operations at a glance - karnataka · 2019. 11. 29. · operations at a glance (amount : ` in...
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OPERATIONS AT A GLANCE
(Amount : ` in crore)
Since Inception 2011-2012 2012-2013 2013-14 upto
31.03.2014
Paid up capital at the 619.06 658.56 658.56 -- year end
Gross Sanctions
a. Number 1,485 1,598 1,426 1,68,152
b. Amount 817.32 944.06 909.26 13,135.53
Assistance to Micro & SSIs
a.Number 1,226 1,271 1,157 1,10,380
b.Amount 529.76 606.96 575.41 7,270.99 Disbursements 597.08 734.70 707.47 10,267.50 Loans Outstanding 1,753.61 1,938.21 2,073.37 -- Recoveries 660.90 792.89 836.52 13,094.41 % age of NPA (net) 3.72 2.78 2.57 -- Income 234.63 284.42 284.59 -- Expenditure 223.67 267.36 273.09 -- Net Profit 11.09 17.02 11.42
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Sri L.V. Nagarajan, I.A.S. Chairman, KSFC and Additional Chief Secretary, Finance Department, GoK Upto 6‐10‐2013
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Smt. Vandita Sharma, I.A.S. Chairperson and Managing Director
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BOARD OF DIRECTORS
Sri Arvind Shrivastava IAS Sri M Maheshwar Rao IAS Smt. Bhama Krishnamurthy
Sri K Sathianandan Sri P Kumaresan Sri Siddalingappa
Sri G S Doreswamaiah Sri C Basavegowda Sri S Ananthan 6
BOARD OF KSFC Directors on the Board of KSFC :
Sl.No. Name From Period U/s of SFCs
To Act
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2
3
4
5
6
7
8
9
10
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Sri L V Nagarajan, IAS., as Chairman as Director
Smt. Vandita Sharma, IAS., Chairperson & Managing Director
Sri Arvind Shrivastava, IAS.,
Sri M Maheshwar Rao, IAS.,
Sri S V G Nanda Gopal
Smt Bhama Krishnamurthy
Sri K Natarajan
Sri K Sathianandan
Sri K Preetam Lal
Sri Siddalingappa
Sri P Kumaresan
Sri C Basavegowda
Sri G S Doreswamaiah
Sri H V S Krishna
Sri S Ananthan
Smt. Vandita Sharma, IAS., Managing Director
16.12.2010 07.04.2010 31.10.2013
07.10.2013
14.06.2012
08.05.2012
28.06.2013
01.12.2011
28.06.2013
07.11.2012
08.07.2013
01.06.2011
17.12.2008
11.11.2009
18.09.2007
02.03.2013
30.08.2012
06.10.2013 15(1) 06.10.2013 10(b)
15(1) / 10(f)
10(b)
10(b)
27.06.2013 10(c) 10 (c)
27.06.2013 10(c) 10 (c)
07.07.2013 10(d) 10 (d)
10(d)
10(e)
10(e)
17.09.2013 10(e)
10(e)
31.10.2013 10(f)
Members of the Executive Committee : EXECUTIVE COMMITTEE
Sl.No. Name Period U/s of SFCs
From To Act
1 Smt. Vandita Sharma, IAS., 30.08.2012 18(1)
2 Sri M Maheshwar Rao, IAS., 06.07.2012 18(1)
3 Sri K Natarajan 01.12.2011 27.06.2013 18(1)
Sri K Sathianandan 28.06.2013
4 Sri K Preetam Lal 07.11.2012 07.07.2013 18(1) Sri Siddalingappa 08.07.2013 18(1)
5 Sri P Kumaresan 01.06.2011 18(1)
6 Sri C Basavegowda 17.12.2008 18(1)
7 Sri G S Doreswamaiah 11.11.2009 18(1)
Executive Directors General Managers Sri N R Sridhar Sri B H Srinivasa Murthy Sri CA N Aswatharam Sri G Nagaraja
Sri L B Nilogal Sri D Panduranga
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Legal Advisor Sri Gururaj Joshi
Auditors A R VISWANATHAN & CO. Chartered Accountants
KARNATAKA STATE FINANCIAL CORPORATION DIRECTORS' REPORT 2013‐14
The Directors of the Corporation have great th
power sector was driven by 12.4 % in nuclear
pleasure in presenting the 55 Annual Report on the operations of the Corporation, together with, the audited statement of accounts for the year ended March 31, 2014.
Even though the financial year witnessed decline in sanctions and disbursements, Corporation was able to improve its standard portfolio from ` 1,607.26 crore to ` 1,745.19 crore at a growth of 8.58%. Inspite of adverse market conditions, Corporation could earn profit of ` 11.42 crore. The Gross NPA was brought down from 17.08% to 15.81% and net NPA from 2.78% to 2.57%. 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:
The Indian economy grew by 4.9 % during 2013‐14 as compared to 4.5 % in 2012‐13. The Agriculture, Industry and Service sectors registered growth rates of 4.6 %, 0.7 % and 6.9 % respectively. The Agriculture sector grew at 4.6 % as against 1.4 % in the previous year.
The Indian Industry ended the fiscal year 2013‐14 on a negative note. Index of Industrial Production (IIP), the official measure of Industrial activity in India, registered a growth of (‐) 0.1 % vis‐a‐vis 1.1 % during 2012‐13. The negative growth is mainly because of poor performance of manufacturing sector. Manufacturing sector registered a negative growth of 0.2 % with a 0.9 % fall in output. The mining sector had growth of (‐) 1.9 % as compared to (‐) 2.2 % during previous year. The only main sub‐ segment of the industry that reported a growth during 2013‐14 is electricity at 6 %. The growth in
power generation followed by thermal power generation and hydro power generation which grew at 5.2 % and 4.5 % respectively. This growth is mainly because of private sector companies' strong lead in capacity addition by adding nearly 66% of the capacity addition. The Construction industry too had a negligible growth at 1.7 %. The Industry has a share of 27.3 % in GDP.
The Service Sector grew at 6.9 % during 2013‐14 compared to 7 % during the previous year. The growth in real estate, business services, financing and insurance was 11.2 % compared to previous year's 10.9 %. The percentage share of Service Sector in GDP is 58.8 %.
KARNATAKA'S ECONOMY :
Karnataka has been spearheading the growth of Indian Industry, particularly in terms of high‐ technology industries in the areas of electrical and electronics, information and communication technology, biotechnology and more recently nano technology.
The Karnataka's Gross State Domestic Product (GSDP) at constant price (2004‐05) grew by 5% and reached ` 3,11,628 crore in 2013‐14 from ` 3,03,444 crore in 2012‐13.
Despite the drought conditions in the State, the GSDP growth rate of agriculture and allied activities was 3.6% during 2013‐14 as against the negative growth of 4.9% in 2012‐13. The Industry sector grew at 1.2% during 2013‐14 which is lower than growth rate of 4.4% recorded during previous year. The service sector growth at 7.2% during 2013‐14 is lower than the growth rate of 8.4% during previous year.
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Total value of exports of Karnataka during 2013‐14 was ` 2,90,418 crore against All India export of ` 20,70,108 crore which amounts to share of 14.03%. The export performance of the state in computer software and electronics alone was ` 1,78,000 crore with a share of 40% in India's total exports in that sector.
MSMEs form an important and growing segment of Karnataka's industrial sector. During 2013‐14, 25,966 units were registered with employment potential of 1,67,347 persons and investment of ` 2,85,056 lakhs. During the year, 3855 acres of land was acquired and developed by KIADB and 607 industrial plots were developed by KSSIDC.
The State attracted industrial investment through State Level Single Window Clearance Committee. The Committee approved 209 projects with a proposed investment of `3,548.21 crore and employment potential to 43,759 persons. The State High Level Clearance Committee (SHLCC) cleared 46 projects with a proposed investment of ` 38,653.38 crore and employment potential to 1,27,692 persons. GOVERNMENT SUPPORT FOR KSFC :
During the financial year 2013‐14 the Government extended support to KSFC as detailed below:
Additional share capital of ` 50.00 crore was infused to improve the financials of the Corporation..
The one time settlement scheme for small borrowers of KSFC was extended upto 31.03.2014 and equity support of ` 1.93 crore was provided.
Provided ` 17.25 crore for providing interest subsidy for Scheduled Caste and Scheduled Tribe entrepreneurs.
MAJOR INITIATIVES:
In the backdrop of decision taken by SIDBI to withdraw from SFCs, the Corporation initiated dialogue with SIDBI for settlement of its liabilities with 'in‐principle' clearance of State Government. After deliberations, a detailed proposal was submitted to SIDBI on 31.3.2014. The matter was further discussed in a meeting chaired by the Chief Secretary, Government of Karnataka. The senior executives of SIDBI were present in the meeting. A decision has been taken to pay an amount of ` 450 crore to SIDBI against total liability of ` 725 crore. SIDBI has communicated its acceptance to the proposal. The settlement would cause a major restructuring of financials and change the landscape of the Corporation. The Corporation would explore redefining of its role and resource base with the assistance of State Government.
BOARD AND EXECUTIVE COMMITTEE MEETINGS : During the year 2013‐14, the Corporation conducted six meetings of the Board of Directors and seven meetings of the Executive Committee.
AUDIT COMMITTEE: The Audit Committee, a sub‐committee of the Board met four times during the financial year 2013‐14. The Committee discussed the audit reports, compliances regarding statutory payments, special investigation reports in its meetings and took appropriate decisions.
RISK MANAGEMENT COMMITTEE: The Risk Management Committee, sub‐committee of the Board met once and reviewed the Risk Management Policy and practices and based on the deliberations, changes were brought in the policy, bench mark for project acceptability and modifications to risk rating models.
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ASSET LIABILITY MANAGEMENT COMMITTEE :
The Asset Liability Management Committee chaired by the Chairperson and Managing Director & senior executives as members met two times to review the liquidity position, borrowings and interest rates.
OPERATIONAL HIGHLIGHTS
SANCTIONS:
During the year 2013‐14, Sanctions of loans under various schemes touched ` 909.26 crore covering 1,426 cases as against ` 944.06 crore covering 1,598 cases during 2012‐13. Cumulative sanctions reached ` 13,135.53 crore covering 1,68,152 cases as on 31‐03‐2014.
FLOW OF ASSISTANCE :
a. Assistance to micro and small ‐ scale enterprises : Assistance of ` 575.41 crore was sanctioned to 1,157 small‐scale enterprises. Cumulative assistance to small ‐ scale enterprises at the end of March 2014 stood at ` 7,270.99 crore to 1,10,380 enterprises.
b. Assistance to medium‐scale enterprises : Assistance of ` 75.65 crore was sanctioned to 40 medium‐scale enterprises. The cumulative assistance to medium ‐ scale enterprises at the end of March 2014 stood at ` 1,170.19 crore to 1,793 enterprises.
c. Assistance to transport : Assistance of ` 8.80 crore was sanctioned to 67 beneficiaries. The cumulative assistance to this sector stood at ` 771.11 crore to 40,712 cases.
d. Assistance to other sectors : Assistance to other sectors excluding MSMEs and transport was ` 249.40 crore to 162 units. Cumulative assistance to other sectors stood at ` 3215.67 crore to 12,293 cases.
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e. INDUSTRYWISE SANCTIONS FOR THE FY : 2013‐14 .
94.71 10.42
98.80 10.87
22.78 2.50
SIZEWISE SANCTIONS FOR THE FY : 2013‐14 :
DISBURSEMENT:
The Disbursement for the year 2013‐14 was ` 707.47 crore as against `734.70 crore for the previous year. The cumulative disbursement of the Corporation reached ` 10,267.50 crore as on 31.03.2014.
INVESTMENT, VALUE OF OUTPUT AND EMPLOYMENT :
The investment catalysed by the Corporation in 2013‐14 is expected to be ` 5,029.66 crore resulting in value of output to ` 3,164.69 crore and generate employment to 9,098 persons.
RECOVERY :
The Recovery for the year 2013‐14 was `836.52 crore compared to ̀ 792.89 crore for the previous year.
CASES UNDER SECTION 29 OF SFCs' ACT :
At the beginning of the financial year 2013‐14, there were 108 units in custody of the Corporation under Sec.29 of SFCs' Act involving an amount of ` 364.97 crore. During the year, 28 units were added involving an amount of ` 49.28 crore. Assets of 22 units were returned / released / sold / account closed during the year. Assets of 6 units were transferred to DC / DC Transit. As at the end of March 2014 assets of 108 units involving arrears of ` 366.85 crore remained in the custody of the Corporation.
KPM (R) CASES :
During the year 2013‐14, the Corporation referred 3 units under KPM(R) Act for issuing certificates to Deputy Commissioner involving an amount of ` 0.66 crore. At the end of 2013‐14, there were 711 units have been referred to Deputy Commissioner for recovery of dues of ̀724.72 crore.
FINANCIAL RESULTS :
During the year under review, the Corporation earned a gross revenue of ` 284.59 crore as against `284.42 crore in FY 2012‐13. The net profit was `11.42 crore.
TREASURY ACTIVITY :
During the year, the Government of Karnataka provided an equity capital of ` 51.93 crore (including ` 1.93 crore under Special OTS Scheme of Government of Karnataka). As on 31‐03‐2014,
the equity capital of the Corporation stood at `936.94 crore (including share application money of `278.39 crore) compared to ` 885.01 crore (including share application money of ` 226.46 crore) as on 31‐03‐2013.
During the year, the Corporation did not avail any refinance from SIDBI. However, the Corporation repaid `136.27 crore during the year, thereby the LoC outstanding of SIDBI decreased to `692.94 crore from ` 829.21 crore as on 31‐03‐2013. The interest cost on account of LoC decreased to `69.31 crore during the year 2013‐14, which was `77.21 crore for the year 2012‐13.
The Corporation redeemed bonds amounting to ` 26.85 crore during the year. The outstanding of bonds decreased to ` 1162.65 crore, which was ` 1189.50 crore as on 31‐03‐2013. The interest cost on bonds increased to ` 100.80 crore from ` 85.31 crore for the year 2012‐13. The increase is on account of increase in the quantum of borrowings in the previous year and cost of said borrowings. The Corporation paid ` 11.83 crore to the State Government as guarantee commission during the year compared to ` 9.47 crore for the FY 2012‐13. The total long‐term liability of the Corporation decreased to ` 2035.06 crore by the year end from ` 2139.32 crore as on 31‐03‐2013. The total interest and financial expenses increased to ` 193.06 crore for the year 2013‐14 from ` 184.27 crore for the year 2012‐13.
Share Holding Pattern of the Corporation as on 31.03.2014
Sl. No.
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2 3 4 5
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Particulars
Government of Karnataka Under Section 4(3)(a) Special Capital issued under section 4A
Small Industries Development Bank of India Under Section 4(3)(b) Special Capital issued under Section 4A
Insurance Companies under section 4(3)(c) Public Sector Banks under section 4(3)(c) Co‐operative Societies and Banks under section 4(3)(d) Other parties under section 4(3)(d)
Paid up No. of Shares equity
(` In lakh)
60863713 60863.71 1127500 1127.50
Total 61991213 61991.21
3210385 3210.39 627500 627.50
Total 3837885 3837.89 16100 16.10 7900 7.90 1530 1.53
935 0.94 Total 65855563 65855.56
Percentage holding
94.14%
5.83%
0.02% 0.01% 0.00%
0.00% 100.00%
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FINANCIAL SERVICE ACTIVITIES :
The Corporate Insurance Agency Agreement with IFFCO‐Tokio General Insurance Company Ltd for marketing of General Insurance Products has ended on 31‐12‐2013.The Corporation mobilised premium towards non‐life insurance products of IFFCO‐TOKIO General Insurance Company and earned a gross commission of ` 48.72 lakhs for 9 months in financial year 2013‐14.The Corporation entered into an MoU with United India Insurance Company Ltd (UIIC), a public sector undertaking for marketing their General Insurance Products. An income of ` 19.65 lakh was earned from e‐stamping activity.
HIRE PURCHASE & FINANCIAL SERVICES :
The HP&FS department facilitated the assisted units to open Foreign Letters of Credit(FLCs) to an extent of ` 1309.95 lakh and earned an income of ` 4.90 lakh. The Corporation earned other income of ` 4.04 lakh as fee for recovery agency services. The Corporation received dividend income of ` 44.03 lakh on the investments made in equity shares of various Companies.
INFRASTRUCTURE DEVELOPMENT ACTIVITY :
The project for establishment of an SME Park on 10 acres of industrial plot at Harohalli Industrial Area is under progress. Steps have been initiated for construction of office‐cum‐commercial building at Shimoga and Mysore in the land owned by the Corporation.
INTERNAL AUDIT :
A full‐fledged Internal Audit Department at Head Office with Audit Cells at Bangalore, Mysore, Dharwad and Gulbarga are functioning. In the Audit Cells, all the sanctioned loans are audited after sanction and before the first disbursement. The final audit is conducted before last disbursement. The Audit Cells also conducted quarterly routine audit as per the audit plan covering all the operational areas including the legal, finance, accounts and administrative matters. The Audit Department at HO, conducted
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routine audit of the departments housed in Head Office. Apart from the above, the department also conducted special investigations/audits wherever required and the reports are placed before the audit committee, for its deliberations and decision. The audit committee met four times during the financial year.
ISO CERTIFICATION :
Bureau of Indian Standards, Chennai conducted the Recertification Audit at KSFC Head Office in May 2013 and issued Renewal Licence No.QSC/L‐ 6000582.5 under the revised standards IS/ISO 9001:2008 for a period of three years valid from 26th May 2013 to 25th May 2016.
COMPUTERISATION AND DIGITISATION :
For better connectivity, the service was changed to KSWAN (Karnataka State Wide Area Network) managed by Centre for e‐Governance, Government of Karnataka. The bandwidth is doubled along with the provision of secured Internet facility through the new channel. Posting of auctions and tenders were shifted from e‐Auction portal of KSFC to e‐Auction portal of GoK maintained by Centre for e‐Governance. The portal has new features like increased security through usage of digital signature. Necessary training to the users in using this portal was imparted by e‐Auction cell, CEG, at its training centre. The existing software developed was fine tuned and a system of user feed back was also introduced.
DIGITIZATION OF LEGAL DOCUMENTS :
As a means of e‐governance, the Corporation has been digitizing security documents submitted by the borrowers while availing loan from the Corporation to avoid physical movement of files and to prevent misplacement/loss of security documents. The digitization of legal documents have been completed in Head Office and all the branches. The digitized data is stored in Branch offices and also at Corporate Office. Digitization of legal documents is being done regularly. New legal documents are digitized as and when the documentation process is completed.
RTI ACT :
During the year 2013‐14, 306 applications were received seeking information under the RTI Act, totalling to 347 applications(41 applications pending as on 31‐03‐2013) as at 31‐03‐2014. Information in respect of 336 cases were furnished and remaining 11 applications are pending as at the year ending 2014. The latest developments / changes in RTI Act are updated and implemented from time to time.
CUSTOMERS' GRIEVANCE CELL :
During the year, steps were initiated to immediately address the grievances of the customers sent through e‐mail and by letters addressed to the respective departments if any. There is a substantial drop in the number of complaints received by the CGC as the operations of the Corporation have been fine tuned to be in line with the transparency act of the State Government.
PERSONNEL AND ADMINISTRATION :
The manpower strength of the Corporation stood at 1,060 at the end of March 2014 as against 1,080 at the end of the March 2013. Of which, 210 are SCs (19.81%) and 44 (4.15%) are STs. Identifying the training needs of employees and based on their designated role and individual skill / capacities, the Corporation provided training to the employees of the Corporation. During the year, 98 employees(53 employees Class‐A & 45 employees Class‐B) were sent for external training to different types of training programmes.
NPA MANAGEMENT CELL :
In order to strengthen the management of NPA portfolio, the NPA Management Department is established. The NPA Management Department helps to monitor the quality of loan portfolio and supports the field level offices and alerts periodically on slippages for effective follow up and recovery in order to maintain quality of portfolio.
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Macro level studies are also taken up to appraise the top management about the quality of portfolio and sector wise, scheme wise and office wise NPA information to enable the management to frame suitable policy guidelines.
RISK MANAGEMENT DEPARTMENT :
As a step towards fine tuning of risk management systems in the Corporation, a Credit Risk Management Policy was framed and adopted. The Risk Management Department was established on 01‐04‐2012. In order to improve the quality of in house credit appraisal and mitigate credit risks, the Corporation after study of various credit risk models of financial institutions/ banks has introduced Credit Risk Analysis Models. These models analyse risks such as financial risks, business risks, management risk, legal risks etc., and give clear perception about the project being financed.
All loan proposals exceeding ` 150 lakh and above are scrutinised and credit rated by the department. During 2013‐14, the Department has scrutinised / rated 114 proposals involving a loan amount of ` 403.43 crore. All loan proposals exceeding ` 500 lakh are placed before the Credit Risk Management Committee(CRMC). During the year, the committee met 16 times, where 20 proposals were discussed. The committee cleared 17 proposals involving ` 117.09 crore.
CORPORATE SOCIAL RESPONSIBILITY :
The Corporation has contributed totally a sum of ` 7.50 crore to Karnataka Information Technology Venture Capital Fund‐2(KITVEN Fund‐2) a SEBI registered Venture Capital Fund, undertaking investments in units catering to Information Technology, Bio‐technology, Nano‐technology and other knowledge based industries within the State of Karnataka. During the year the Corporation contributed ` 1.50 crore to the total corpus of ` 26.25 crore.
The Corporation acts as a catalyst in development of MSMEs in the state by exhibiting socially, environmentally and ethically responsible behaviour in governance of its operations while making positive contribution in the betterment of the society. During the year 2013‐14, the Corporation has participated in several exhibitions, seminars, industrial and trade fairs, vendor development programs, loan melas, EDPs in engineering colleges by contributing to MSME Institute, industrial bodies like FKCCI, KASSIA, BIA, PIA, BMA. An amount of ` 2.59 lakh was contributed as a part of Corporate Social Responsibility for the cause of industrial promotion.
AUDITORS:
M/S A.R. Viswanathan & Co., Chartered Accountants was appointed as statutory auditors for the financial year 2013‐14.
AUDIT BY COMPTROLLER AND AUDITOR GENERAL OF INDIA :
The financial audit by the Comptroller & Auditor General of India was completed during August 2013.
ACKNOWLEDGEMENTS :
The Board of KSFC wishes to place on record its special thanks and gratitude to the Government of Karnataka for all the support extended for the settlement of small loans and equity support. Special thanks are also due to the SIDBI for the constant help and guidance in every phase of the working of the Corporation. The Board places on record its thanks to the Departments of Finance Department, Industries & Commerce and
Department of e‐governance, GoK for their continued support and guidance. The Board expresses its thanks to the Govt. of India and the Reserve Bank of India for their guidance.
The Board also thanks the LIC of India, UTI‐MF, IFFCO‐ TOKIO GENERAL INSURANCE CO. Ltd., HDFC, SHCIL and industry associations viz., KASSIA, AWAKE, LUB, BCIC, PIA, BIA, FKCCI etc. The Board expresses its thanks to the Commercial Banks, Apex Bank, Co‐operative Banks, Mysore Minerals Ltd., KSSIDC, KIADB and KPTCL for their co‐operation. The Board places on record its appreciation of the leadership, guidance, support and valuable contributions to KSFC by Sri L.V.Nagarajan, I.A.S., Chairman KSFC and Additional Chief Secretary, Finance Department, Government of Karnataka during his tenure as the Chairman of the Corporation. The Board places on record, the contribution made by out going Directors Sri S.V.G.Nanda Gopal, Sri K.Natarajan, Sri Preetam Lal and Sri H.V.S.Krishna during their tenure as directors.
The Board takes this opportunity to thank the entrepreneurs for reposing faith in the Corporation, profuse gratitude to 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 all the officers and officials of the Corporation.
By order of the Board Sd/‐
CHAIRPERSON AND MANAGING DIRECTOR
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To, The Shareholders, Karnataka State Financial Corporation, Bangalore.
1.Report on the Financial Statement We have audited the accompanying financial statements of Karnataka State Financial Corporation, Bangalore (“the Corporation”), which comprise of the Balance Sheet as at March 31,2014, Profit and Loss Account and Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
2.Management's Responsibility for the Financial Statements Corporation's Management is responsible for the preparation of the financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Corporation in accordance with the Schedule‐I, II of General Regulations and SIDBI directives and give the information as required to be given in terms of the provisions of Corporation's General Regulations. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
3.Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on auditing as issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Corporation's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
4. Opinion We invite your attention to :
a) Note No.1 of Schedule 'O' ‐ regarding the proposed “ONE TIME SETTLEMENT”(OTS) of outstanding refinance debt liabilities with “SIDBI” to be effected in the financial year 2014‐15.
b) Note No.2 (b) of Schedule(O) ‐ regarding investment made in equity share capital in State 'PSE's' at the instances and deemed on behalf of the State Government, no provision is made in the accounts for permanent diminution, if any in the value of investments.
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c) Note No.15(a) of Schedule(O) ‐ regarding collection of contingency deposits of `128.96 lakhs from the lessees towards anticipated claims from the commercial tax department, of which `84.45 lakhs was paid to the department and appeals were filed for number of assessment years. Since the appeals made for the assessment years 1995‐96 and 1996‐97 had been decided in favour of the Corporation, pending resolution of other appeals, payments made for other assessment years have been carried forward as sales tax paid under protest.
d) Note No.15(b) of Schedule(O) ‐ regarding applicability of sales tax /VAT payment in respect of assets taken over and sold u/s 29 of SFC's Act, 1951.
e) Note No.23 of Schedule(O) ‐ regarding a sum of `41.34 lakhs paid to official liquidator in pursuance of court order in case of M/s Pavan Alloys Pvt. Ltd., as the said sum was realisation on disposal of secured properties pertaining to the loan account, the amount is continued to be shown as recoverable pending decision in suit before the court of law.
f) Note No.24 of Schedule(O) ‐ regarding opening BRS difference of `14.52 lakhs in the operative canara bank account, was subjected to reconciliation during the year which has resulted in the restoration in the account, a fixed deposit amount `51.86 lakhs, omitted in the previous year and rectification of the accounting errors in the books. Net credit balance of `58.90 lakhs left un‐reconciled due to want of details has been accounted as miscellaneous income for the year.
g) Note No.25(a) of Schedule(O) ‐ regarding eligibility of input credit under service tax for `2.42 lakhs.
Our observations above (a) to (g) on account of issues set out in the notes concerned, are either subjective or depend on future developments/ resolutions, the financial impact in the current year's net profits and on the assets & liabilities of the Corporation is not ascertainable.
Subject to above as per Para (a) to (g), in our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with significant Accounting Policies and other explanatory information give the information required by the Corporation's General Regulations in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) In case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014; (b) In case of the Profit and Loss Account, of the profit for the year ended on that date; and (c) In case of the Cash Flow Statement, of the cash flows for the year ended on that date;
5.Report of Other Legal and Regulatory Requirements
In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement (as per SIDBI directive) dealt with by this report are in agreement with the books of account and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India to the extent applicable and conform to the statutory requirements prescribed under the State Financial Corporations Act, 1951, circulars and guidelines issued from time to time by the Small Industries Development Bank of India.
For A.R.Viswanathan and Co., Chartered Accountants
Firm's ICAI Reg. No.004765 S
Place : Bangalore Sd/‐ Shraddha.A.V
Date : 30‐06‐2014 Partner Membership No.227999
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2014
As at As at 31‐03‐2014 31‐03‐2013
93694.06 88501.30
4501.09 4589.99
203405.89 213931.97
14911.93 13380.87
316512.97 320404.13
3843.68 4064.50
63366.90 62848.15
179880.72 166092.84
5316.74 5516.18
12683.02 29318.67
51421.91 52563.79
316512.97 320404.13
CA N. Aswatharam Chairperson & Managing Director
Directors As per our Report of even date For A.R.Viswanathan & Co.,
Sriyuths Chartered Accountants
1. S Ananthan Firm Registration No. 004765 S
2. K Sathianandan 3. Siddalingappa (CA SHRADDHA .A.V)
4. C Basavegowda Partner Membership No. 227999
Place : Bangalore Place: Bangalore
Date : 30‐06‐2014 Date: 30‐06‐2014
17
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2014 Year ended Year ended 31‐03‐2014 31‐03‐2013
25478.98 24665.85 2980.39 3776.06
28459.37 28441.91 19305.56 18426.77 6262.82 5687.64 844.51 1101.54 132.20 245.74
521.25 1016.62 242.84 258.05
27309.18 26736.36 1150.19 1705.55
0.00 5.88 0.10 ‐ 8.52 8.41 ‐ 0.42
1141.88 1702.49
‐52563.79 ‐54266.28 ‐51421.91 ‐52563.79
CA N. Aswatharam Chairperson & Managing Director
Directors As per our Report of even date For A.R.Viswanathan & Co.,
Sriyuths Chartered Accountants 1. S Ananthan Firm Registration No. 004765 S 2. K Sathianandan 3. Siddalingappa (CA SHRADDHA .A.V) 4. C Basavegowda Partner
Membership No. 227999 Place : Bangalore Place: Bangalore Date : 30‐06‐2014 Date: 30‐06‐2014
18
As at As at 31‐03‐2014 31‐03‐2013
Schedule ‐A SHARE CAPITAL Authorised Share Capital(Refer Note No.8) 10,00,00,000 shares of ` 100 each 100000.00 75000.00 (P.Y.7,50,00,000 Shares of ` 100 each) Issued and Paid up Capital 64100563 shares of ` 100 each fully paid up 64100.56 64100.56 (P.Y.64100563 shares of ` 100 each fully paid up) 1755000 shares of ` 100 each, issued under section 4 A of the SFCs Act 1951 1755.00 1755.00
Amount Received towards Shares Pending Allotment 27838.50 22645.74 (Refer Note No.8 )
Total: 93694.06 88501.30 Schedule ‐B RESERVE FUND AND OTHER RESERVES a) Special Reserve Fund u/s.35A of SFCs Act,1951 250.00 250.00 b) Special Reserve for the purposes of 175.00 175.00 Sec.36(1)(viii) of the Income Tax Act'1961
c) Revaluation/Amortisation Reserve on Fixed Assets Opening Balance 4164.99 4253.89 Less: Transferred to P& L A/c 88.90 4076.09 88.90 4164.99
Total: 4501.09 4589.99
19
As at As at 31‐03‐2014 31‐03‐2013
Schedule‐C
TERM BORROWINGS
1. Bonds Guaranteed by State Govt.u/s 7(1)
of the SFCs Act 116265.00 118950.00
2. Line of Credit from SIDBI 69293.85 82920.76
3. Fixed Deposits accepted u/s 8 of SFCs ACT, 1951
a.Guaranteed by GOK 5.30 5.30
b.Other Deposits 17841.74 17847.04 10584.44 10589.74
4. Term Loan from Lakshmi Vilas Bank Ltd., 0.00 1471.47
203405.89 213931.97
20
As at As at 31‐03‐2014 31‐03‐2013
Schedule ‐D CURRENT LIABILITIES & PROVISIONS A) CURRENT LIABILITIES :
1. Sundry Deposits 4932.95 5150.11 2. Other Liabilities 458.89 462.48 3. a. Amount received pending adjustments 405.47 471.64 b. Amount received towards Subsidy 534.11 217.80 c. Loan Application Fee Deposit 51.53 42.92 d. Amount received from GOK towards SC Equity scheme 23.61 85.99 e Amount received from GOK towards ST Equity scheme 117.75 1132.47 88.61 906.96
4. Margin Money towards:
a. Towards Agencies ‐ KSCSTDC/ 701.79 880.58
KBCDC/KMDC/KWDC Less: Amount receivable from Parties 698.11 3.68 872.00 8.58
b. Towards Seed Capital from SIDBI / IDBI 1442.97 1536.36 Less: Amount receivable from Parties 1362.75 80.22 1448.88 87.48
5. Accrued Guarantee Commission to GOK 0.00 133.33
6. a) Interest Accrued & not due on loans 3267.65 3369.90 b) Interest Accrued and due but not paid ‐ SIDBI 1628.42 0.00 b) Stamp Duty Payable to GOK 0.00 28.95 c) Int on SSC payable to SIDBI 26.86 10.63 d) Other Accrued expenses 149.07 68.29
B) OTHER LIABILITIES & PROVISIONS
1.Towards Wealth Tax 8.42 8.52 2.Provision for Gratuity 467.40 616.10 3.Provision for Leave Salary 1389.77 1358.24 4.Others: a) Contingent Provision against Standard Assets 1210.14 910.26 b) Provision for Economic Loss under Restructuring 114.64 219.69
5.Provision towards Other Debits 41.35 41.35
Total: 14911.93 13380.87
21
As at As at 31‐03‐2014 31‐03‐2013
Schedule ‐E CASH AND BANK BALANCES a) Cash on hand incl. Stamps on hand 64.70 97.81 b) Balances with Banks i) Reserve Bank of India ‐‐‐ ‐‐‐ ii) SBI & Other Scheduled Banks 4469.24 4278.03 Less: Canara Bank Drawal facility balance (Net) 690.26 3778.98 311.34 3966.69 (Refer Note No. 5 )
Total: 3843.68 4064.50 Schedule‐F INVESTMENTS 1. Investments in Shares
i) Shares acquired pursuant to underwriting agreements
Irredeemable Preference Shares fully paid 16.28 16.28 less: Provisions 16.28 0.00 16.28 0.00
ii) Investment in Preference Shares ‐ Others 79.52 79.52 iii) Investment in Equity Shares 42639.58 42639.58 less: Provisions 132.40 42507.18 82.08 42557.50
2. A. Investment in KITVEN FUND 750.00 600.00
Less : provisions 25.77 724.23 15.89 584.11 B. Investment in KAMCO & KATCO
i) 16500 Shares of `.100 each in KAMCO 16.50 16.50 ii) 500 Shares of `.100 each in KATCO 0.50 17.00 0.50 17.00
C. Investment in NSCs 0.02 0.02 D. Investment in KESOL EQUITY FUND 5.00 5.00
less: Provisions 5.00 0.00 5.00 0.00
E. Investment in Insurance Cos for leave encashment 1455.49 1026.54 3. Application Money on Shares in PSEs (Refer Note No.9) 18583.46 18583.46
Total: 63366.90 62848.15 22
As at As at 31‐03‐2014 31‐03‐2013
Schedule ‐G LOANS AND ADVANCES 1. LOANS AND ADVANCES a) Term Loans and Advances 202546.38 189026.85 b) Factoring Advances 108.01 108.01 c) Debentures Subscribed 3315.14 3315.14 d) Lease Finance 23.89 23.89 e) Deferred Payment Guarantee 491.34 491.34 f) Financial Guarantee 466.22 466.22
Total: 206950.98 193431.45 Less: NPA Provisions 27070.26 179880.72 27338.61 166092.84
2. Hire Purchase Instalment due 386.37 389.59 Less: Provisions 386.37 0.00 389.59 0.00
Total: 179880.72 166092.84
Schedule ‐ I CURRENT ASSETS Deposits with Banks 6094.21 22492.07
Advances to Staff 1736.56 2042.86 Less: Provisions 6.95 1729.61 7.95 2034.91
Deposits and Other Advances. 281.54 258.74 Less: Provisions 101.21 180.33 91.37 167.37
Other Assets 4.51 16.78 Less: Provisions 0.00 4.51 7.29 9.49
Advances to suppliers 736.43 736.43 Less: Provisions 736.43 0.00 736.43 0.00
Assets acquired in satisfaction of loans 12.48 11.74 Less: Provision for loss on acquired assets 11.74 0.74 11.74 0.00
Advance Tax incl. TDS 51.50 39.58
Expenses recoverable ‐ Other Debits 41.35 41.35
Prepaid Expenses 10.50 7.38 Accrued Interest on Loans & Advances 4570.27 4526.52
Total: 12683.02 29318.67 23
1. The land allotted by KIADB at Harohalli Industrial Area measuing 10 acres is on lease cum sale basis for the development of industrial park. The Corporation has taken possession of the land. The development is yet to be taken up.The titles are yet to be conveyed in favour of the Corporation. 2. As a policy, depreciation is charged at specified percentages on various categories of fixed assets. Due to non‐reconciliation in the past years, the percentages are not strictly tallying (vide 4(iv) of
signigicant Accounting Policies) to the percentages of left over depreciation to be charged forthe remaining chargeable period of assets after netting off number of years of depreciation charge already made. For the year, chargeable depreciationhas been calculated as residual balance after strictly keeping the depreciation at quantum level equal to the left‐over percentages of depreciation chargeable prescribed for the remaining chargeable years. This has resulted in certain amount of excess/short depreciation (asset‐wise) calculated in terms of precentages for the current year on building and bicycles.
Year ended Year ended 31‐03‐2014 31‐03‐2013
Schedule ‐ J INTEREST INCOME
Interest on Loans & Advances (Net) 25346.99 24594.26
Interest on NCDs and Others 131.99 71.59
Total: 25478.98 24665.85 Schedule ‐K OTHER INCOME
One Time Disbursement Fee 379.45 382.74
Sale of Application Forms 1.70 1.92
Interest on Bank Deposits & Other investments 1219.52 827.13
Interest on staff advances 194.99 238.74
Premium on pre‐mature closure of Accounts 169.41 159.88
Other income from Leasing & Merchant Banking 5.73 19.99
Dividend on Investments 45.73 4.00
Income from Financial Services 51.28 59.78
Income from E‐Stamping Activity 19.65 18.69
Rent received 34.96 14.71
Profit from Sale of fixed assets 2.63 22.67
Bad Debts recovered 93.31 197.57
Loan Processing Fee 420.31 445.08
Profit from Sale of Acquired assets 0.97 4.43
Provision for NPAs withdrawn 14.99 1019.30
Income from KITVEN FUND (Venture Capital) 0.00 58.36
Interest Income from Inv in Insurance Cos (E Leave) 97.50 12.16
Miscellaneous Income 139.36 200.01
Revaluation/Amortization Reserve withdrawn 88 90 88 90
Year ended Year ended 31‐03‐2014 31‐03‐2013
Schedule ‐ L
INTEREST AND OTHER FINANCIAL EXPENSES
Interest on Borrowings from SIDBI 6931.39 7721.41
Interest on Bonds 10080.15 8530.59
Interest on borrowings from Banks 54.59 142.44
Interest on Fixed Deposits 1056.64 1031.74
Guarantee Commission to State Government 1182.79 946.64
Stamp Duty to GOK 0.00 53.95
Total: 19305.56 18426.77
Schedule‐ M
PERSONNEL EXPENSES
Salaries and Allowances
(a) Managing Director 11.02 21.02
(b) Staff & Officers 5490.55 4908.98
(c) VRS Compensation 44.35 5545.92 79.82 5009.82
Medical Expenses
(a) Managing Director 0.06 0.11
(b) Staff & Officers 128.53 128.59 136.23 136.34
Contribution to Provident Fund 472.49 428.65
Staff Welfare Expenses 115.82 112.83
(Amount : ` lakh)
Year ended Year ended 31‐03‐2014 31‐03‐2013
Schedule ‐ N
ADMINISTRATIVE EXPENSES
Travelling Expenses:
i) Managing Director 0.30 2.73
ii) Directors 2.18 3.97
Iii) Staff & Officers 312.61 315.09 320.81 327.51
Sitting Fees to Directors 0.88 1.49
Rent, Taxes & Insurance 152.27 149.38
Postage, Telegrams & Telephones 40.07 41.78
Motor Car Expenses 80.96 84.06
Printing & Stationery 30.84 57.33
Publicity and Advertisement 6.45 14.94
Books, Periodicals & Newspapers 3.17 2.96
Repairs, Renewals and Maintenance 96.06 82.94
Bank charges & Commission 2.96 2.16
Remuneration to Auditors:
i) Audit fees 2.77 2.11
ii) Reimbursed Expenses 0.10 2.87 0.10 2.21
Legal charges 0.26 7.63
Profl and Consultancy charges 50.73 271.28
Board Meetings / AGM expenses 6.11 8.89
Membership fees / Subscriptions for Institutions 1.19 0.84
Sponsorship Fees 0.35 6.57
Other Expenses 54 25 39 57
(Amount : ` lakh)
(Amount : ` lakh)
PSEs Year
Cauvery Karnataka Neeravari Neeravari Nigam Ltd. Nigam Ltd
Krishna Bhagya Jala Total Nigam Ltd.
2007 ‐08 3000.00 12000.00 0.00 15000.00 2008 ‐09 5383.46 8703.00 5913.54 20000.00 2009 ‐10 6000.00 0.00 5000.00 11000.00 2011 12 0.00 4200.00 10800.00 15000.00 Total 14383.46 24903.00 21713.54 61000.00
Disclosure as per AS 15 ‐ Revised‐ Defined Benefit Plans‐Gratuity Amount :
2580.59
The incremental liability of `467.40 lakh for FY 2013‐14 as per actuarial valuation has been fully provided for. b) Disclosure as per AS 15‐R‐Defined Benefit Plans‐ Employees Leave Salary
Amount :
The Corporation's predominant risks and returns are from the segment of finance and finance related activities, which constitute the major revenue of the Corporation for reporting period. Since this being a single business segment, the segment information as per Accounting Standard 17 “Segment Reporting” is not disclosed.
21) As a part of CDR package extended to a borrower, NCD outstanding amount of `240.00 lakh has been restructured for repayment. Of the total simple interest overdue there on of `159.04 lakh, `79.52 lakh is converted into funded interest term loan repayable from 2013‐14 to 2015‐16. Redeemable preference shares have been issued for the balance of `79.52 lakh due for redemption from 2016‐17 to 2019‐2020. In accordance with the guidelines issued by SIDBI the preference shares have been treated as investment with corresponding credit to interest capitalization account. The income will be recognized in the year of repayment/redemption as per the guidelines of SIDBI. Payment has not been received and therefore the interest capitalization account is continued.
22) Reporting under AS 29 : (Amount : ` lakh)
23) An amount of ̀ 41.35 lakh was paid to Official Liquidator during the FY 2011‐12 by debiting Other Debits recoverable in pursuance of the court order in the case of Pavan Alloys Pvt Ltd. The amount represents sale proceeds of secured assets realised and appropriated to loan account by corporation in the earlier year. The amount is continued to be shown as recoverable.
24) The difference in the bank reconciliation to the extent of `14.52 lakh as indicated in the previous financial year has been rectified by passing the necessary entries. Leftover BRS difference of `58.90 lakh which could not be reconciled due to want of information/details has been written back as income in the P&L account.
25)a) Service Tax payment of `4.84 lakh has been made on 31‐12‐2013 under VCES. Pending issue of VCES form‐3, eligible input credit of `2.42 lakhs has not been taken. The benefit has been carried to FY 2014‐ 15 by passing necessary entries.
b) Payment of service tax has been made on the income on account of the commission received from IFFCO‐TOKIYO General Insurance Company Ltd (ITGI). The payment for the service is interpreted as covered under the reverse tax mechanism issued vide notification No.15/2012‐ ST dated 17‐03‐2012 by the Service Tax Department, the liability stands on ITGI Ltd. The consequent credits, if any, available on this account are pending to be assessed and accounted.
26) The income on account of commission received from ITGI Ltd, in the absence of system for verification internally, has been accounted on receipt and communication and admission of accruals from the said
Schedule‐ O
II SIGNIFICANT ACCOUNTING POLICIES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2013‐14
1. Basis of Preparation of Financial Statements:
These financial statements have been prepared and presented under the historical cost convention and accrual basis of accounting, unless otherwise stated, and in accordance with the generally accepted accounting principles (“GAAP”) in India and Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and conform to the statutory requirements prescribed under the State Financial Corporations' (SFCs) Act, 1951, circulars and guidelines issued by the Small Industries Development Bank of India (SIDBI).
2. Use of Estimates:
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.
3. Revenue Recognition :
i) Interest on Loans and Advances is accounted on accrual basis except interest on advances identified as Non Performing Assets (NPAs) as per the guidelines of SIDBI which is accounted on the basis of receipt of cash/ cheques and realization thereof.
ii) Investigation fees, up‐front fees, etc are accounted on the basis of receipt.
iii) Dividend income is accounted on declaration of dividend for the relevant year.
iv) Interest on investments is accounted on accrual basis.
v) Residual income is accounted on accrual basis.
vi) Service tax/VAT collections are treated as liabilities and input credits and payments are adjusted against the liability.
4. Fixed Assets and Depreciation:
i) Fixed Assets, including leased assets but excluding free and leasehold lands, buildings are accounted for on historical cost basis.
ii) Free and leasehold land and buildings are stated at revalued amounts based on market value as on
31st March 2008 on the basis of technical evaluation and reduced by the amounts transferred to profit and loss account, each year.
iii) Costs directly incurred on acquisition / taken over assets are capitalized.
iv) Depreciation is provided on straight line method at the following rates :
v) Depreciation on additions made during the year is provided for the full year and in respect of sale / disposal no depreciation is provided in the year of sale / disposal.
vi) Revalued amounts in respect of buildings, including building on lease‐hold land are depreciated over the remaining useful life of the asset. Revalued amount in respect of land at No 1/1, Thimmaiah Road, Bangalore ‐ 52 is amortised over the balance lease period, commencing from FY 2008‐09.
vii) Depreciation on account of revaluation of assets is debited to profit and loss account with a corresponding withdrawal of amount from the Revaluation Reserve account from the year following the year of revaluation.
viii) Depreciation on all the leased assets is provided on straight ‐ line method over the primary period of lease.
ix) Assets whose actual cost does not exceed ` 5,000 are fully depreciated in the year of purchase.
x) Depreciation on additions or extensions that become an integral part of the existing assets is provided over the remaining useful life of the asset.
5. Lease Accounting :
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 equalisation / 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 Hire Purchase.
6. Investments :
Investments are classified as “Held for Maturity” and “Available for sale” category and provision for net diminution in the value of investment is made as per the guidelines issued by RBI/SIDBI
7. Advances :
Loans and Advances, including Hire Purchase Advances are classified as Standard, Sub‐standard, Doubtful and Loss assets based on the prudential norms prescribed by the SIDBI. Necessary provisioning required thereon has also been arrived at as per the SIDBI guidelines. Provisions have been netted off against loans and advances / other dues.
8. Appropriation of Repayments :
i. Loan receipts are appropriated as follows :
a. Other debits / dues b. Interest c. Principal
ii. (A) Receipts in cases of appropriation of sale proceeds of financed assets taken over under Section 29 of the SFCs ACT 1951, are appropriated as follows :
a. Principal b. Other debits / dues c. Interest
(B) in respect of sale proceeds of other secured assets appropriation is done as per clause (i) above.
iii. Appropriation in case of One time settlements (OTS) is based on the specific approvals.
9. Staff Benefits (AS 15) :
(i) Contributions to the employees' provident fund are recognized as an expense at the un‐ discounted amount in the profit and loss account of the year in which the related service is rendered.
(ii) Post employment and other long term employee benefits viz., Contribution to Gratuity, Leave encashment etc, are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long‐term benefits are charged to the profit and loss account.
(iii) The compensation paid towards VRS is expensed in the year of incidence.
10. Impairment of Assets (AS 28) :
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
11. Borrowing costs (AS 16) :
Borrowing costs that are attributable to the acquisition or construction of qualifying asset are capitalized as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other indirect costs are charged to revenue.
12. The corporation follows the guidelines of Segment Reporting as required under AS 17 issued by ICAI.
13. Provisions for Current and Deferred Tax (AS 22)
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961.Deferred tax resulting from “timing differences” between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.
14. Provision, Contingent Liabilities and Contingent Assets: (AS 29)
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.
CA N Aswatharam Chairperson & Managing Director
Directors As per our Report of even date For A.R.Viswanathan & Co.,
Sriyuths Chartered Accountants 1. S Ananthan Firm Registration No. 004765 S 2. K Sathianandan 3. Siddalingappa (CA SHRADDHA .A.V) 4. C Basavegowda Partner
Membership No. 227999 Place : Bangalore Place: Bangalore Date : 30‐06‐2014 Date: 30‐06‐2014
Particulars
a. b.
c.
Catogory
(D) PARTICULARS OF ACCOUNTS RESTRUCTURED Figures in bracket indicate previous year's figures Restructuring under CDR Mechanism & SME Debt Restructuring‐Nil, PY‐Nil
(E) 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,
(Amount : ` lakh)
(Amount : ` lakh)
(Amount : ` lakh)
(K) DETAILS OF GROSS ADVANCES, GROSS NPAs, NET ADVANCES AND NET NPAs
(Amount : ` lakh)
Sl.No.
1 2 3 4 5 6 7 8
Particulars Standard Advances Gross NPAs* Gross Advances** (1+2) Gross NPAs as a percentage of Gross Advances (2/3)(in%) Deductions (i) Provisions held in the case of NPA Accounts as per asset
classification (including additional Provisions for NPAs at higher than prescribed rates)
(ii) DICGC / ECGC claims received and held pending adjustment (iii) Part payment received and kept in Suspense Account or any
other similar account (iv) Balance in Sundries Account (Interest Capitalization ‐
Restructured Accounts), in respect of NPA Accounts (v) Floating Provisions (vi) Provisions in lieu of diminution in the fair value of restructured
accounts classified as NPAs (vii) Provisions in lieu of diminution in the fair value of restructured
accounts classified as standard assets Net Advances (3‐5) Net NPAs {2‐5( i + ii + iii + iv + v + vi)} Net NPAs as percentage of Net Advances (7/6) (in%)
Amount 174519.45 32773.44 207292.89 15.81%
27753.44
‐‐ 296.81
‐‐
‐‐
38.92
75.72 179128.00 4608.55 2.57%
* Principal dues of NPAs plus Funded Interest Term Loan (FITL) where the corresponding contra is parked in Sundries Account (Interest Capitalization ‐ Restructured Accounts), in respect of NPA Accounts.
** For the purpose of this Statement Gross Advances mean all outstanding loans and advances including advances for which refinance has been received but excluding rediscounted bills and advances written off at Head Office level.
KARNATAKA STATE FINANCIAL CORPORATION CASH FLOW STATEMENT
FOR THE PERIOD ENDED 31st MAR 2014 (Amount : ` lakh)
Particulars Year Ended Year Ended 31‐03‐2014 31‐03‐2013
Opening Balance:
‐‐ Cash 97.81 60.18
‐‐ Bank balances 3966.69 17381.96 ‐‐ Fixed Deposit with Banks 22492.07 8530.16
Sub‐Total (A) 26556.57 25972.30 Add: Cash Inflow
Share Capital ‐ Amount received on Share Application 5192.76 5366.42 Bonds and debentures ‐ (Secured / guaranteed bonds) 0.00 40000.00
Borrowings ‐ SIDBI 0.00 10700.00
Deposits 22622.10 10055.96
Sale of Investments 0.00 85.45
Loans and advances ‐ Recoveries ‐‐ Term loans (including working capital) 58018.01 54915.35 ‐‐ HPFS 1.73 51.14 ‐‐ Margin Money 0.00 0.25
Subsidy received from State Government 6919.64 12342.00 Subsidy recovered from parties not fulfilling the terms and conditions for availing subsidy 0.00 0.00 Subsidy received from SIDBI 106.69 270.17 Other Inflows 0.00 1075.07 Sale of fixed assets 16.87 157.05 Net decrease in working capital 1952.00 245.50
Less: Cash Outflow
Repayment of Bonds and debentures ‐ (Secured / guaranteed) 2685.00 8317.00
Repayment of Borrowings ‐‐ SIDBI Refinance
‐‐ SIDBI SSC
‐‐ Scheduled banks ‐‐ Margin Money
13626.91 15316.11 93.39 454.73
1471.47 149.80 7.86 0.10
Repayment of Deposits 15364.80 10499.20
Investments
(a) In Insurance Cos 947.53 3166.65
(b) Others 0.00 15150.00
Disbursements of Loans and advances: ‐‐ Term loans (including working capital) 70746.78 73470.44 ‐‐ Margin Money
Purchase of fixed assets 43.40 38.64 Subsidy disbursed from Amounts received from State Government for Subsidy 7104.09 9960.03
Subsidy disbursed from Amounts received from SIDBI for Subsidy 106.69 272.09
Amounts refunded to State Government for subsidy recovered from parties for not fulfilling the terms and conditions for availing subsidy Other Outflows 1162.50 0.00 Net increase in working capital 0.00 0.00 Cash outflow from operations 0.00 0.00
Total Cash Outflow (c) 113360.42 136794.79 Closing balances:
‐‐ Cash 64.70 97.81 ‐‐ Bank Balances 3778.98 3966.69
d h k
KARNATAKA STATE FINANCIAL CORPORATION Bonds outstanding position
(Amount : ` lakh)
Sl Series No No
ISIN
Description of Redemption
bond
Outstanding as on
31‐03‐2013
Bonds issued
Outstanding Bonds
as on redeemed
31‐03‐2014 30%,30%,40% on
1 5
2 6
3 7
INE549F0 8434
INE549F0 8442
INE549F0 9051
KSFC 7.45% Bonds 2016
KSFC 7.64% Bonds 2018
KSFC 8.39% Bonds 2019
28‐01‐2014 28‐01‐2015 28‐01‐2016 50% each on 28‐01‐2017 28‐01‐2018
25% 13‐02‐2018
75% 13‐02‐2019
8950.00 0.00
10000.00 0.00
10000.00 0.00
2685.00 6265.00
0.00 10000.00
0.00 10000.00
4 8 5 9
INE549F0 8459
INE549F0 8467
KSFC 8.23% Bullet Payment Bonds 2020 on 27‐01‐2020 KSFC 8.39% Bullet Payment Bonds 2020 on 24‐06‐2020
7700.00 0.00
12300.00 0.00
0.00 7700.00
0.00 12300.00
6 10
7 12
INE549F0 8475
INE549F0 8483
KSFC 8.60% Bonds 2022
KSFC 9.23% Bonds 2019
Bullet Payment
on 25‐01‐2022
30%,35%,35% on
02.01.2017 02.01.2018 02.01.2019
10000.00 0.00
10000.00 0.00
0.00 10000.00
0.00 10000.00
8 13
9 14
10 15
INE549F0 8491
INE549F0 8509
INE549F0 8517
KSFC 9.49% Bonds 2023
KSFC 9.24% Bonds 2024
KSFC 9.08% Bonds 2025
Bullet Payment on 02‐01‐2023
50%, each on
18‐10‐2023 18‐10‐2024 25%, each on 04‐02‐2022 04‐02‐2023 04‐02‐2024 04‐02‐2025
10000.00 0.00
20000.00 0.00
20000.00 0.00
0.00 10000.00
0.00 20000.00
0.00 20000.00
DEBENTURE TRUSTEE CONTACT DETAILS
FOR KSFC PRIVATE PLACEMENT BOND ISSUES
1) Vijaya Bank Merchant Banking Division, Head Office, 41/2, M.G. Road,Bangalore‐560 001 Phone: 080‐25584066, Extension: 328 Email: [email protected] Website: www.vijayabank.com
Bond description KSFC 7.45% Bonds 2016 KSFC 7.64% Bonds 2018
ISIN INE 549F 08434 INE549F08442
2) Canara Bank Debenture Trust Department Executor, Trustee & Taxation Section BgSE Towers, No 51, 1st Cross, J C Road, Bangalore‐560 027
Tel: (080) 22239186/22223170, Fax: (080) 22233849 Email: [email protected]
KSFC
Bond description
ISIN
KSFC KSFC KSFC 8.39% 8.23% 8.39%
Bonds 2019 Bonds 2020 Bonds 2020
INE 549F INE549F INE549F 09051 08459 08467
8.60% Bonds 2022
INE549F 08475
KSFC KSFC 9.23% 9.49%
Bonds 2019 Bonds 2023
INE549F INE549F 08483 08491
3) State Bank of Hyderabad Assistant General Manager # 200/Y, 3rd Block, 12thMain Road, 50th Cross, Rajajinagar,Bangalore,560 010 Tel : 08023151047/2338, Fax :08023402962 Email: [email protected]
Bond
description
KSFC 9.24% Bonds 2024 KSFC 9.08% Bonds 2025
