 0.00 3052.80 94992.58
31498.00 0.00 245.38 0.00 1289.31 0.00 11.50 3075.00 0.00 579.68 131.00 17.38 515.31 741.90 82038.55
39
Particulars Less : Cash outflow Redemption of redeemable preference share capital Repayment of Bonds and debentures - Secured (guaranteed bonds and others) - Unsecured (Subsidy bonds redeemed) Repayment of Borrowings - RBI - State Government - Vishwa Scheme - SIDBI - Scheduled banks - Others - Margin Money Repayment of Deposits - State Government - Other (Guaranteed by State government) - Other deposits Purchase on Investments - Own investments (a) Government Securities (b) Acquired under underwriting agreements (c) Others Application Money on Shares - Investments in nature of loans and advances (a) Out of special class of share capital (b) Others Disbursements of Loans and advances: - Term loans (including working capital) - Bridge loans (term loan and subsidy loan) - Hire purchase/Lease finance - Factoring/Working capital financing - Bills discounted / MB&FS - Assistance out of special class of share capital - Margin Money Purchase of fixed assets Subsidy disbursed from Amounts received from State Governments for Subsidy Subsidy disbursed from Amts received from SIDBI for subsidy Amounts refunded to State Government for subsidy recovered from parties for not fulfilling the terms and conditions for availing subsidy Subsidy Advances Others Outflows Income Tax Paid Net increase in working capital Total Cash Outflow (C) Closing balances: - Cash - Bank Total (D)
(Rs.in lakh) YEAR ENDED YEAR ENDED FY 2007-08 FY 2006-07 0.00 6631.46 0.00 0.00 145.00 12474.22 0.00 76.61 0.00 0.00 5345.03 0.00 0.00 0.00 21541.35 0.00 69.82 4.26
1010.31
512.62
15000.00
0.00
126.00 30312.00 0.00
0.00 31039.00 0.00
267.69 4575.38 92.94
8.34 8700.02 511.84
0.00 0.00 982.00 0.00 629.75 72323.36 72.02 22597.20 94992.58
0.00 0.00 0.00 0.00 0.00 67732.28 183.17 14123.10 82038.55
40
Karnataka State Financial Corporation

KSFC Bhavana, No.1/1, Thimmaiah Road, Bangalore 560 052 Ph : 22263322 (11 lines) Fax : 080-22250126 e-mail :info@ksfc.in website : www.ksfc.in
ZONAL OFFICES: 1. 2. Bangalore Rural Zone, # 48, I Floor, Church Street, Bangalore-560 001 Ph :25587355 Fax : 080-25586718 # 2716, 1st Floor, Sourabha Chambers, Sri Harsha Road, Lashkar Mohalla, Mysore-570 001 Ph : 2332786 Fax : 0821-2331545 Somayaji House, # 330, 4th Floor, Bunts Hostel Road, PB No. 750, Mangalore 575 003 Ph : 2443573 Fax : 0824-2443939 # 31&32, King Complex, Near KBN Hospital, Station Road, Gulbarga 585 101 Ph : 222394 Fax : 08472-224352 5. 6. Near Hotel Sanman Compound, College Road, Belgaum-590 001 Ph : 0831-2432387, 2426369, Fax: 0831-2432723 # 1179/1, S. Nijalingappa Layout, Near Ring Road Davanagere-577 004 Ph : 08192-225176, 225660 Poona-Bangalore Road, Rayapur, Dharwad 580 009 Ph : 2322700, 2322792 (Gen.) Fax : 0836-2322685
3. 4.
7.
SUPER A GRADE BRANCH OFFICES: 1. 2. M.G. Road Branch Office, #48, 1 & 2 Floor,Church Street, Bangalore- 560 001, Ph : 25594198, 25597306 Fax : 080-25594836 Jayanagar Branch Office, 8th Floor, Jayanagar Shopping Complex, 4th Block, Jayanagar, Bangalore - 560 011 Ph : 26637565 Fax :080-26547165
st nd
3.
Rajajinagar Branch Office, # 197, 1st & 2nd Floor, I Block, West of Chord Road, Bangalore-560 086 Ph :23495812, 23495821 Fax: 080-23494628
A GRADE BRANCH OFFICES: 1. Bangalore Rural Branch Office, # 48, 1st Floor, Church Street, Bangalore 560 001 Ph : 080-25581357, 25588981 Near Hotel Sanman Compound, College Road, Belgaum-590 001 Ph : 2429243,2427043 Fax: 0831-2432723 Poona-Bangalore Road, Rayapur, Dharwad 580 009 Ph : 2322235, 2322692 Fax: 0836-2322685 # 2716, 1st Floor, Sourabha Chambers, Sri Harsha Road, Lashkar Mohalla, Mysore-570 001 Ph : 0821-2426197, 2437502 # 31&32, 1st Floor, King Complex, Near KBN Hospital, Station Road, Gulbarga 585 101 Ph : 08472-221407, 241648 Plot No. 2, Indl. Estate, BH Road, Tumkur 572 103 Ph : 2280027, 2281561, Fax : 0816-2280089 7. # 330/50, 3rd Floor, Somayaji House, PB # 750, Bunts Hostel Road, Mangalore-575 003 Ph : 0824-2443554, 2443765, 2443051, 2443798 3 & 4 Floors, Anantha Towers, Court Road, Udupi-576 101 Ph : 0820-2526305, 2526306 Fax: 0820-252900 Race Course Road, Hassan 573 201 Ph : 268703, 265429 Fax: 08172-266836 # 153/A, Near DC Office, Opp : Mount Carmel Convent, K.R. Road, Subhash Nagar, Mandya 571 401 Ph : 08232-226744, 226745 Fax: 08232-225496 CRS Complex, Near KSRTC Bus-stand, M.B. Road, Kolar 563 101 Ph : 224757, 222537 Fax: 08152-222661 # 86/2 & 88/2, Hospet Road, Ward No.21, Bellary - 583 102 Ph : 08392-242719, 242105
rd th
2.
8.
3. 4.
9. 10.
5. 6.
11. 12.
B GRADE BRANCH OFFICES: 1. 2. 3. Devaraj Urs Commercial Complex, TSB Circle (Gopi Circle), Shimoga 577 201 Ph : 08182-270198, 224598, 229236 Near Basaveshwara Theatre, Near IB, Chitradurga 577 501 Ph : 08194-224411, 222341, 223846 Near Ibrahimpur Rly. Gate, B. Bagewadi Road, Bijapur 586 101 Ph : 276102 Fax: 08352-277032 Plot No.7, MP No.1-1-53, Udayanagar, Station Road, Raichur 584 101 Ph : 08352-227028, 232111 8-9-16, Rachamma Complex, 1st Floor, Bidar-Udgir Road, Near Jail, Bidar 584 401 Ph : 08482-228236, 226381 1st Floor, Raykar Manor, Kaikini Road, Karwar 581 301 Ph : 08382-221006, 221888 PB No.168, Near Dist. Field, Hosamane Extension Road, Chickmagalur 577 101 Ph : 230447, 2234045, Fax: 08262 -230695 8. 9. 10. L-8, Indl. Estate, Madikeri 571 201 Ph : 08272-228588, 228143 Neelana Goudra Complex, Opp : LIC Office, PB Road, Haveri 581 110 Ph : 08375-232362, 233722, 233772 Plot No. 18-21, 6th Main Road, G Cross, Sector No. 24, Navanagar, Bagalkot-587 102 Ph : 235478 Fax: 08354-235482 # 1179/1, S. Nijalingappa Layout, Near Ring Road, Davanagere 577 004 Ph :08192-225049, 225660 Dr R.N.Godbole Building, CTS No.6678 A, A-1- B-1, Vidyanagar, Gadag Ph : 08372-239052, 276041, 279052, 236041 SPS Complex, 1st Floor, Vaniyar Road, Chamarajnagar-571 313 Ph : 08226-722150, 722801 K.P.T.C.L. Road, Near Lakshmi Talkies, Koppal 583 231 Ph : 08539-220664, 222157
4. 5.
11. 12.
6. 7.
13. 14.
Printed at Lavanya Mudrana, No.19, 15th Cross, B.S.K. I Stage, Near Vidyapeeta Circle, Bangalore - 560 050. 41 Ph : 26610563, 22427209
42
43

KSFCar0708-e 943264013

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

KSFCar0708-e 943264013

Hochgeladen von

Copyright:

Verfügbare Formate

OPERATIONS AT A GLANCE

Amount (Rs. in crore)

Since inception up to 31.03.2008 -......

788 165.00 199.86 1,342.28 555.06 46 210.16 204.50 8.56

875 178.53 310.39 1,320.71 502.74 33 195.71 182.31 17.32

795 173.05 303.13 1,264.58 561.14 24 265.21 201.92 31.66

1,03,595 4,459.42 6,829.53 -..... -..... -..... -..... -..... -..

U/s of SFCs Act

Managaing Director Managaing Director

23.06.2006 24.01.2008 04.02.2008 12.06.2008 14.07.2008

Sri. Tapan Senapati, Sri. D.N. Nayak,

Managaing Director Managing Director

Sri. Kaushik Mukherjee,

U/s of SFCs Act

Dr. Raj Kumar Khatri, Sri. H. Suresh Prabhu Sri. S. Nagaraju

Sri. Ramesh G. Dharmaji

Dr. S.S. Chandrashekar Sri. N.R. Sridhar

KARNATAKA STATE FINANCIAL CORPORATION

- CREDIT RISK ANALYSIS MODELS

Amount 161.54 59.07 31.84 27.27 21.55 18.42 8.82 8.20

7.37 6.45 17.62 368.15

2.00 1.75 4.79 100

23.55 67.70 368.15

0.67 1.00 100.00

6.40 18.39 100.00

Status of Repayment as on 31.03.2008

KPM(R) CASES: During the year,

Place : BANGALORE Date : 30.06.2008

KARNATAKA STATE FINANCIAL CORPORATION

Total: Notes & Significant Accounting Policies forming part of Accounts P

Place : Bangalore Date : 28.06.2008

KARNATAKA STATE FINANCIAL CORPORATION

Year Ended 31-03-2008

Year Ended 31-03-2007

INCOME Interest Income Other Income

18984.75 7536.72 26521.47

16721.70 2849.70 19571.40

Place : Bangalore Date : 28.06.2008

KARNATAKA STATE FINANCIAL CORPORATION

Schedule to the Accounts

KARNATAKA STATE FINANCIAL CORPORATION

Schedule to the Accounts

45427.46 11943.50 57370.96 85694.04

52066.96 11943.50 64010.40 87568.26

36.96 2748.91 6.81

58.91 3079.54 6.81

8100.00 100.00 156142.19

8100.00 245.00 165230.10

KARNATAKA STATE FINANCIAL CORPORATION

Schedule to the Accounts

1726.33 9.20 0.49

2307.64 9.20 0.50

971.64 958.11 0.00 0.00 13.53 0.00 823.64

124.19 1875.56 8.50 63.46 18900.97

83.19 0.00 0.00 0.00 7571.77

KARNATAKA STATE FINANCIAL CORPORATION

1.73 5615.18 692.94 4922.24 4995.99 5032.57 641.40

296.73 4391.17 4871.07

16.28 16.28 223.04 119.89 251.00 16.50 0.50

16.28 16.28 223.04 107.65 237.50

KARNATAKA STATE FINANCIAL CORPORATION

1.17 8100.00 105790.61