annual report - 2008-09 - kerala financial corporation 2009.pdf · annual report - 2008-09 ......

ANNUAL REPORT - 2008-09

KERALA FINANCIAL CORPORATION

“KFC would be transformed into an important development agency in Kerala”

Dr. T.M. Thomas Isaac

(Hon. Minister for Finance)

We Finance your dream...

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CONTENTS

Page No.

Board of Directors 05

Principal Officers 06

Notice to shareholders 07

Report of the Directors 08

Auditors Report 17

Financial Statements 19

Shedules forming part of financial statements 21

Cashflow Statement 28

Accounting Policies 29

Notes to Accounts 30

Disclosure Requirements 32

Summary of operations 34

Highlights of performance 42

Proxy form

KFC Annual Report - 2008-09

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Our guiding light...

Prof. Sushil Khanna

Chairman

Dr. P.T. Nandakumar IPS

Managing Director


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Launching of Mutual Fund distribution, Insurance and Rating Services

at Hotel Hyson Heritage, Kozhikode

Launching of KFC Consultancy Division

at Kanakakkunnu Palace, Thiruvananthapuram

Memorabl e Ev ents


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BOARD OF DIRECTORS

1 Prof. Sushil Khanna, Nominated by the Small Industries Development BankIndian Institute of Management, Kolkata of India under Sub Section (1) of Section 15 andChairman, KFC read with Section 10(a) of the SFCs Act.218- B, Lake Terrace ExtensionKolkata -700 029

2 Dr. M.P. Sukumaran Nair, Nominated by the Government of Kerala underSpecial Secretary to Chief Minister, Section 10(b) of the SFCs Act.Govt. of Kerala, Thiruvananthapuram.Former Managing DirectorTravancore Cochin Chemicals Ltd., Kochi.

3 Dr. Krishna Kumar, Nominated by the Government of Kerala underFormer Director Section 10(b) of the SFCs Act.Indian Institute of ManagementKozhikode.

4 Sri. A.Vikraman, Nominated by the Small Industries Development Bank(CGM, Rtd.), SIBDI, of India under Section 10(c) of the SFCs Act.G-3, V.B.Royal, B.B.Block,Elamakkara RoadEranakulam-682024

5 Shri. Namgial, Chief General Manager, Nominated by the Small Industries Development Bank ofSouthern Zonal Office, India under Section 10(c) of the SFCs Act.SIDBI, 480, Annasalai,Nandanam,Chennai- 600 035.

6 Sri. K. Swaminathan, Nominated under section 10(d) of the SFCs Act.Senior Divisional Manager,LIC of IndiaThiruvananthapuram - 695004

7 Shri. S.L.HariHaran Nominated under section 10(d) of the SFCs Act.General Manager(Treasury),State Bank of TravancoreThiruvanamthapuram- 695012

8 Dr.P.T.Nandakumar, IPS, Appointed by the Government of Kerala underMA, LLB, DJ, MBA, CNT, Phd. Sub Section (1) of Section 17 of the SFCs Act.Managing Director, KFCThiruvananthapuram - 695 033


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PRINCIPAL OFFICERS

General Manager Zanu Zacharias

General Manager Premnath Ravindranath

Financial Controller Sabu Thomas

Corporate Secretary Rengaswamy.C.R

HEAD OF THE DEPARTMENTS

Personal and Administration Chandrasenan.N (Late)

Internal Audit & Inspection Sreekumar.P.B

Technical &Business Development Rajeev. K.S

Legal Ikubal Mohammed

Systems Adarsh. R.

ZONAL MANAGERS

South Zone Jayasankar.R

Central Zone Asok Kumar.N

North Zone Shaji Sukumar

BRANCH HEADS

Thiruvananthapuram Francis Gomez

Kollam Mohanan Achari .C

Pathanamthitta Radhakrishnan.S

Alappuzha Anil Kumar.P.J

Kottayam Antony.M.V

Idukki Thomas John

Perumbavoor Hirandas.K.M.

Ernakulam Narayanan.T.P

Thrissur Jayaraghavan.C

Palakkad Jayarajan.M

Malappuram Premraj.M.A.

Kozhikode Sasidharan.C

Wayanad James Thomas

Kannur Rajan.V

Kasaragode Thomas.V.M

STATUTORY AUDITORS

M/s. Sasi Vijayan & Rajan

Chartered Accountants

Thiruvananthapuram - 695 001


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KERALA FINANCIAL CORPORATION(Incorporated under the State Financial Corporations Act No. LXIII Of 1951

H.O: Vellayambalam, Thiruvananthapuram - 695 033.Phone: 2318319 Fax: 2318541, 2311750, 2313813 Email: [email protected] Website: www.kfc.org

NOTICE TO SHARE HOLDERS

Notice is hereby given that the 56th Annual General Meeting of the share holders of KeralaFinancial Corporation will be held at the Head Office of the Corporation at ‘Aswathy’, Vellayambalam,Thiruvananthapuram - 695033, on Thursday , July 16, 2009 at 10.30 A.M. to transact the followingbusiness:

1. To consider and adopt the Balance sheet as at 31st March, 2009 and the Profit & Loss account for the yearended 31st March, 2009 of the Corporation, the Report of the Board of Directors on the working of theCorporation for the Financial Year 2008-2009 and the Auditors’ Report on the said Balance Sheet andAccounts.

2. To appoint Statutory Auditors of the Corporation for the Financial Year 2009-2010 as approved and on termsand remuneration as fixed by Reserve Bank of India, under Section 37(1) of the SFCs Act.

By Order of the Board

Sd/-Dr. P.T. Nandakumar, IPS,

Managing DirectorThiruvananthapuram,Dated: June 22, 2009

NOTES:1. The Share Register of the Corporation shall remain closed and transfer of shares will be suspended from

July 6, 2009 to July 16, 2009 (both days inclusive).2. The form of proxy is enclosed.3. Voting rights of the shareholders shall be determined in terms of the provisions under Section 4F of the State

Financial Corporations Act, 1951.4. Any shareholder entitled to attend and vote at the meeting shall be entitled to appoint another person

(whether a shareholder or not but not being an officer or employee of the Corporation) as his proxy toattend and vote instead of himself. No proxy shall be valid unless it is duly stamped and unless it, togetherwith the power of attorney or other authority (if any) under which it is signed, or a copy of that power orauthority certified by a notary public or a magistrate, is deposited at the Head Office of the Corporation notless than 48 hours before the time fixed for the meeting.

5. A shareholder being a Company including Small Industries Bank, Public Sector Banks, Co-operative Banks,Co-operative Societies and LIC may, by a resolution of its Directors, authorise any of its officials or any otherperson (not being an officer or employee of the Corporation) to act as its representative at the meeting. Thecopy of the resolution appointing him as a duly authorised representative certified to be true copy by theChairman of the meeting at which it was passed shall have been deposited at the Head Office of theCorporation not less than 48 hours before the time fixed for the meeting.

6. The State Government may, by order in writing, authorise any of its officers, whether a Director of theCorporation or not, to act as its representative at the meeting. The copy of the order shall be deposited atthe Head Office of the Corporation before the time fixed for the meeting.

7. The meeting shall be held, conducted, and the business thereat shall be transacted in adherence to theprovisions of the State Financial Corporations Act 1951 (as amended up to date) and in terms of theprovisions of the General Regulations of Kerala Financial Corporation.


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DIRECTORS’ REPORT

Board of Directors of the Kerala Financial Corporation have great pleasure in presenting the 56thAnnual Report on the performance of the Corporation for the Financial Year ended March 31, 2009.The financial statements for the Financial Year ended on that date are attached.

Financial year 2008-09 - An over view:

World Economy:

The world economy suffered a set back in 2008-09. The sub-prime lending crisis in the United Statessnowballed and affected the global economies. Many insurance companies and banks were affectedby the onslaught. Governments in United States and Europe had to bail them out by pumping inbillions of dollars and rescue them from collapsing.

Indian Economy:

Indian economy managed to beat the global financial turmoil due to sound regulation, prudentfinancial supervision and proactive policies. In the first half of the year, high inflation and spirallingcrude oil prices were the major concerns, but the focus in the second half shifted to sustaining growthand maintaining stability. Real GDP growth is expected to moderate from 9.0% in 2007-08 to 6.5%- 6.7% in 2008-09. Industrial production was marked by a slowdown in the manufacturing sector.The slowdown in industry and agriculture was partially offset by a reasonable 9.7% growth in servicessector in 2008-09 (April-December).

To mitigate the impact of the current slowdown, Government launched three fiscal stimuluspackages in the form of cut in indirect taxes, higher Government spending and support for exports,along with easing of monetary policy by RBI. After remaining in the range of 10 – 12% betweenJune and October 2008, inflation began to ease from November 2008 onwards to touch 0.26% by28th March 2009 mainly reflecting the decline in prices of crude oil, metals, minerals and manufacturedgoods.

The focus of RBI’s monetary and credit policy during the year was to control inflation, supportgrowth, maintain financial market stability, ensure comfortable liquidity in the system to meet therequired credit demand and limit the contagion from the ongoing global turmoil. During 2008-09,while the Bank Rate was kept unchanged at 6%, Reverse Repo and more particularly the Repo rateand CRR were changed on a number of occasions. When the growth stalled and inflation startedcoming down due to drop in crude oil and commodity prices, the Repo rate was cut five times to 5%,the Reverse Repo rate was reduced three times to 3.50% and CRR was cut four times to 5.0% betweenOctober 2008 and March 2009.

Kerala Economy:

Kerala, being historically more integrated with the rest of the world, is more susceptible toany external shocks compared to rest of the States in India. Major share of the transfer payment/remittances are sent by non resident Keralites, and tourism is a major source of employment in theState. Kerala has a large number of export oriented small and medium units like marine products,


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coir, cashew, rubber, rice, spices and tea. Recession in the Middle East has resulted in many Keralitesloosing jobs and coming back. The ongoing recession has also badly affected traditional and smallindustries like coir, cashew, marine products, etc. resulting in a loss of direct employment to about70,000 persons.

The State Government has taken major initiatives for revamping the economy of the Stateand announced special anti-recession package to the SME sector through KFC. The traditional industriesand SME sector are offered loans at an attractive rate of 11% while the Gulf returnees are offeredloans at a special rate of interest of 7%. KFC has also been made the Nodal Agency for revitalizationof Public Sector Undertakings and the Corporation will sanction the loans to PSUs at a special rate ofinterest of 8.5%.

In the coming year, a stable banking and financial sector, falling inflation and prompt co-ordinated policy action by the State Government, will help to weather the crisis and keep up thegrowth momentum.

Performance of the Corporation:

The Corporation could achieve very good results in all areas of operation. Highlights ofperformance of the Corporation are given below

Financial Restructuring:

The corporation resorted to a financial restructuring exercise during the year. The Extra OrdinaryGeneral Meeting held on 20.03.09 decided to adjust the entire accumulated loss against the paid upshare capital. The accumulated loss of Rs.105 crores has been wiped out by setting off the loss againstthe paid up share capital with the concurrence of SIDBI and Government of Kerala and also with theapproval of the share holders in the Extra Ordinary General Meeting. Section 4E(2) (b) of the SFCs Act,1951 facilitates this setting off. The wiping out of accumulated loss has resulted in reduction ofholding of all shareholders proportionately. Doubtful-III category loans have been written off fromthe books so that unrealizable assets are removed from the balance sheet.

(Rs. In lakhs)

Financial Year 2008-09 2007-08 2006-07

Sanctions 37314 24555 13583

Disbursements 29339 18643 9725

Recovery 26925 22181 19907

Total Income 10926 8833 8960

Total Expenditure 6798 6571 5993

Bad debts written off 11758 3291 1713

Operating Profit /Loss (7630) (1029) 1254

Provision for Bad & Doubtful Debts (8433) 1310 600

Net Profit(+)/ Loss (-) for the Year 1170 (2815) 44

Capital Adequacy Ratio % 36.35 15.95 20.35

Net NPA % 13.22 28.68 48.52


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Segment 2008-09 2007-08

No. Amount No. Amount

SSI 239 6467 179 4359

Non SSI 402 30847 297 20196

Total 641 37314 476 24555

(Rs.Lakhs)

Recovery:

The Corporation continued to offer the One Time Settlement facility to defaulting borrowers so thathard and deserving cases can be settled without recovery steps. Totally 420 cases were given one timesettlement (OTS) facility for an amount of Rs. 40.50 crores, involving a sacrifice of Rs. 118.50 croresduring the financial year. The possibility of transferring Non Performing Assets to an AssetReconstruction Company is also being explored.

Asset Quality:

The Corporation continued its efforts on reducing NPA by adopting effective strategy duringthe year. Utmost importance was given to ensure continuance of Standard Assets in the same categoryand other cases were closely monitored to prevent slippage. Efforts were made to upgrade NPAs tostandard assets. This has yielded results by bringing down the net NPA to 13.22% as against 28.62%last year, a commendable achievement by reducing NPA by 15.4%.

Asset Classification & Provisioning:

Break up of principal outstanding as on 31.03.2009 and 31.03.2008 and provision requirementthereon are given in the table below:

Category Principal Outstanding Provision

2008-09 2007-08 2008-09 2007-08

Standard 52876 35921 132 90

Substandard 6338 6126 1268 646

Doubtful – I 3558 4246 1423 1204

Doubtful – II 4162 4419 3329 3236

Doubtful – III 0 14113 0 9409

Total 66934 64826 6152 14585

(Rs. In lakhs)

Revival of Sick Units:

Corporation has rehabilitated around 400 units under revival programme and granted variousfacilities aggregating to Rs.18.90 crores during the year.

OPERATING RESULTS

Sanctions:


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Capital Adequacy Ratio:

Capital to Risk Assets ratio (CRAR) improved from 15.95 % to 36.35% as on 31.03.2009 mainly due tothe capital infusion of Rs. 150 crores by the State Government during the year under report.

ISO Certification:

All offices of the Corporation continue to hold Quality Management System Certificate awarded asper IS/ISO 9001/2000 by the Bureau of Indian Standards.

Diversification of Activities:

During the Financial Year 2007-08 the Corporation formed a panel of consultants to rehabilitatesick units. Later it was decided that help would be extended to existing, prospective and NRIentrepreneurs to solve their problems in Industry, formulate new schemes to bring their vision ordreams to reality. To implement the above idea a Consultancy Division was launched on July 5, 2008.The launching of Consultancy Division has changed the image of the Corporation from that of adevelopment Banker to the role of a facilitator. The Consultancy Division has made attempts to bringexperts from Government industries, academic institutions and other related organizations to providequality Consultancy Services.

As part of diversification of activities and to take care of the financial needs of our customers,Corporation has also taken up the sale of Mutual Funds, Insurance and Credit Rating Services.

Corporation has entered into an MoU with the New India Assurance Company Ltd. for marketingits non-life insurance policies. As per the MoU, KFC will become Corporate agent of The New IndiaAssurance Company Ltd. This would enable the clients of KFC to have credit and insurance under oneroof.

The Corporation has launched distribution of Mutal Fund products of SBI Mutual fund andLIC Mutual Fund under an MoU with these funds.

The Corporation has launched rating services by signing an MoU with M/s. Credit RatingInformation Services India Limited (CRISIL). KFC is the first SFC in India to enter into an MoU with anyrating agency. Concession in the applicable rate of interest are given to assisted units according to therating from CRISIL.

Management of Funds:

KFC has also entered into an MoU with Axis Bank for utilising their Cash Mangement Services(CMS) for effective Management of funds. The Payment of salary and all staff benefits are nowcentralized and routed through SBI Corporate salary account.

Corporate Social Responsibility:

The Corporation has registered a new Society by name “KFC-CARE” (Kerala Financial CorporationCentre for Assistance and Rehabilitation) on 08.03.2008, as per the Travancore Cochin Literary ScientificCharitable Societies Registration Act 1955. The aims and objectives of the society are to assist andempower marginalized members of the society and bring them to main stream of life by setting uprehabilitation schemes, organizing self employment schemes through entrepreneurship, providing


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medical, supportive, developmental and educational facilities and scholarships for brilliant studentsfrom the marginalized segment of Society.

In line with the decision of the Government of India to upgrade 1396 Industrial TrainingInstitutions across the country, KFC has adopted the Women’s ITI, Kozhikode to make it a Centre ofExcellence. KFC is designated as the ‘Industry Partner’ for this venture and Chairman of the InstitutesManagement Committee, which oversees matters such as selection of trainees, arranging training forthe faculty, appointment of contract / guest faculty facilitating on the job training’s development ofcurriculum, improving the infrastructure and other such matters which deems essential for thedevelopment of the institute. On completion of course, placement assistance will be given to successfulstudents, in the units financed by KFC. The vast and varied intellectual capital and other suchaccomplishments acquired by the Corporation over the past 55 years will be utilized for empoweringthe trainees and make them more employable.

RESOURCES

Share Capital:

Government of Kerala contributed a sum of Rs. 150 crores towards share capital of the Corporationduring the year under report.

Refinance from SIDBI:

The Corporation availed refinance of Rs.160 crores from SIDBI by way of Line of Credit. Repaymentsduring the year was Rs.62.57 crores. Payment towards interest and service charges to SIDBI was Rs.29.13 crores. Aggregate balance outstanding at the year end was Rs.406.34 crores.

SLR Bonds:

The Corporation redeemed SLR Bonds of Rs. 15.92 crores during the FY and balance outstanding ason 31.03.2009 was Rs.107.26 crores. An amount of Rs.0.97 crore was paid to the State Governmentas commission for guarantees extended for outstanding SLR Bonds.

Fixed Deposits:

No fresh deposits were accepted during the Financial Year. There is no balance in the fixed depositaccount.


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Employee Relationship:

Employee relationship remained cordial throughout the year.

Promotions & Training:

During the year, 58 employees were promoted to higher grades. KFC has also renderedtraining to the Officers of the Corporation to equip themselves to meet the challenges of the presentindustrial scenario of the State. 72 officers were given training in different areas, in house as well asin Institutions of repute. SIDBI has imparted a training programme on Credit Appraisal and RatingTools (CART) for employees of the Corporation. Corporation has also arranged training for its officersengaged in Mutual Fund Distribution. 40 Officers of the corporation apperaed for written test ofAMFI and all of them qualified.

Corporate Governance:

KFC is committed to the best practices in the area of Corporate Governance in letter andspirit. KFC believes that good corporate governance is much more than complying with the normsand regulations. Good governance facilitates effective management and control, maintaining a highlevel of ethics, providing natural justice and optimizing the shareholder value. Effective implementationof the philosophy of corporate governance depends upon adoption of the cardinal principles such asindependence, integrity, credibility, accountability, responsibility, fair and timely decision making etc.

KFC is committed to protect the interest of all the stakeholders and to ensure transparencyand integrity in transactions. KFC will always try to ensure accountability for performance and toachieve excellence at all levels.

Board of Directors:

The Board of the Corporation consists of members experienced in various fields as envisagedin the SFC’s Act. The Board frames the policies, guidelines etc. on various operational functions ofthe Corporation for achieving better results. Important matters like Loan Policy, Recovery Policy, HRPolicy, exposure limits to various industry segments, Cash Flow, Annual Business Plan vis-a vis targets,financial position statements, NPA position etc. were regularly reviewed by the Board and appropriatedirections were given. As directed by SIDBI, calender of items as per the format given are placed inevery Board to enable a meaningful review of operations. Chairman is nominated by SIDBI andManaging Director is appointed by the Government of Kerala. Two directors are nominated by SIDBIand two directors are nominated by Government of Kerala. LIC of India and State Bank of Travancorehave nominated one director each.

The term of office of the directors representing private shareholders expired and ShriA.C.S.Warrier and Shri N.Rajkumar ceased to be directors. Shri K.Sathianandan and Shri K.M.Nairwere replaced by SIDBI and Shri A.Vikraman and Shri Namgial were nominated. SBT nominated ShriNarasimha Rao in place of Shri A.K.Basu and subsequently nominated Shri. S.L.Hariharan in place ofShri. V. Narasimha Rao.

As on March 31, 2009, the Board of Directors of the Corporation consisted of 8 members, allof whom were Non Executive Directors except Managing Director with whom the day-to-day affairsare entrusted.

Human Resources


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1 Prof. Sushil Khanna Chairman 3 From 20.03.07

2 Dr.M.P.Sukumaran Nair Director 4 From 06.07.07

3 Dr. Krishna Kumar Director 2 From 30.07.07

4 Shri K.M.Nair Director 3 Upto 20.10.08

5 Shri Namgial Director 0 From19.11.08

6 Shri K.Sathianandan Director 0 Upto 22.05.08

7 Shri A.Vikraman Director 4 From 25.05.08

8 Shri A.K.Basu Director 0 Upto 30.05.08

9 Shri V.Narasimha Rao Director 0 Upto 02.07.08

10 Shri S.L.Hariharan Director 2 From 10.10.08

11 Shri K.Swaminathan Director 2 From 30.07.07

12 Dr.P.T.Nandakumar IPS Managing Director 4 From 25.04.07

Name of the DirectorNo. of Board meetings

attended during2008-09

Position Tenure

The Executive Committee met 2 times during the year.

The Corporation has reconstituted Audit Committee with nominees of State Government,SIDBI and SBT to ensure Corporate Governance. The State Government order in this connection videG.O. No.13883/BPE.2/08/Plg dated 15.11.08 has been complied by the Corporation.

The last Annual General Meeting was held on July 25th, 2008 at the Corporate office atThiruvananthapuram. An Extra Ordinary General Meeting was held on 20th March, 2009 for approvalof adjustment of accumulated loss against the paid up share capital.

Details of the Annual General Meetings (AGM) and Extra Ordinary General Meetings (EGM)during the year are as under:

1 Prof. Sushil Khanna Chairman 2

2 Dr. M.P.Sukumaran Nair Director 1

3 Shri.A. Vikraman Director 2

4 Dr. P.T.Nandakumar IPS Managing Director 2

Name of the Director PositionNo. of Committeemeeting attendedduring 2008-09

Number of Meetings:

The Board of Directors of the Corporation met four times during the year

The details of attendance of each Director are furnished below:

Sl.No.

Sl.No.


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AGM / EGM Date Venue Directors present

AGM 25.07.08 Head Office 4

EGM 20.03.09 Head Office 2

Directors’ Responsibility Statement:

The Board of directors confirm that in the preparation of Profit and Loss Account for the year endedMarch 31, 2009 and the Balance Sheet as at that date:

i) The applicable guidelines prescribed by SIDBI have been followed and there has been nomaterial departure. Accrual method of accounting is being followed from 2005-06.

ii) That the Directors selected such accounting policies which would give a true and fair view ofthe state of affairs of the Corporation at the end of the financial year and of profit / loss ofthe Corporation for the year under review.

iii) That the Directors have taken sufficient care for maintenance of accounting records.

iv) The accounts for the year ended March 31, 2009 have been prepared on a going

concern basis.

Right to Information

The Corporation has designated State Public information Officers, Assistant State PublicInformation Officers and Appellate Officers for the Head Office as well as all the Branch Offices. Atotal number of 167 petitions were received under the RTI Act during the year. Prompt action isbeing taken on the petitions received under RTI Act, 2005.

Auditors:

M/s. Sasi, Vijayan & Rajan., Chartered Accountants were re-appointed as Statutory Auditors of theCorporation for the financial year 2008-09, in the 55th Annual General Meeting on the same termsand remuneration as advised by RBI. The Comptroller & Auditor General of India conducted audit ofthe accounts of the Corporation up to the F.Y 2007-08.

Shareholder information:

The composition of shareholders as on March 31, 2009 is furnished below:

Government of Kerala 19782.51 96.94

SIDBI 613.33 3.01

LIC 7.10 0.03

SBT 2.10 0.01

Others 0.96 0.01

Total 20406.00 100.00

Shareholdrs Rs. In Lakhs % of Shareholding


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Way Ahead:

As part of diversification of activities and to take care of the financial needs of its customersand to evolve as a one stop Financial Supermarket, the Corporation will offer a wide array of financialsolutions. The activities of consultancy division will be strengthened to boost the other income. Theseactivities include valuation of assets, feasibility studies, rehabilitation and revival of sick units, trainingprogrammes, sale of mutual fund, insurance products, rating services etc.

For better organization of work, optimal use of available resources is required. The cornerstone of productivity will be centered on human technology interface. With technology as the keyenabler for achieving the organizations goals in the changing environment, Corporation will implementa centralized IT solution connecting Branch Offices and Head Office. This will help in centralized accessof accounts, monitoring of lending process, NPA Management and anywhere branch operations. TCShas been shortlisted for implementing the project and HCL has been short listed for implementing theNetwork and Connectivity. The web site of the Corporation has been revamped and customers will beprovided online access of their accounts. E-mail ID for all officers has been provided and thecommunication flow through e-mail is encouraging. Old Computers have been replaced with ThinClients. Efforts are on for digitalizing the records to be preserved.

Corporation recognizes that key resources for achieving high levels of excellence are itspeople who need to be motivated and developed. Revamping of HR policy and staff restructuring ison the anvil. To fill in the vacancies arising by retirements and gaps in skills and expertise in new areasof work, need based recruitment of professionals will be done. Training programmes will be conductedfor employees to empower them to face the new challenges.

Acknowledgement:

The Directors wish to place on record their appreciation to the Government of Kerala, ReserveBank of India, Small Industries Development Bank of India, Kerala State Industrial DevelopmentCorporation Ltd., other SFCs, COSIDICI, SBI Mutual Fund, LIC Mutual Fund, New India AssuranceCompany Ltd. CRISIL, Axis Bank, SBI, IDBI Bank, Federal Bank and customers for their continuedsupport, guidance and assistance. The Board appreciates the entrepreneurs and the business communityof the State for reposing confidence in the Corporation.

The Board would like to place on record their appreciation and gratitude to all the membersof the Board of Directors of the corporation, existing as well as retired, who had guided the successfulmanagement of the Corporation during the period. The Board place on record its appreciation forthe very good efforts put in by all the employees and officers of the Corporation. Last, but not theleast, the shareholders deserve a special mention for their continued support.

For and on behalf of the Board,

CHAIRMAN

Thiruvananthapuram,20.06.2009

sd/-


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AUDITOR’S REPORTTO THE SHARE HOLDERS OF KERALA FINANCIAL CORPORATION

We have audited the attached Balance Sheet of Kerala Financial Corporation as at 31st March, 2009and the Profit & Loss Account for the year ended on that date in accordance with the provisionscontained in section 37 of the State Financial Corporation Act, 1951. These financial statements arethe responsibility of the Corporation’s management. Our responsibility is to express an opinion onthese financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement(s). An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and the significant estimates made by the management,as well as evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

Subject to our comments as reported below.

1 Other Liabilities shown in the Balance Sheet includes State subsidy of Rs. 42,98,644.00 which islong pending for adjustment. In our opinion, the amounts are to be set off against the loansgranted by the Corporation resulting in overstatement of liabilities as well as loans (assets) to thisextent.

2. The Fixed Assets register maintained by the Corporation does not show the quantitative details,location, custodian and situation of fixed assets.

3. The balance of Loans & Advances as per General Ledger and Subsidiary Ledger shows anunreconciled difference of Rs. 19,31,93,902.00. To that extent it affects the true and fair view ofthe state of affairs of the Corporation.

4. The Corporation has not complied with the disclosure requirements of taxes on Income inaccordance with AS 22.

We report that:

a) The balance sheet read with significant accounting policies and the notes thereon is a true andfair balance sheet containing the necessary particulars and is properly drawn up so as to exhibit atrue and fair view of the affairs of the Corporation as at 31st March 2009.

b) The profit and loss account read with significant accounting policies and the notes thereonshows a true balance of profit for the year ended 31st March 2009.


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c) We have obtained all the information and explanations, which to the best of our knowledgeand belief were necessary for the purposes of our audit and have found them to be satisfactory.

d) The transactions of the Corporation that have come to our notice have been within thepowers of the Corporation.

e) The returns received from the branches of the Corporation have been found adequate for thepurposes of our audit.

f) The operations of the Corporation have been conducted in accordance with the provision ofthe SFC Act, 1951.

g) The income recognition, asset classification and provisioning have been done as per the guidelinesissued by the RBI/SIDBI from time to time.

h) The investment of surplus funds is made in accordance with the prudential norms laid downby the Board of Directors.

For M/s. Sasi Vijayan & RajanThiruvananthapuram Chartered Accountants20.06.2009

CA. G. Dileep Kumar F.C.A. Partner, M. No. 104319


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KERALA FINANCIAL CORPORATION, THIRUVANANTHAPURAMBALANCE SHEET AS AT 31-03-2009

Year ended Year endedLIABILITIES SCHEDULE 31-03-2009 31-03-2008

Rs. Rs.

Authorised capital 3500000000 2000000000

Issued, subscribed & paid up capital 1 740600300 1590641500

Advance for shares 2 1300000000 0

Reserve fund and other reserves 3 335602607 335602607

Bonds and debentures 4 1072610000 1231760000

Fixed deposits 0 1243000

Other borrowings 5 4063408110 3089354838

Subvention 25147740 25147740

Other liabilities 6 96447331 292317366

Provisions 7 665864 51730631

Profit & loss account 117007510 0

TOTAL 7751489462 6617797682

Year ended Year endedASSETS SCHEDULE 31-03-2009 31-03-2008

Rs. Rs.Cash & bank balances 8 1413061804 233198037Loans & advances 9 5898179492 5082626088Debentures & shares 10 16775000 18925000Fixed assets 11 25768112 28595867Dividend deficit 57906120 57906120Other assets 12 339798934 146505364Profit & loss Account 0 1050041206Significant accounting policies 20Note on accounts 21Disclosure statement 22TOTAL 7751489462 6617797682

Dr. P.T. Nandakumar, IPS Dr. M.P. Sukumaran Nair Sabu ThomasManaging Director Director Financial Controller

Vide our report of even date attachedFor M/s. Sasi Vijayan & Rajan


Thiruvananthapuram20-06-2009

CA. G. Dileep Kumar F.C.A.Partner, M.No. 104319


20

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31-03-2009

INCOME SCHEDULE Year ended Year ended

31-03-2009 31-03-2008

Rs. Rs.

Interest income 13 1019210666 829277713Other income 14 73406223 54003423TOTAL A 1092616889 883281136

EXPENDITURE

Interest on borrowings 15 404663008 378305804Fund raising expenses 16 9846863 11826206Employee expenses 17 240822063 236159122Establishment expenses 18 11980795 12000290Miscellaneous expenses 19 9153621 14929556Depreciation 3335653 3816119Bad debts written off 1175771153 329145422 TOTAL B 1855573156 986182519Operating profit / loss (-) (A-B) C -762956267 -102901383Less provisions:Provision for Income Tax 0 29163510Provision for Fringe Benefit tax 650000 650000Wealth Tax / FBT 7309 11616Provision for EL Encashment Liability 0 17796282Additional Provision for Bad & Doubtful Debts 0 131005207TOTAL D 657309 178626615Net Profit (+) / Loss (-) for the year (C-D) E -763613576 -281527998Add: NPA Provision written Back 843260792 0Add: Provision for EL Encashment Liability Written Back 51080631 0Add: Prior Period Income 261715 0Less: Prior Period Expenses 13982046 0Balance Profit (+) / Loss (-) 117007516 -281527998Balance in Profit & Loss Account b/f -1050041206 -768513208Less: Set off against share capital 1050041200 0Balance Profit (+) / Loss (-) carried to B/S 117007510 -1050041206

KERALA FINANCIAL CORPORATION, THIRUVANANTHAPURAM







21

SCHEDULES FORMING PART OF THE BALANCE SHEETAS AT 31-03-2009

SCHEDULES Year ended Year ended31-03-2009 31-03-2008

Rs. Rs.

SCHEDULE : 1 AUTHORISED CAPITAL

3,50,00,000 shares of Rs.100 each 3500000000 2000000000

Issued, Subscribed and Fully Paid up Capital

Ordinary Shares

1,54,66,665 shares of Rs.100/- each as per last B/S 1546666500 1546666500

20,00,000 shares of Rs.100/- each allotted during the year 200000000 0

1,74,66,665 shares of Rs.100/- each 1746666500 1546666500

Less: 105,00,412 shares set off against Accumulated Loss 1050041200 0

69,66,253 shares of Rs.100/- each 696625300 1546666500

Special Shares

4,39,750 special shares of Rs.100/- each as per last B/S 43975000 43975000

TOTAL 740600300 1590641500

SCHEDULE : 2 ADVANCE FOR SHARES

As per last Balance Sheet 0 0

Add: Receipts during the year 1500000000 0

Less: Allotted during the year 200000000 0

TOTAL 1300000000 0

SCHEDULE : 3 RESERVE FUND & OTHER RESERVES

(a) Reserve u/s 36(1) (viia) of IT Act, 1961


Added during the year 0 0

Total of (a) 27096311 27096311

(b) Special Reserve u/s 36(1)(viii) of IT Act, 1961


Added during the year 0 0

Total of (b) 283506296 283506296

(c) Spl. Reserve u/s 35(A) of SFCs Act, 1951 25000000 25000000

TOTAL {(a)+(b)+(c)} 335602607 335602607


22

SCHEDULE 4 - BONDS (GUARANTEED BY GOVT. OF KERALA u/s 7 OF THE SFC's Act, 1951)

Sl. Date of issue Name of Amount Amount Interest Redemption No. the series outstanding on outstanding on Rate % Date

31-03-09 31-03-08Rs Rs

1 21-06-88 2008(I) 0 63000000 11.50 21-06-08

2 14-11-88 2008(II) 0 28000000 11.50 14-11-08

3 08-02-89 2009(I) 0 34750000 11.50 08-02-09

4 15-02-99 2009(IV) 0 33400000 12.50 15-02-09

5 26-06-89 2009(II) 39950000 39950000 11.50 26-06-09

6 23-10-89 2009(III) 37500000 37500000 11.50 23-10-09

7 15-01-90 2010(I) 20250000 20250000 11.50 15-01-10

8 07-06-00 2010(IV) 113700000 113700000 10.52 07-06-10

9 26-06-90 2010(II) 27000000 27000000 11.50 26-06-10

10 27-06-00 2010(V) 9000000 9000000 11.33 27-06-10

11 13-11-90 2010(III) 34250000 34250000 11.50 13-11-10

12 13-02-91 2011(I) 16500000 16500000 11.50 13-02-11

13 28-03-01 2011(III) 163660000 163660000 10.50 28-03-11

14 28-06-01 2011(IV) 26340000 26340000 9.90 28-06-11

15 02-09-91 2011(II) 39250000 39250000 11.50 02-09-11

16 20-12-01 2011(V) 26500000 26500000 8.35 20-12-11

17 08-01-92 2012(I) 31500000 31500000 12.00 08-01-12

18 02-12-92 2012(II) 14750000 14750000 12.00 12-02-12

19 20-02-02 2012(III) 227160000 227160000 8.30 20-02-12

20 25-07-02 2012(iv) 110000000 110000000 7.90 25-07-12

21 26-03-03 2013(i) 135300000 135300000 6.80 26-03-13

TOTAL 1072610000 1231760000


23

SCHEDULE : 5 BORROWINGS Year ended Year ended31-03-2009 31-03-2008

SIDBI 4063408110 3089354838TOTAL 4063408110 3089354838

SCHEDULE : 6 OTHER LIABILITIES

State Subsidy 4298644 4020779Margin Money 0 4484595Subsidy For SC/ST from KSDC 0 103227Insurance Claims Received 25180 0Earnest Money Deposit 2590000 3550000Interest Subsidy 0 581240Advance Received for sale of units 1464177 861459Self Employment Venture fund 2648000 2648000Other Salary Deductions 0 35956Suspense Account 201768 9056721Other Sundry Deposits 2087816 2098227Gratuity Payable 0 350000Servicetax 7478 185OTS Pending Appropriation 7227033 99788621Outstanding Expenses 1119309 1433215Salary payable 141462 0Pay Revision Arrears Payable 0 81302809RR Collection Pending Appropriation 14053066 28895081Accrued Interest on Refinance from SIDBI 27724545 22401395Accrued Interest on SLR Bonds 16911852 21469148Accrued Interest on Fixed Deposits 0 52902Audit Fee Payable 55150 56180Concurrent Audit Fee payable 215378 125936Contingent Provision against Standard Assets 13239904 9001575Tax Deducted at Source 0 115Staff Dues Retained 2336569 0Sundry Creditors 100000 0TOTAL 96447331 292317366


24

SCHEDULE : 7 PROVISIONS Year ended Year ended31-03-2009 31-03-2008

(a) Provision for Taxation:As per last Balance Sheet 0 212632813Add: Provision made during the year 0 29163510Less: Amount set off against Advance Incometax 0 241796323Total of (a) 0 0(b) Provision for Fringe Benefit TaxAs per last Balance Sheet 15864 0Add: Provision made during the year 650000 650000Total of (b) 665864 650000(c) Provision for EL encashment liability:As per last Balance Sheet 51080631 33284349Add: Provision made during the year 0 17796282Less: Provision written back 51080631 0Total of (c) 0 51080631TOTAL 665864 51730631

SCHEDULE : 8 CASH & BANK BALANCESCash in hand 1975845 6556651Banks Current Accounts 1351085959 111750799Banks Deposit Accounts 60000000 114890587TOTAL 1413061804 233198037

SCHEDULE : 9 LOANS & ADVANCES

Loans and Advances 6500188432 6532134149Less:Provision for Bad & Doubtful Debts 602008940 1449508061TOTAL 5898179492 5082626088

SCHEDULE : 10 INVESTMENT IN SHARES

Keltron Counters Ltd. 146750 146750Kerala Spinners Ltd. 200000 200000Kerala Rubber & Reclaims Ltd. 150000 150000Vanjinad Leathers Ltd. 491120 491120KITCO 29000 29000India SME Asset Reconstruction Co. 350000 0Kerala Venture Capital Fund 16425000 18925000Sub-total 17791870 19941870Less : Provision for diminution in value 1016870 1016870TOTAL 16775000 18925000

KF

C A

nn

ual R

ep

ort - 2

00

8-0

9

25

SCHEDULE 11 - FIXED ASSETS

Particulars Rate % Cost as on Additions Deletions Cost as on Depreciation Depreciation Depreciation WDV as on WDV as on31-03-2008 during the during the 31-03-2009 upto for the upto 31-03-2009 31-03-08

year year 31-03-2008 year 31-03-2009

Land 0 1161634 0 0 1161634 0 0 0 1161634 1161634

Building 10 40685958 0 914571 39771387 22844003 1318213 24162216 15609171 17841955

Motor Vehicle 15 10877153 907425 717332 11067246 8607610 360408 8968018 2099228 2269543

Cycles 15 23679 0 0 23679 18068 842 18910 4769 5611

Electrical Fittings 10 3812801 3240 0 3816041 2843474 97095 2940569 875472 969327

Air Conditioner 15 2305487 30000 0 2335487 1949830 56724 2006554 328933 355657

Transformer 15 236000 0 0 236000 235567 65 235632 368 433

Photocopier 15 1821531 0 0 1821531 1425291 59436 1484727 336804 396240

Duplicator 15 168022 0 0 168022 166248 266 166514 1508 1774

Franking Machine 15 3397 0 0 3397 3396 0 3396 1 1

Computer 60 16683706 1139510 0 17823216 15964451 920505 16884956 938260 719255

Typewriters 15 621644 0 0 621644 612561 1362 613923 7721 9083

Other office Equipments 15 3059826 31301 0 3091127 2505734 87276 2593010 498117 554092

Other Furniture 10 11751388 28325 0 11779713 7440126 433461 7873587 3906126 4311262

TOTAL 93212226 2139801 1631903 93720124 64616359 3335653 67952012 25768112 28595867

TOTAL (Previous Year) 90749243 2479610 16627 93212226 60800240 3816119 64616359 28595867 29949003

In Rupees


26

SCHEDULE : 12 OTHER ASSETS Year ended Year ended31-03-2009 31-03-2008

Advance Income Tax 28528384 28528384Tax Deducted at source 2441981 1346340Advance Fringe Benefit Tax 572764 611140Property Acquired in Satisfaction of Claims 40000000 600928House Loans to Employees 54607739 37066308Conveyance Loan to Employees 8649611 6657246Computer Loan to Employees 1321592 1543282Other Staff Loan 0 2600Advance to Employees 809438 648327Advance for Fixed Assets 325787 0Deposit with P&T 18500 78187Other Deposits 1107304 1535757Stock of Stationery 1 1Library 1 1Suspense 0 1507299Deposit with KSEB 702046 702046Interest Accrued on Loans & Advances 145786000 12993494Interest accrued on Special TSB A/c 508978 235864Interest Accrued on STD with Banks 8602 1250144Rebate on Refinance / LOC receivable 406825 621637Interest Accrued on Staff Loans 51666812 50576379Deposit against Staff Dues Retained 2336569 0TOTAL 339798934 146505364SCHEDULE 13 : INTEREST INCOMEInterest Received On Loans & Advances 1040698075 842971572Less: Interest Rebate allowed on Loans 21487409 13693859TOTAL 1019210666 829277713SCHEDULE 14 : OTHER INCOMEInterest on Bank Deposits 13496748 21734664Interest on Staff Loans 5956971 3644281Sale of Application Forms 103170 76225Loan Processing Fees 15959780 11378992Dividend From Shares 4350 4350Miscellaneous Income 520794 7134122Other Income 5105495 0Premium on pre-closure 3051190 659356Profit on sale of Fixed Assets 187555 20473Profit on Sale of Property Acquired 18878424 3641899Rent Received 5241468 4832302Rebate on Refinance Received 3428435 621637Income from Insurance Agency 5266 0Servicetax Income 152851 252896RTI Application Fee Received 1249 2226Income from Mutual Fund 1281780 0Consultancy Service Division Receipts 30697 0TOTAL 73406223 54003423


27

SCHEDULE 15 : INTEREST ON BORROWINGS Year ended Year ended31-03-2009 31-03-2008

Interest on Bonds 112368451 137105516Interest on Fixed Deposits 10398 73722Interest on Refinance from IDBI / SIDBI 291301717 240930959Interest on Line Of Credit 982442 195607TOTAL 404663008 378305804

SCHEDULE 16 : FUND RAISING & FINANCIAL EXPENSES

Guarantee Commission 9762370 11739530Bond Issue Expenses 84493 86676TOTAL 9846863 11826206

SCHEDULE 17 : EMPLOYEES' EXPENSES

Pay & Allowances 137183012 194966682Contribution to Employees' P.F and Premium for Gratuity andother terminal Benefits 99101719 37566063Other Staff Expenses 4537332 3626377TOTAL 240822063 236159122

SCHEDULE 18 : ESTABLISHMENT EXPENSESRent, Rates, Taxes & Insurance 6629853 5792478Postage, Telegram and Telephone 1575694 1662743Printing & Stationery 1207585 951689Vehicle Running & Maintenance 1368986 1645401Repairs & Maintenance of Buildings & Equipments 1198677 1947979TOTAL 11980795 12000290

SCHEDULE 19 : MISCELLANEOUS EXPENSES

Bank Charges and Commission 90361 262799Audit Fees 55150 56180Consultancy Charges 302807 524028Legal Expenses 438666 700839Books & Periodicals 100492 143254Conference & Seminars 100525 504762Publicity & Advertisement 481718 984733Other Expenses 4386683 9369742Loss on sale of Property Acquired 0 139250Travelling Expenses 1844850 1324900Board / E.C. Meeting Expenses 610642 475765Concurrent Audit Fee 506419 434245Banking Cash Transaction Tax 7567 9059Servicetax paid 227741 0TOTAL 9153621 14929556


28

Particulars AmountRs. in lakhs

Cash Flow from operating activities:

Interest and other revenue receipts 9454

Interest and other financial charges paid (4139)

Payment to employees and Administrative Expenses (3575)

Operating profit before changes in operating assets 1740

Increase in operating assets (Loans & Advances) (11439)

Net Cash from operating activities before income tax (9699)

Income tax paid -

Net Cash from operating activities after tax (9699)

Cash Flow from Investment Activities:

Interest received on deposits 145

Purchase of Fixed Assets (21)

Proceeds from Sale of Fixed Assets 16

Increase in other assets (Net) (566)

Decrease in other liabilities (Net) (1215)

Net Cash from Investment Activities (1641)

Cash Flow from Financing activities:

Share Capital from State Government 15000

Long term borrowings (Refinance from SIDBI) 16000

Repayment of Long Term Borrowings (7861)

Net Cash used in financing activities 23139

Net increase in Cash or Cash equivalent 11799

Cash and Cash equivalent at the beginning of the Financial Year 2332

Cash and Cash equivalent at the end of the financial year 14131

Cash Flow Statement for the Financial Year ended 31.03.2009







29

Method of Accounting:

The Corporation is following accrual system of accounting with the exception of recognition of incomein respect of Non-Performing Assets. (AS 1)

Revenue Recognition:

The amounts received from loanee concerns are apportioned based on the priority of other expensesincurred on behalf of the borrowers and thereafter towards interest dues and lastly towards principal.However, in the case of One Time Settlement (OTS) and sale of units taken over u/s 29 of the SFC,s Act,1951, Revenue Recovery proceedings and Section 32(G), the receipts are apportioned in the order ofother expenses incurred on behalf of the borrowers, principal amount of loan and lastly towardsinterest dues. (AS 9)

Retirement Benefits:

The Corporation contributes to the Provident Fund which is administered by duly constituted andapproved independent trust by name KFC Employees Provident Fund Trust and such contributions arecharged to revenue every year. Gratuity liability of employees is covered under the approved GroupGratuity Scheme of LIC of India. The contributions are made according to the actuarial valuationsconducted by LIC of India. Contributions paid under the scheme are charged to revenue. The liabilityfor terminal encashment of earned leave to the employees is covered under the Group Leave EncashmentScheme of LIC of India and the contributions paid under the scheme are charged to revenue. (AS 15)

Provisioning Norms:

In accordance with the guidelines of RBI / SIDBI on asset classification, the Corporation has classifiedall loans and advances into Standard, Sub Standard, Doubtful and Loss category and the provisioningis made as under.

Fixed Assets:

Fixed Assets are carried at cost of acquisition less depreciation. Depreciation on fixed assets has beenprovided for on written down value method and at the rates prescribed under the Income Tax Act,1961. (AS 6)

Category of assets Provision %Standard Assets 0.25Sub Standard Assets 20.00Doubtful Category I 40.00Doubtful Category II 80.00Doubtful Category III 100.00Loss Assets 100.00

SCHEDULE 20 - ACCOUNTING POLICIES







30

SCHEDULE 21 - NOTES ON ACCOUNTS

1. Provision for Non-performing assets and Standard assets as on 31-03-2009 is made in accordancewith the guidelines on asset classification and provisioning norms issued by SIDBI up to31-03-2009.

2. The authorized share capital was enhanced from the existing level of Rs. 20000 lakhs toRs. 35000 lakhs at the Special General Meeting held on 20-03-2009 with the prior approval ofthe State Government.

3. The Government of Kerala sanctioned an additional sum of Rs. 13,000 lakhs to the Corporationtowards ordinary share capital on 30-03-2009 to be utilized for writing off the accumulated lossand thereby enable the Corporation to achieve financial health and better performance. The saidsum of Rs. 13000 lakhs is shown under advance for ordinary shares in the Balance Sheet. As partof the financial restructuring proposal, it was decided to wipe out accumulated loss of Rs. 10,500.41lakhs against the share capital of all the share holders proportionately. Reduction in paid up sharecapital to the extent of accumulated loss of Rs. 10,500.41 lakhs as on 31-03-2008 was approvedat the Special General Meeting held on 20-03-2009 as required u/s 4E (2) (b) of the SFC’s Act,1951. Accordingly, the reduction of paid up share capital was carried out by reducing the numberof shares proportionately.

4. The investment with Kerala Venture Capital Fund amounting to Rs. 164.25 lakhs is in the natureof long term equity subscription.

5. Bad Debts written off amounting to Rs. 11,757.71 lakhs relates to write off of loans under OneTime Settlement Scheme (OTS) amounting to Rs. 321.74 lakhs and write off of loans underDoubtful Assets III category amounting to Rs. 11,435.97 lakhs. As part of the financial restructuringproposal, it was decided to write off loans under Doubtful Assets III category and to write backthe excess provision already made. Accordingly a sum of Rs. 8,432.61 lakhs has been writtenback.

6. Break-up of Contribution to Provident and other funds Rs. 973.33 lakhs is as under:Contribution to Staff PF : Rs. 125.32 lakhsGratuity Contribution : Rs. 502.53 lakhsGroup Leave Encashment contribution : Rs. 345.48 lakhs

7. Income tax returns have been filed up to Assessment Year 2008-09 and assessments have beencompleted up to Assessment Year 2006-07. Appeals filed by the Corporation for the AssessmentYear 1995-96 is pending before High Court of Kerala and for the Assessment Year 2003-04 ispending before ITAT and for the Assessment Years 2004-05 and 2006-07 are pending before CIT(Appeals). Appeals filed by the Income tax Department for the Assessment years 2001-02 and2005-06 are pending before ITAT. ITAT had remitted the case to CIT (Appeals) for the AssessmentYears 1995-96 1999-2000 and 2002-03.

8. Sale Tax returns have been filed up to Assessment Year 2004-05 and assessments have beencompleted up to Assessment Year 2003-04. For the Assessment Years 1996-97 and 1997-98,Sales Tax Appellate Tribunal had remanded the case to the assessing officer, which is pending.


31

9. In the opinion of the management, there is no material impairment of the fixed assets of theCorporation. Hence the fixed assets have been carried at WDV in the books. (AS 28)

10. The Corporation operates as a single unit with a single profit centre and has concentrated itsactivity on term lending only on a single product.

11. The Corporation has prepared a cash flow statement for the year as per AS 3.

12. The amount received from Govt. of Kerala for payment of dividend guaranteed by it to shareholdersin earlier years in the absence of profits have been shown on the liability side of the Balance Sheetunder the head “Subvention” as the amount is repayable to the State Government.

13. Dividend Deficit account shown on the asset side of the Balance Sheet represents guaranteeddividend paid to the shareholders in the years where the profits were inadequate for payment ofdividend.

14. Contingent liability is estimated as under:

(a) on account of suits filed against the Corporation: Rs. 119.76 lakhs.(b) on account of Income tax: Rs. 1394.74 lakhs.

15. Previous year’s figures have been regrouped and reclassified wherever found necessary.







32

SCHEDULE 22 - DISCLOSURE REQUIREMENTS

Increase in CRAR is due to the receipt of share capital of Rs. 130 crore in March 2009.

(Amount Rs. in lakhs)

B. Asset Quality and Credit Concentration: Amount % %a) Percentage of Net NPAs to Net Loans and Advances. 8037.53 13.22 28.68b) Amount and percentage of Net NPAs under

the prescribed asset classification categories 1. Sub Standard Assets 5070.25 8.34 5480 2. Doubtful Assets I 2134.97 3.51 3042 3. Doubtful Assets II 832.31

1.37 5888 4. Doubtful Assets III 0.00 Total 8037.53 13.22 14410c) Amount of provision made during the Year

towards Standard Assets, NPAs, Investments(Other than those in the nature of advance) Income Tax, etc.

2008-09 2007-08 1. Provision for Standard Assets 132.40 90 2. Provision for NPA 6020.09 14495 3. Provision for Investments 0 Nil 4. Provision for Income Tax 0 0d) Movement in Net NPA (%) 2008-09 2007-08 Variance 1. Sub Standard Assets 8.34 10.91 -2.57 2. Doubtful Assets – I 3.51 6.06 -2.55 3. Doubtful Assets – II 1.37

11.71 -10.34 4. Doubtful Assets - III 0.00TOTAL 13.22 28.68 -15.46

A. Capital: 2008-09 2007-08a) CRAR (%) 36.35 15.95b) The amount of subordinated debt raised and Nil Nil Outstanding as Tier II Capitalc) Risk Weighted Assets 1) On Balance Sheet items 63036 55099 2) Off Balance Sheet items Nil Nild) Share holding pattern as on the date of the Balance Sheet (31-03-2009)

Amount % % 1. Government of Kerala (including advance) 19782.50 96.94 90.53 2. SIDBI 613.33 3.01 9.32 3. Commercial Banks, Insurance Companies, 10.17 0.05 0.15 Private Shareholders etc. TOTAL 20406.00 100.00 100.00

e) Net worth 21576 5406


33

C. Liquidity:

a) Maturity pattern of Rupee assets.b) Maturity pattern of foreign currency assets.

Items Less than More More More More than More than Totalor equal than 1 than 3 than 5 7 years up 10 yearsto 1 year year up years up years up to 10

to 3 years to 5 years to 7 years years

Rupees Assets 125.40 596.66 5678.09 6659.49 19351.13 34485.12 66895.89

Foreign Currency Assets 0 0 0 0 0 0 0

Total assets 125.40 596.66 5678.09 6659.49 19351.13 34485.12 66895.89

Rupees Liabilities 11139.26 22406.20 13298.30 3564.64 951.78 0.00 51360.18

Foreign currency liabilities 0 0 0 0 0 0 0

Total Liabilities 11139.26 22406.20 13298.30 3564.64 951.78 0.00 51360.18

D. Operating Results: 2008-09 2007-08

a) Interest income as a percentage to average working funds - 15.10 13.76Interest Income 10386.65 8546.57Average Working Funds 68804.12 62097.29

b) Non-interest income as a percentage to Average Working Funds - 0.78 0.46Non-interest income 539.52 286.24Average Working Funds 68804.12 62097.29

c) Operating Profit (+) / Loss (-) as a % to Average Working Funds - -11.09 -1.66Operating Profit (+) / Loss (-) -7629.56 -1029.01Average Working Funds 68804.12 62097.29

d) Return on Average Assets - -11.51 -1.75Returns (operating profit / Loss + depreciation) -7596.20 -990.85Average Assets 66017.17 56677.45

e) Net profit (+) / Loss (-) per employee 4.33 -9.95No. of employees 270 283Net profit (+) / Loss (-) 1170.08 -2815.28






We Finance your dream

...

34

DURING THE YEAR 2008-2009 SINCE INCEPTION UPTO 31-03-2009

SSI OTHERS TOTAL SSI OTHERS TOTAL

No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount

1. Application pending as on 1-4-2008 5 377.75 13 3280.00 18 3657.75 0 0 0 0 0 0

2. Application received during 2008-09 202 8716.68 399 34625.43 601 43342.11 29376 216239.08 19286 251486.89 48662 467725.97

3.Total Application for consideration 207 9094.43 412 37905.43 619 46999.86 29376 216239.08 19286 251486.89 48662 467725.97

4.Application withdrawn/rejected or

otherwise disposed off 13 2603.05 6 6745.72 19 9348.77 5075 56425.76 1113 39695.93 6188 96121.69

5.Application Sanctioned(GROSS) 192 6491.38 404 31159.71 596 37651.09 24301 159813.32 18173 211790.96 42474 371604.28

6.A. Application cancelled or reducedout of current year's sanction 1 24.14 2 312.63 3 336.77 0 0.00 0 0.00 0 0.00

B. Application cancelled/reduced out of previous year sanction 6 432.35 11 1971.39 17 2403.74 0 0.00 0 0.00 0 0.00

C. Total cancellation/reduction (6A+B) 7 456.49 13 2284.02 20 2740.51 1970 8932.78 684 6521.19 2654 15453.97

7. Application sanctioned Effectively(5-6A) 191 6467.24 402 30847.08 593 37314.32 0 0.00 0 0.00 0 0.00

8 Net Sanctions(5-6c) 185 6034.89 391 28875.69 576 34910.58 22331 150880.54 17489 205269.77 39820 356150.31

9. Amount Disbursed along with number of newly assisted units 158 6208.54 307 23130.72 465 29339.26 22385 126823.33 16521 157334.63 38906 284157.96

10.Application pending sanction as on 5 1270.00 6 1360.00 11 2630.00 at the end of the period

SUMMARY OF LOAN OPERATIONS AS ON 31.03.2009

PROFORMA - I

(Rs. in lakhs)

KF

C A

nn

ual R

ep

ort - 2

00

8-0

9

35

APPLICATION RECEIVED GROSS SANCTION SANCTION CANCELLED-REDUCED

DISTRICTS S.S.I. OTHERS TOTAL S.S.I. OTHERS TOTAL S.S.I. OTHERS TOTAL

Name No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount

THIRUVANANTHAPURAM 7 343.25 48 4744.33 55 5137.58 7 333.25 49 4670.26 56 5003.51 0 0.00 0 0.00 0 0.00

KOLLAM 14 616.00 27 1760.00 41 2376.00 14 522.50 27 1450.46 41 1972.96 0 0.00 0 0.00 0 0.00

PATHANAMTHITTA 10 770.50 6 516.00 16 1286.50 9 538.25 6 492.90 15 1031.15 0 0.00 0 0.00 0 0.00

KOTTAYAM 3 87.70 14 1473.60 17 1561.30 3 76.90 14 1072.35 17 1149.25 0 0.00 0 0.00 0 0.00

ALAPPUZHA 13 1463.00 28 4478.84 41 5941.84 9 339.25 25 2024.28 34 2363.53 0 0.00 0 2.55 0 2.55

THODUPUZHA 2 33.60 21 1235.75 23 1269.35 2 33.60 22 1485.75 24 1519.35 0 0.00 0 0.00 0 0.00

ERNAKULAM 18 799.30 61 6970.22 79 7769.52 15 665.00 56 6527.40 71 7192.40 0 0.00 0 0.00 0 0.00

PERUMBAVOOR 23 713.05 25 2030.00 48 2743.05 23 599.35 25 1961.25 48 2560.60 0 1.09 0 0.00 0 1.09

TRISSUR 23 1139.63 41 3902.15 64 5041.78 22 1052.13 41 3414.30 63 4466.43 0 0.00 2 300.00 2 300.00

PALAKKAD 18 711.90 31 1518.55 49 2230.45 17 649.15 31 1357.69 48 2006.84 0 0.00 0 7.08 0 7.08

MALAPPURAM 24 751.25 23 1551.90 47 2303.15 24 581.50 23 1241.70 47 1823.20 0 0.00 0 0.00 0 0.00

KOZHIKODE 22 391.00 27 2151.60 49 3888.85 27 658.00 39 3115.55 66 3773.55 1 22.90 0 0.00 1 22.90

WAYANAD 4 34.00 21 745.40 25 779.40 4 32.90 19 619.25 23 652.15 0 0.00 0 3.00 0 3.00

KANNUR 13 728.50 11 620.26 24 1348.76 9 292.60 12 833.74 21 1126.34 0 0.15 0 0.00 0 0.15

KASARGODE 8 134.00 15 926.83 23 1060.83 7 117.00 15 892.83 22 1009.83 0 0.00 0 0.00 0 0.00

GRAND TOTAL 202 8716.68 399 34625.43 601 43342.11 192 6491.38 404 31159.71 596 37651.09 1 24.14 2 312.63 3 336.77

DISTRICT WISE BREAKUP OF LOAN OPERATIONS DURING THE YEAR 2008-09

PROFORMA - II

(Rs. in lakhs)


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DISTRICT WISE BREAK UP OF LOAN OPERATIONS DURING THE YEAR 2008-09

PROFORMA - III

(Rs. in lakhs)

Effective Sanction Loan Disbursed Recovery

Districts S.S.I. OTHERS TOTAL S.S.I. OTHERS TOTAL

THIRUVANANTHAPURAM 7 333.25 49 4670.26 56 5003.51 7 337.48 37 4229.77 44 4567.25 3624.64

KOLLAM 14 522.50 27 1450.46 41 1972.96 14 366.52 18 1005.80 32 1372.32 2226.04

PATHANAMTHITTA 9 538.25 6 492.90 15 1031.15 6 489.75 4 402.36 10 892.11 1208.72

KOTTAYAM 3 76.90 14 1072.35 17 1149.25 4 74.60 13 936.65 17 1011.25 1451.25

ALAPPUZHA 9 339.25 25 2021.73 34 2360.98 9 244.47 21 1749.48 30 1993.95 1199.39

KATTAPPANA 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0

THODUPUZHA 2 33.60 22 1485.75 24 1519.35 2 129.30 21 1114.75 23 1244.05 1689.61

ERNAKULAM 15 665.00 56 6527.40 71 7192.40 13 965.33 35 3476.76 48 4442.09 3647.13

PERUMBAVOOR 23 598.26 25 1961.25 48 2559.51 14 448.08 17 1662.40 31 2110.48 1268.18

TRISSUR 22 1052.13 39 3114.30 61 4166.43 25 1175.31 33 3207.16 58 4382.47 3311.73

PALAKKAD 17 649.15 31 1350.61 48 1999.76 12 490.27 21 1165.45 33 1655.72 1694.79

MALAPPURAM 24 581.50 23 1241.70 47 1823.20 14 493.91 18 1118.58 32 1612.49 1577.14

KOZHIKODE 26 635.10 39 3115.55 65 3750.65 15 475.50 31 1649.40 46 2124.90 2059.13

WAYANAD 4 32.90 19 616.25 23 649.15 5 32.96 16 453.37 21 486.33 519.17

KANNUR 9 292.45 12 833.74 21 1126.19 13 364.86 10 448.04 23 812.90 744.79

KASARGODE 7 117.00 15 892.83 22 1009.83 5 120.20 12 510.75 17 630.95 703.01

GRAND TOTAL 191 6467.24 402 30847.08 593 37314.32 158 6208.54 307 23130.72 465 29339.26 26924.72

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DISTRICT WISE BREAKUP OF LOAN APPLICATIONS RECEIVED, SANCTIONED AND

DISBURSED AS ON 31-03-2009

PROFORMA - IV

(Rs. in lakhs)

APPLICATION RECEIVED LOAN SANCTIONED EFFECTIVELY LOAN DISBURSEDNo. % of tot Amount % of tot No. % of tot Amount % of tot No. % of tot Amount % of tot

THIRUVANANTHAPURAM 5292 10.88 53933.10 11.48 4254 10.68 40639.73 11.33 4278 11.00 33796.67 11.89

KOLLAM 4655 9.57 36440.59 7.76 3880 9.74 26383.78 7.36 3677 9.45 21451.70 7.55

PATHANAMTHITTA 1771 3.64 18425.43 3.92 1597 4.01 15978.05 4.46 1526 3.92 11937.28 4.20

KOTTAYAM 3210 6.60 24340.27 5.18 2430 6.10 18562.72 5.18 2387 6.14 15490.80 5.45

ALAPPUZHA 2966 6.10 26899.46 5.73 2400 6.03 17930.61 5.00 2434 6.26 13881.68 4.89

IDDUKKI 2725 5.60 24035.70 5.12 2476 6.22 18831.99 5.25 2533 6.51 15249.16 5.37

ERNAKULAM 6731 13.83 106448.98 22.66 5258 13.20 80437.66 22.43 4863 12.50 58660.73 20.64

TRISSUR 4233 8.70 46459.65 9.89 3135 7.87 37180.87 10.37 3937 10.12 30694.66 10.80

PALAKKAD 2714 5.58 30418.55 6.47 2244 5.63 23225.15 6.48 2013 5.17 17925.13 6.31

MALAPPURAM 1919 3.94 22214.33 4.73 1629 4.09 18366.47 5.12 1404 3.61 15037.00 5.29

KOZHIKODE 5876 12.08 39766.18 8.46 4926 12.37 29761.45 8.30 4476 11.50 24008.45 8.45

WAYANAD 1619 3.33 9377.61 2.00 1467 3.68 7475.82 2.08 1466 3.77 5867.15 2.06

KANNUR 3544 7.28 19876.00 4.23 2919 7.33 14871.27 4.15 2751 7.07 12606.70 4.44

KASARGODE 1399 2.87 11208.49 2.39 1212 3.04 8903.45 2.48 1155 2.97 7545.82 2.66

LAKSHADWEEP 8 0.02 9.88 0.00 6 0.02 5.03 0.00 6 0.02 5.03 0.00

GRAND TOTAL 48662 100 469854.22 100 39833 100 358554.05 100 38906 100 284157.96 100


...

38

Sanction since inception Effective Sanction Sanction since inceptiontill 31-03-2008 During 2008-2009 till 31-3-2009

No. Amount No. Amount No. Amount

Amount-wise upto Rs.50,000 3200 1134.63 0 0.00 3200 1134.63

Rs.50,001 to Rs.1,00,000 4689 3903.59 4 3.38 4693 3906.97

Rs.1,00,001 to Rs.2,00,000 8377 14756.10 12 23.00 8389 14779.10

Rs.2,00,001 to Rs.5,00,000 11496 42519.22 49 186.53 11545 42705.75

Rs.5,00,001 to Rs.10,00,000 5201 40555.20 58 462.82 5259 41018.02

Rs.10,00,001 to Rs.20,00,000 2843 40523.23 91 1494.99 2934 42018.22

Rs.20,00,001 to Rs.30,00,000 1423 31906.49 133 3167.17 1556 35073.66

Rs.30,00,001 to Rs.40,00,000 590 20176.05 22 796.48 612 20972.53

Rs40,00,001 to Rs.50,00,000 664 24543.25 56 2733.40 720 27276.65

Rs.50,00,001 to Rs.60,00,000 202 11745.42 9 510.00 211 12255.42

Rs.60,00,001 to Rs.90,00,000 373 18929.95 36 2725.75 409 21655.70

Above Rs.90,00,000 777 70546.60 123 25210.00 900 95756.60

TOTAL 39835 321239.73 593 37314.32 40428 358554.05

Size-wise

Small Scale 22134 145124.55 191 6467.24 22325 151591.79

% 55.56 45.18 32.21 17.33 55.22 42.28

Others 17701 176115.18 402 30847.08 18103 206962.26

% 44.44 54.82 67.79 82.67 44.78 57.72

TOTAL 39835 321239.73 593 37314.32 40428 358554.05

AMOUNT-WISE AND SIZE-WISE CLASSIFICATION OF LOAN SANCTIONED AS ON 31-03-2009

PROFORMA - V

(Rs. in lakhs)

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DISTRICT WISE CLASSIFICATION OF LOANS AND ADVANCES AS ON 31-03-2009

PROFORMA - VI

(Rs. in lakhs)

EFFECTIVE SANCTION DISBURESEMENTNO AMT NO AMT

THIRUVANANTHAPURAM 4254 40639.73 4278 33796.67

KOLLAM 3880 26383.78 3677 21451.70

PATHANAMTHITTA 1597 15978.05 1526 11937.28

KOTTAYAM 2430 18562.72 2387 15490.80

ALAPPUZHA 2400 17930.61 2434 13881.68

IDDUKKI 2476 18831.99 2533 15249.16

ERNAKULAM 5258 80437.66 4863 58660.73

TRISSUR 3135 37180.87 3937 30694.66

PALAKKAD 2244 23225.15 2013 17925.13

MALAPPURAM 1629 18366.47 1404 15037.00

KOZHIKODE 4926 29761.45 4476 24008.45

WAYANAD 1467 7475.82 1466 5867.15

KANNUR 2919 14871.27 2751 12606.70

KASARGODE 1212 8903.45 1155 7545.82

LAKSHADWEEP 6 5.03 6 5.03

GRAND TOTAL 39833 358554.05 38906 284157.96


...

40

Sl No Type of Industry S.S.I OTHERS TOTALAMOUNT AMOUNT AMOUNT

1 Mining 13395.72 852.77 14248.492 Crude Petroleum 229.73 34.66 264.393 Petroleum Refining 13.37 0 13.374 Sugar 0 0 05 Other Food Products 21656.67 3816.53 25473.26 Textiles 5396.76 4395.5 9792.267 Paper and Paper Products 6235.68 732.57 6968.258 Leather & Leather Products 281.83 284.5 566.339 Rubber Products 19786.29 1357.23 21143.5210 Chemical and Chemical Products 6531.7 1442.77 7974.4711 Fertilizer 0 0 012 Cement 110.2 0 110.213 Basic Metals:

a) Iron & Steel 2992.81 2049.35 5042.16b) Non-Ferrous 751.71 21.4 773.11

14 Metal Products 5730.7 379.93 6110.6315 Capital Goods

a) Non-Electrical Machinery 1348.71 724.89 2073.6b) Electrical Machinery 2359.8 369.86 2729.66c) Electronic Machinery 0 0 0d)Transport Equipment 1544.62 96.6 1641.22

16 Electricity Generation 109.75 4.29 114.0417 Services

a) Motels & Shopping complex 5470.53 109476.39 114946.92b) Hospitals 1963.29 18071.42 20034.71c) Others 8220.2 38254.58 46474.78

18 Others 49047.02 23011.72 72058.74TOTAL 153177.09 205376.96 358554.05

INDUSTRY-WISE CLASSIFICATION OF LOAN SANCTIONED AS ON 31-03-2009 (EFFECTIVE)

PROFORMA - VII

(Rs. in lakhs)

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Sl No Type of Industry S.S.I OTHERS TOTALAMOUNT AMOUNT AMOUNT

1 Mining 11395.00 774.54 12169.542 Crude Petroleum 100.71 19.02 119.733 Petroleum Refining 11.31 0 11.314 Sugar 0 0 05 Other Food Products 20489.60 3679.39 24168.996 Textiles 4030.60 1638.52 5669.127 Paper and Paper Products 5632.25 479.48 6111.738 Leather & Leather Products 277.95 266.45 544.409 Rubber Products 17399.85 582.94 17982.7910 Chemical and Chemical Products 5461.71 945.80 6407.5111 Fertilizer 0 0 012 Cement 84.07 0 84.0713 Basic Metals:

a) Iron & Steel 2143.25 431.67 2574.92b) Non-Ferrous 590.08 13.50 603.58

14 Metal Products 3927.43 198.40 4125.8315 Capital Goods

a) Non-Electrical Machinery 1141.96 667.27 1809.23b) Electrical Machinery 1859.00 361.25 2220.25c) Electronic Machinery 0 0 0d)Transport Equipment 1073.58 31.34 1104.92

16 Electricity Generation 34.95 0.29 35.2417 Services

a) Motels & Shopping complex 4254.28 84541.78 88796.06b) Hospitals 793.00 12382.01 13175.01c) Others 9507.73 37324.56 46832.29

18 Others 38527.45 11083.99 49611.44TOTAL 128735.76 155422.20 284157.96

INDUSTRY-WISE CLASSIFICATION OF LOAN DISBURSED AS ON 31-03-2009

PROFORMA - VIII

(Rs. in lakhs)


...

42

Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09Applications Received No. 3145 2119 1746 2281 1297 793 598 468 406 541 567 619Applications Received Amount 32065 27369 20150 37401 22766 20865 19789 18820 16518 22406 28246 43658Applications Sanctioned No 2929 2286 1631 2077 1130 696 581 387 368 461 526 580Applications Sanctioned Amount 26035 20969 17612 29246 16382 15573 16958 10981 12113 13583 24557 34910Disbursement Amount 19944 19129 14971 22689 17594 11231 11902 8548 7852 9725 18643 29394Recovery Amount 16556 20329 23025 23069 23709 25285 27284 24468 21413 19908 21844 26925Arrears Amount 22883 28836 33995 34162 53607 53614 58385 59638 69561 75250 76244 7741Number for loans 24132 25807 15342 13948 15197 11896 11586 10345 7797 6309Balance Outstanding Amount 73731 82850 91020 104730 120306 113736 113071 **106769 106279 104489 97128 70353Authorised Capital 10000 10000 10000 10000 20000 20000 20000 20000 20000 20000 20000 35000PAID-UP CAPITALState Governement 7693 8993 10293 11268 11968 12999 13999 14199 14399 14399 14399 19783SIDBI 1483 1483 1483 1483 1483 1483 1483 1483 1483 1483 1483 613Others 24 24 24 24 24 24 24 24 24 24 24 10Sub Total 9200 10500 11800 12775 13475 14506 15506 15706 15906 15906 15906 20406INCOMEInterest on Loans 8223 10017 10665 11841 11534 11591 11790 8762 8003 8390 8293 10192Other Income 695 625 432 531 249 212 250 742 1179 570 540 734TOTAL 8918 10510 11096 12372 11783 11803 12040 9504 9182 8960 8833 10926EXPENDITUREInterest on Bonds 2321 3182 3613 3774 4149 4340 4295 4082 2684 1682 1371 1124Interest on Refinance 1551 3507 3975 4572 5017 4609 3338 2930 3237 2690 2409 2913Interet on Other Borrowings 427 510 379 208 115 49 49 37 91 3 3 10Fund Raising Financial Expense 432 299 256 287 215 327 343 299 178 134 118 98Pay & Allowances etc 585 683 1003 931 795 850 1004 955 1050 1231 2362 2408Establishment Expenses 165 175 189 211 125 119 136 223 227 243 244 211TOTAL 6981 8356 9415 9983 10416 10294 9165 8526 7467 5953 6507 6764

HIGHLIGHTS OF PERFORMANCE(Rs. in lakhs)

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HIGHLIGHTS OF PERFORMANCE (Rs. in lakhs)

Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09Profit /Loss before Depreciation/Write off /Provisions 1937 2154 1681 2389 1260 1179 2774 978 418 3004 2301 4162Depreciation 152 210 210 160 146 84 56 47 38 38 38 33Bad Debts Written Off 637 795 751 427 1009 1095 1765 878 1713 3291 11757Provision for Bad & Doubtful debts -- -- 1191 3121 2925 675 192 270 715 600 1310 (-)8798Net Profit / Loss 1148 1148 (-)1068 (-)2438 (-)2883 (-) 637 181 (-)249 177 440 (-)2815 1170Accumulated Loss -- -- (-)1060 (-)3502 (-)6385 (-) 7021 (-) 6834 (-)7082 (-)7277 (-)7685 (-)10500 0SOURCES OF FUNDSShare Capital 1300 1300 1300 975 700 1031 1000 200 200 200 0 15000Bonds 3200 4000 -- 5277 3200 2503 -- … .. .. 0Refinance 9114 9222 8151 8281 7493 1728 4266 4582 3400 6333 7500 16000Fixed Deposits 71 -- -- -- 118 30 … .. .. 0Plough Back 1299 1359 930 1960 251 199 7209 100 7740 -2380 14155RBI Borrowings -- -- -- 500 950 1073 700 … .. ..LOC 2600 1400 -- -- -- -- 1000 .. 550USES OF FUNDSRepayment of Bonds 110 715 440 248 660 1100 2250 13510 3111 4331 2044 1592Repayment of Refinance 2778 2789 3379 3980 5114 7920 8913 1926 3824 10830 4682 6257Repayment of FD -- -- -- -- - -- 178 124 31 9 12Repayment of Adhoc Borrowings/LOC -- 300 -- -- 500 950 700 … 1000 550 0ARREARS AT THE BEGINNINGPrincipal 9800 10884 13393 14456 19015 23279 *23219 *25402 26056 24739 23468 *7666Interest 11177 11999 15443 15772 21981 30328 26839 28222 36320 44822 51566 *7976Current Demand - Principal 9250 12621 14740 10500 16276 16548 16029 14148 12182 10394 10213 10981Interest 9212 13661 13444 16323 19964 19041 14519 16334 16416 15203 12962 8043Total Demand - Principal 19050 23505 28133 24956 35291 39827 39248 **39550 38238 35133 33897 18647Interest 8390 13394 10882 11840 41945 49369 41358 **44556 52736 60025 64528 16019Recovery - Principal 8166 10217 12143 11049 12012 13693 15034 **15594 13499 11449 13715 17821Interest 8390 13394 10882 11840 11617 11592 12150 **8874 7914 8459 8466 9104Arrears at the end of the year - Prl. 10884 15663 15990 13907 23279 26134 24214 **23956 24739 23684 20182 826Interest 11999 13393 18005 20255 30328 37777 29208 **35682 44822 51566 56062 6915SUB TOTAL 22883 28836 33995 34162 53607 63911 53422 59638 69561 75250 76244 7741

*The arrears at the beginning of the year and the demand has been re-worked for giving effect of write-off.**Mistakes rectified.

.........KFC would be tra

nsformed into an important

development agency.

Stimulus package of Rs. 5,000 crore to

be spent

through Public Sector organisations lik

e KFC for

infrastructure development, Tourism

sector, I

T Sector

and EMS Housing Scheme.

A loan package of Rs.500 crores w

ill be provided to

KFC to support the Small &

Medium Industries.

Rs.130 crores towards equity support to KFC for the

year 2008-09.

Restructuring of Public S

ector undertaking to be done

through KFC.

KFC will formulate a package of R

s.100 crores to

support Gulf R

eturnees who intend to invest in

industrial or commercia

l ventures in Kerala.....

Excerpts From

2009 -2010

KERALA FINANCIAL CORPORATION(INCORPORATED UNDER THE STATE FINANCIAL CORPORATIONS ACT No. LXIII OF 1951

H.O: VELLAYAMBALAM, THIRUVANANTHAPURAM - 695 033.Phone: 2318319 Fax: 2318541, 2311750, 2313813 Email: [email protected] Website: www.kfc.org

P R O X Y

I/We . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(folio

No.)

of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .being a share holder of the Kerala Financial Corporation

holding shares Nos. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . hereby appoint

Shri/Smt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . (or failing him

Shri/Smt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . .) as my/our

proxy to vote for me/us and on my/our behalf at the meeting of the shareholders of the Corporation to be held at

. . . . . . . . . . . . . . . . . . . .on the . . . . . . . . . . . . . . . . . . .day of . . . . . . . . . . . . . . . . . . .and at any adjournment

thereof.

Signed this the . . . . . . day of . . . . . . . . .

Notes

1. The proxy need not be a member of the Corporation.

2. The proxy form signed across Re.1/- Revenue Stamp should reach the Corporation’sRegistered office at least 48 hours before the meeting.

Signature of

share holder on

Re.1 /-

Revenue Stamp

annual report - 2008-09 - kerala financial corporation 2009.pdf · annual report - 2008-09 ......

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