Products & Services

(Upto 31st July 2009)

Karnataka State Financial Corporation

KARNATAKA STATE FINANCIAL CORPORATION

Kaushik Mukherjee, IAS Managing Director Dear Entrepreneur: KSFC has been playing a pivotal role in the development of Micro, Small and Medium scale Enterprises (MSMEs) in the State of Karnataka for the last 50 years of its existence. Since inception, KSFC has assisted more than 1.60 lakh units with cumulative sanction of more than Rs.9,102 crore out of which about 50% is towards SMEs. Amendments to SFCs Act provide wide-ranging scope in financial assistance and operational flexibility. Keeping this in view, KSFC has re-engineered itself to ensure utmost customer satisfaction with new energy, thrust and speed. In line with this, the Corporation has put in place comprehensive, client-friendly, need-based policies in the areas of credits and recoveries. Apart from setting standards of performance, these policies would also achieve the objective of transparent governance. Keeping the above in mind, we have brought out this fairly exhaustive brochure for your benefit. The brochure gives details of functions of KSFC, financial services available, various schemes in operation and procedures for availing the financial assistance. Based on the feed back from our existing loanees, a chapter has been added about the frequently asked questions (FAQs). I am sure you will find this book very useful and informative. With regards, Yours sincerely,

Bangalore

(Kaushik Mukherjee)

CONTENTS
Introduction Financial Services Area of Operation Purpose and limit of assistance Lending Policy - Norms and Parameters Industrial Policy of GOK (2009-2014) Credit Linked Capital Subsidy Scheme (CLCSS) Technology upgradation for textile industries Interest Subsidy Scheme for Scheduled Caste and Tribe Entrepreneurs Privileged Entrepreneurs' Scheme Assistance to Construction Activity (Term Loans)

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1 2 5 6 8 11 17 19 22 24 26 29 31 33 34 36 38 40 41 43 46 48 50

Assistance to Construction Activity (Corporate Loan) General Corporate Loan Scheme Assistance for Construction of Roads Single Window Scheme Working Capital Term Loan - For existing units Line of Credit for purhcase of Raw Materials Assistance for Marketing Related Activities Acquisition of Existing Assets & Enterprises Assistance to Entertainment Industry Assistance to Tourism Related Activities Assistance to Health Care Services Scheme for Small Road Transport Operators

Acquisition of ISO 9000 Series Certification Scheme of Financial Assistance to Food Processing Industries Rental Discounting Scheme Scheme for Financing Energy Saving Projects General Scheme Scheme for Micro Finance Activity Hire Purchase & Financial Services Hire Purchase Non-Convertible Debentures Factoring Foreign Letter of Credit Other Financial Services Procedures Frequently Asked Questions (FAQs) Annexure-I Interest Rate Structure Annexure-II Project Profile Annexure-III Bio-data and Networth Zonal Offices Super 'A' Grade Branch Office 'A' Grade Branch Offices 'B' Grade Branch Offices

51 52 53 56 58 60 62 63 65 67 70 71 75 78 82 86 94 98 99 100 102

1 INTRODUCTION

Karnataka State Financial Corporation is a State level financial institution established by the State Government in the year 1959 under the State Financial Corporations Act 1951 to meet mainly the long term financial needs of Micro, Small and Medium Enterprises (MSMEs) in the State of Karnataka. Today, while the State economy is making rapid strides in the global market, KSFC is moving in tandem. As a pioneering and responsive financial institution, KSFC is fine-tuned to fulfill the plans and aspirations of entrepreneurs by extending all possible assistance. Amendments to the SFCs' Act provide for extending wide ranging scope of assistance and operational flexibility. Keeping this in view, KSFC has re-engineered itself to ensure utmost customer satisfaction with new energy, thrust and speed. In the 50 years of its existence, KSFC has contributed most significantly for the growth of SMEs, backward area development and promotion of first generation entrepreneurs. Its achievement in these areas is unparalleled. Since inception, KSFC has assisted more than 1.60 lakh units with cumulative sanction of more than Rs.9,102 crore out of which about than 50% is towards SMEs. KSFC an ISO 9001:2000 certified organisation is proud to have played a major role in the industrial development of the State. It is also the proud privilege of KSFC to have assisted many industries that are internationally recognised like INFOSYS & BIOCON.

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FINANCIAL SERVICES
ELIGIBLE ACTIVITIES FOR FINANCIAL SERVICES KSFC is a financial super market. It extends all types of financial assistance in the form of long-term loans, short-term loans (in the form of working capital term loans and corporate loans) and other financial services. KSFCs assistance covers almost all types of industrial and service sectors. The SFCs' Act prescribes broadly the types of activities, which are eligible for financial assistance from the Corporation. The Act also provides for SIDBI to include newer areas of activities for financial assistance from time to time. This apart, the Corporation has also evolved its own schemes under broad guidelines of SFCs' Act depending upon market potential. The activities which are eligible for financial assistance from the Corporation are grouped into following three broad categories: 1. 2. 3. Activities as listed out in the SFCs' Act; Activities specifically permitted by SIDBI; Activities formulated by the Corporation.

As listed out in the SFCs' Act: The State Financial Corporations (Amendment) Act, 2000, provides the list of activities which can be covered under the list of industrial concern engaged or to be engaged in: i. ii. iii. iv. Manufacture, preservation or processing of goods; Mining or development of mines; Hotel industry; Transport of passenger or goods by road or by water or by air (or by rope-way or by lift),
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v. vi.

Generation or distribution of electricity or any other form of power; Maintenance, repair, testing or servicing of machinery of any description or vehicles or motor boats or trailers or tractors or vessels. Assembling, repairing or packing any article with the aid of machinery or power,

vii.

viii. Setting up or development of an industrial area or industrial estate; ix. x. xi. xii. Fishing or providing shore facilities for fishing or maintenance thereof; Providing weigh bridge facilities; Providing engineering, technical, financial management, marketing of other services or facilities for industry; Providing medical, health care or other allied services.

xiii. Providing software or hardware services relating to information technology, telecommunications or electronics including satellite linkage and audio or visual cable communication. xiv. Setting up or development of tourism related facilities including amusement parks, convention centers, restaurants, travel and transport (including those at airports), tourist service agencies and guidance and counseling services to the tourists; Construction;

xv.

xvi. Development, construction and maintenance of roads;

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xvii. Providing commercial complex facilities and community centers including conference halls; xviii. Floriculture; xix. xx. Tissue culture, fish culture, poultry farming, breeding and hatcheries; Service industry, such as altering, ornamenting, polishing, finishing, oiling, washing, cleaning or otherwise treating or adapting any article or substance with a view to its use sale transport, delivery or disposal; Research and development of any concept technology, design, process or product whether in relation to any of the matter aforesaid, including any activities approved by the Small Industries Bank; or

xxi.

xxii. Such other activity as may be approved by the SIDBI;

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AREA OF OPERATION
Activities permitted by SIDBI: i. Construction / buying of ready-built showrooms and sales out-lets (only fixed assets are eligible for financing, items kept for sale are not eligible for financing); Construction / buying of ready-built area for establishing departmental stores and shopping malls (only fixed assets are eligible for financing, items kept for sale are not eligible for financing); Setting up of Medical Stores (only fixed assets are eligible for financing, items kept for sale are not eligible for financing); Setting up of vocational training centers for imparting technical knowledge to entrepreneurs for setting up and running units efficiently and to produce quality goods; Setting up entertainment industry including production of films.

ii.

iii.

iv.

v.

The area of operation covers the entire State of Karnataka. KSFC has Branches in all the district head quarters. The industrial units / service sectors established or to be established within the State are only eligible for assistance. The Branch Offices of the Corporation are adequately delegated with powers of sanction and disbursement. Generally, requirements of financial assistance upto Rs.100.00 lakhs are handled by the concerned Branch Office itself. If the requirement of loan is more than Rs.100.00 lakhs, the entrepreneurs will have to approach Head Office. Based on the activities permitted under the SFCs Act, the Corporation has formulated various schemes for extending financial assistance. Brief particulars of various schemes are given under the schemes of the Corporation.
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PURPOSE AND LIMIT OF ASSISTANCE

Being a term lending agency, Corporation extends financial assistance normally for creation of fixed assets in the form of land, building, plant & machinery and miscellaneous assets required for the project. However, the Corporation also extends short or medium term loans in the form of working capital term loan and corporate loan to meet the urgent working capital requirements of the new and existing units. The Corporation extends financial assistance for creation of fixed assets as also working capital for current assets under single window type of assistance in deserving cases. KSFC extends financial assistance for establishing new units as well as for expansion / diversification / modernisation of the existing units. Limit of Accommodation: The following is the maximum limit of loan that could be availed by the entrepreneurs: Category i. Proprietary / Partnership Maximum Loan Rs.200.00 lakhs Rs.500.00 lakhs

ii. Corporate bodies (both private / public Ltd), and registered co-operative societies

In respect of new units / existing units operating successfully, maximum limit can be extended upto Rs.800.00 lakhs for category (i) and Rs.2000.00 lakhs for category (ii). In respect of category (ii) the financial assistance can be granted provided paid up capital and free reserves do not exceed Rs.30.00 crore.

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If the requirements of funds for the project is substantial and cannot be extended by the Corporation alone, then the requirement of loan for such projects can be met in consortium with other Financial Institutions.

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LENDING POLICY NORMS AND PARAMETERS

Lending Policy Of The Corporation: The Corporation formulates lending policy at the beginning of each financial year. The loans are given based on the lending policy of the Corporation. The lending policy covers various aspects like the group exposure, thrust sectors, sectors in the negative list, promoters contribution, security margin, collateral security norms etc. The industrial policies of the State and Central Government are also taken into account while formulating the lending policy of the Corporation. Policy On Minimum Loan Size: The policy on the minimum loan size of Rs.5.00 lakhs is applicable for all activities except medical and veterinary doctors where minimum limit is Rs.2.00 lakhs. The minimum size of the loan for others is reduced to Rs.2.00 lakhs in case of existing units going in for expansion / modernisation. Promoters' Contribution: The minimum promoter s contribution as the percentage of the total project cost prescribed in various schemes varies between 22.5% and 33.3% depending on the location of the project, various schemes of SIDBI operated by the Corporation, class of entrepreneur etc., Debt Equity Ratio (DER): The Corporation adopts the norms for Debt Equity Ratio as per the guidelines issued by the Small Industries Development Bank of India from time to time.
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The present norms are : Scheme RSR Scheme Modernisation Scheme D.E.R * Flexible Projects : Overall : Others: Upto Rs.10.00 lakhs Above Rs.10.00 lakhs Additional Loans (within overall limit) Residential Apartment Projects Projects : Overall : 3:1 2:1 2:1 2:1 1:1 4:1 2:1

* Central / State subsidy if any available for the implementation of the project will be treated as equity for the purpose of DER calculation. Debt Service Coverage Ratio (DSCR) : The repayment period of loan is fixed by the Corporation with due regard to the cash generation & profitability of the project. For this purpose, average DSCR ranging between 1.5:1 and 2:1 has been accepted as reasonable. In projects involving mainly land / building such as commercial complexes, software technology parks, industrial estates, hotels etc., with assured income, the DSCR can be relaxed up to 1.25 : 1.00. The DSCR indicates the ability of the project to service the debts during the currency of the loan.
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Repayment Period: The repayment period of the term loan varies between 3 to 8 years including moratorium period of maximum 2 years depending on the period of implementation. In respect of corporate loan, the maximum repayment period is 36 months including six months moratorium. Security : In addition to the primary security i.e., assets financed by the Corporation, collateral security as per the lending policy of the Corporation is insisted. The collateral security requirement depends upon the type of project, location, sector, quality of primary assets etc.,

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INDUSTRIAL POLICY OF G O K (2009 2014)

Government of Karnataka has formulated industrial policy for the period 2009-14. For details, the entrepreneurs are advised to refer the booklet on New Industrial Policy brought out by the Department of Industries and Commerce, Government of Karnataka. For the purpose of administering graded scale of incentives and concessions the taluks are classified into 4 zones depending on the backwardness of taluks and broad guidelines of Dr.D.M.Nanjundappa committee report. Zone 1 : 39 taluks Most Backward Taluks. Zone 2 : 40 taluks More Backward Taluks. Zone 3 : 85 taluks Backward Taluks. Zone 4 : 12 taluks- Industrially Developed Taluks. 1. Investment Promotion Subsidy: a) Micro Mfg Enterprises: Zone-1 : 25% VFA* (max.Rs.10.00 lakhs) Zone-2 : 20% VFA (max.Rs.7.5 lakhs) Zone-3 : 15% VFA (max.Rs.5.00 lakhs) Zone-4 : NIL b) Small Mfg Enterprises; Zone-1 : 20% VFA (max.Rs.20 lakhs) Zone-2 : 15% VFA (max.Rs.15 lakhs) Zone-3 : 10% VFA (max.Rs.10 lakhs) Zone-4 : NIL c) Medium Mfg Enterprises (minimum 25 workers): Zone-1 : Rs.30.00 lakhs Zone-2 : Rs.20.00 lakhs Zone-3 : Nil Zone-4 : Nil * VFA - Value of Fixed Assets
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Notes: i. 25% of the subsidy sanctioned amount will be released every year on refund basis towards the payments made by the unit in respect of gross VAT, ESI and PF and power tariff. In cases of enterprises which do not use power and not covered under VAT, EPF, ESI the investment subsidy will be released against the loan dues. ii. This incentive is available to enterprises availing term loan to an extent of minimum 50% cost of the fixed assets only.

iii. The unit shall avail sanctioned subsidy within the period of five years. Additional subsidy to SC/ST, Women, Physical challenged, Ex-servicemen Entrepreneurs and enterprises coming up in most Backward taluks of Hyderabad Karnataka region. Additional 5% subsidy subject to a maximum of Rs.1.00 lakhs, Rs.3.00 lakhs and Rs.5.00 lakhs for Micro, Small and Medium Manufacturing Enterprises respectively. 2. Exemption from Stamp Duty: MSME, Large and Mega Projects: Stamp duty has to be paid in respect of (i) loan agreements, credit deeds, mortgage and hypothecation deeds executed for availing term loans from State Govt and / or State Financial Corporation, Industrial Investment Development Corporation,
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National Level Financial Institutions, Commercial Banks, RRBs and other institutions which may be notified by the Govt from time to time for the initial period of five years only and (ii) for lease deeds, lease- cum-sale and absolute sale deeds executed by industrial Enterprises in respect of industrial plots, sheds, industrial tenements, by KIADB, KSSIDC, KEONICS, KSIIDC, Industrial Co-operatives and approved private industrial estates shall be exempted as below; Zone 1 : 100% Zone 2 : 100% Zone 3 : 75% Zone 4 : Nil Concessional Registration Charges MSME, Large and Mega Projects : For all loan documents and sale deeds as specified in 2 above, the registration charges shall be at a concessional rate of Rs.1 per 1,000. 3. Incentives for Export Oriented Enterprises; MSME, Large and Mega Projects (a) Exemption from payment of ET For 100% EOUs, 100% exemption from payment of ET on Plant & Machinery and Capital goods for an initial period of 3 years from the date of commencement of project implementation irrespective of zones.
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For other EOUs, (Minimum Export obligation of 25% of their total turnover) 100% exemption from payment of ET on raw materials, inputs, component parts & consumables (excluding petroleum products) for an initial period of 3 years from the date of commencement of commercial production in Zone 1,2, and 3 and 50% in Zone 4. (b) Refund of Certification Charges: Refund of expenses incurred for compulsory marking like Conformity Europeenne (CE), China Compulsory Certificate (CCC), etc., to the extent of 50% of expenses subject to a maximum of Rs.2.00 lakhs per unit for both 100% and other EOUs in all zones. Definitions of MSMEs (Micro, Small & Medium Enterprises) 1. The enterprises engaged in the manufacture or production of goods pertaining to any industry: a. Micro Enterprises: Enterprises in which the investment in plant and machinery is less than Rs. 25.00 lakhs irrespective of the location of the unit. b. Small Enterprises: Enterprises in which the investment in plant and machinery is more than Rs.25.00 lakhs but does not exceed Rs. 500.00 lakhs. c. Medium Enterprises: Enterprises where investment in plant and machinery is more than Rs.500.00 lakhs but does not exceed Rs.1000.00 lakhs.
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2. The enterprises engaged in providing or rendering of services: a. Micro Enterprises: Engaged in providing services where the investment in equipment is upto Rs.10.00 lakhs. b. Small Enterprises: Engaged in providing services where the investment in equipment is more than Rs.10.00 lakhs but does not exceed Rs.200.00 lakhs. c. Medium Enterprises: Engaged in providing services where the investment in equipment is more than Rs.200.00 lakhs but does not exceed Rs.500.00 lakhs. Large Scale Industry: An industrial unit which is not classified as Micro, Small and Medium Enterprise and with investments upto Rs.250.00 crore shall be classified as Large Scale Industry. Mega Project Means: Projects Rs. 250.00 crore and above. with an investment of

100% Export Oriented Units (EOUs): A 100% Export Oriented Unit is one which undertakes to export its entire production of goods subject to relaxation as permitted by GOI from time to time and as defined by it. Such enterprises may be set up either under the Export Oriented Units or under EPIP (Export Promotion Industrial Park) Scheme or under EHTP (Electronic Hardware Technology Park) Scheme or Software Technology Park Scheme or Special Economic Zone. Fixed Assets: Fixed Assets shall mean the total investment made on land, building and plant & machinery and such other productive assets like tools, jigs and fixtures, dies, utilities like boilers, compressors, diesel generating sets, cranes, material handling equipments and such other equipments directly related to production purposes.
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SCHEMES OF THE CORPORATION

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CREDIT LINKED CAPITAL SUBSIDY SCHEME (CLCSS)

Objective : The objective of the scheme is to facilitate technology upgradation of Micro and Small Enterprises (MSEs) in specified products / sub-sectors by providing 15% capital subsidy for induction of proven technologies approved under the scheme. The list of products / sub-sectors covered under the scheme is as per the approval of the Governing and Technology Approval Board (GTAB) constituted under this scheme. Eligible Borrowers Eligibility Criteria : Sole proprietary concerns, partnerships, co-operative societies, private and public limited companies. : Existing MSEs registered with the State Directorate of Industries who upgrade with the state of art technology, with or without expansion are eligible. New MSEs which are registered with the State Directorate of Industries and who set up proposed facility with the appropriate eligible and proven technology duly approved by GTAB are also eligible. Capital subsidy under the scheme shall be available for projects where term loans have been sanctioned by the eligible PLIs on or after 29th September 2005. Industry graduating from small scale to medium scale on account of sanction of additional loan under CLCSS shall be eligible for assistance.
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Others

: Promoters contribution, debt equity ratio etc., will be determined by the lending agency as per the existing norms. Units availing subsidy under the CLCSS shall not avail any other subsidy for technology upgradation from the Central / State / UT Govt. However, cases covered under National Equity Fund (NEF) scheme, which are otherwise eligible under CLCSS can also be covered under this scheme. For further details on scheme and also regarding activities covered the entrepreneurs are advised to refer CLCS scheme of Government of India. Note : This revised scheme is effective from September 29, 2005. The scheme is launched by Government of India, Ministry of SSI & ARI. (Prior to 2005 then existing parameters & guidelines will apply). The Scheme will be in operation upto 31st March 2012. SIDBI is designated as nodal agency for channelising assistance under the scheme.

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TECHNOLOGY UPGRADATION FOR TEXTILE INDUSTRIES

Objective : To provide encouragement to textile industrial units (including units in the cotton ginning and pressing sectors) in taking up technology upgradation and to modernise their production facilities. : Sole proprietary concerns, partnerships, co-operative societies, private and public limited companies in textile and cotton ginning and pressing industries. : Installation of specified types of machinery and for eligible activities in a new unit or in an existing unit by way of replacement of existing machinery and / or expansion. New units must set up their facilities only with the appropriate eligible technology. Promoters : Minimum 20% of the project cost. Contribution Terms of Assistance : Rate of interest: The prevailing rate of interest as applicable to SSI is charged. Refer interest rate table at Annexure-I Reimbursement of 5 percentage points of interest charged by the lending agency on the project of technology upgradation will be made available. However, for spinning machinery reimbursement will be 4 percentage points.
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Eligible Borrowers

Eligibility Criteria

 Repayment period: upto 5 years including a moratorium of upto 12 months. Security: 100% of portion of term loan earmarked for acquisition of intangible assets such as Technical knowhow, designs, drawings etc. 50% on loan earmarked towards proposed machinery for the first time borrowers and 30% on existing units having good track record. Programme Period : The scheme is with effect from 01.01.2007 upto 31.03.2012. In respect of prior case the then existing parameters & guidelines will apply Others : The scheme will provide an additional option to the powerlooms units to avail of 20% Margin Money subsidy under TUFS in lieu of 5% interest reimbursement on investment in TUF compatible specified machinery subject to a capital ceiling of Rs.200 lakhs and ceiling on margin money subsidy Rs.20 lakhs. A minimum of 15% equity contribution from beneficiaries will be ensured. The scheme will provide 15% Margin Money subsidy for SSI textile and jute sector in lieu of 5% interest reimbursement on investment in TUF compatible specified machinery subject to a capital ceiling of Rs.200 lakhs and ceiling on margin
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money subsidy Rs.15 lakhs. A minimum of 15% equity contribution from beneficiaries will be ensured. The scheme will provide 5% interest reimbursement plus 10% capital subsidy for specified machinery required in manufacture of technical textiles and garmenting machineries. (however, the units which have taken the sanction prior to 31.03.2007 but not started the commercial production, to be certified by Chartered Engineer and Chartered accountant, will be covered under the modified Scheme.) Certain imported second hand machinery have been permitted. The entire range of imported second hand machinery will now be ineligible under the scheme for any benefit except automatic shuttleless looms with the value cap of Rs.8.00 lakhs per machine and 10 years vintage and with a residual life of minimum 10 years. Investments like land, factory building, pre-operative expenses and margin money for working capital will now be ineligible for benefit of reimbursement under the scheme except meant for apparel sector and handloom with existing 50% cap. In case apparel unit is engaged in other activity, the eligible investment under this head will only be related to plant & machinery eligible for manufacturing of apparel.
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INTEREST SUBSIDY SCHEME FOR SCHEDULED CASTE / TRIBE ENTREPRENEURS

Objective Eligible borrowers

: :

Interest subsidy in respect of loans availed by SC/ST entrepreneurs. The Scheme is applicable only to the loan availed by the scheduled caste / tribe entrepreneurs. The promoters should be a first generation entrepreneurs. The interest subsidy under the scheme shall not be in addition to other interest subsidy schemes of GOK. If an entrepreneur has claimed interest subsidy under any other scheme of GOK, he will not be eligible to claim interest subsidy under this scheme. Units in the service sectors are also eligible to claim interest subsidy under the scheme. To be eligible for interest incentives under the scheme, the unit should not be in default in payment to the financial institutions. The units will be eligible for interest subsidy for a period of five years from the date of first disbursement of the loan by KSFC. The minimum loan size of Rs.5.00 lakhs for all activities except existing units going for upgradation / modernisation, medical and veterinary doctors minimum limit is Rs.2.00 lakhs.
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 KSFC will sanction loans under this scheme with normal interest rates. The difference between the lending rate of KSFC and effective rate of 4% p.a to the borrowers will be met by Government of Karnataka. Security : A relaxation of 25% in the requirement of minimum collateral security upto a loan amount of Rs. 25.00 lakhs, be considered in the case of entrepreneurs belonging to Scheduled Caste/ Tribe. However, for loans more than Rs. 25.00 lakhs, the collateral security requirement shall be as applicable to general category.

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PRIVILEGED ENTREPRENEURS' SCHEME

Objective : To meet short term funds requirements of the existing units which are under thrust / normal sectors of lending policy of the Corporation. Proprietary concern, partnership firm, private and public limited companies. a) The units have availed loan of Rs.10 lakhs and more from KSFC in the past and should have a good track record for at least 3 years. b) The account should have been in standard category during the last three years. c) In respect of rescheduled cases and cases covered under DRS-RSR, the loan can be extended, if the account is regular and continues to be in standard category for the last three years. d) The unit should be working on profitable lines i.e. the units should have earned net profits at least during the last three years as evidence by the audited financial statements. Extent of Finance Terms of Assistance: : : Minimum Rs.5.00 lakhs and Maximum Rs.100.00 lakhs Rate of Interest : Refer interest rate table at Annexure I. Repayment Period : The loan shall be repaid within 24 months with moratorium period of three months.
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Eligible Borrowers Eligible Criteria

: :

Security : The loans shall be secured by 100% collateral security. The security shall be by way of urban immovable properties or the surplus value of the existing immovable fixed assets of the units at SR value. No relaxation in collateral security requirements. LAFD/ : Processing Fee Following is the fee structure prevailing at present: Loans availed under the scheme for the first time: a. LAFD b. Upfront Fee : 0.25% + Service Tax : 0.25% + Service Tax

In respect of repeat borrowers under the scheme: a. LAFD b. Upfront Fee : 0.25% + Service Tax : 0.25% + Service Tax

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ASSISTANCE TO CONSTRUCTION ACTIVITY (TERM LOANS)

Objective : To provide assistance to the construction activity sector. The following are covered under the scheme:

Construction of commercial complex; Construction of godowns and warehouses; Construction / buying of ready built show rooms and sales outlets; Construction of residential apartments / group housing; Creation of infrastructure for professional educational institutions; Construction of industrial estates; Establishment of software parks; Formation of residential layouts;
Eligible Borrowers Purpose of assistance : Individuals, firms, companies and other eligible constitutions. : The assistance under this scheme is provided for construction of building. Interior decorating, air conditioning. Providing lift and communication facility. Any other facility connected with the construction activity. Formation of residential layouts. The building so constructed can be either leased (except group housing and residential apartments) or sold on outright basis with the prior approval of the Corporation.
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Land

: The land shall be owned or leased for a minimum period of 30 years. The lease period may be relaxed but not less than 20 years with the prior approval of the Corporation. When the freehold rights of land are assigned to the Corporation the lease period can be 10 years and lease need not be registered. In respect of commercial complexes the land has to be located at taluk head quarters / town municipality, district head quarters and city. In respect of residential apartment / group housing, the land should be located in Bangalore, Mysore, Mangalore, Udupi, Belgaum, Hubli-Dharwad, Davanagere, Gulbarga, Haveri, Bagalkot, Bijapur and Bellary cities. In respect of assistance to show rooms and sales outlets, items / activities displayed or kept for sales in show rooms, sales outlets, departmental stores, shopping malls etc., are not eligible for financing.

Extent of Loan

: Minimum of Rs.10.00 lakhs and maximum as per the prevailing norms applicable. Any relaxation in minimum limit may be considered only with the prior approval of the Competent Authority.

Promoters : Minimum promoters contribution shall be contribution 25% of project cost.

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Terms of Assistance

: Rate of interest : Refer interest rate table at Annexure-I. Security : First charge on the land, building and other assets to be created out of the loan. Collateral security as may be deemed necessary and as per existing guidelines. Repayment period : From 3 to 8 years including moratorium of 2 years, depending on the nature of projects.

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ASSISTANCE TO CONSTRUCTION ACTIVITY (CORPORATE LOAN)

Objective : To provide financial assistance to property developers, construction companies and firms for construction of group housing, commercial complexes, software parks and infrastructure projects like roads, flyovers, bridges etc.

Eligible : Individuals (contractors), firms and companies borrowers and who have been in operation for atleast 5 years other terms and have proven profit record for at least previous 3 years and : should not be in default with commercial banks / financial institutions; the networth comprising of equity and reserves and surplus should not exceed Rs.20.00 crore; the project cost should not exceed Rs.20.00 crore. Extent of finance : Upto Rs.200.00 lakhs in case of proprietary and partnership concerns and Rs.500.00 lakhs in case of Private and Public Limited Companies. However, the loan amount shall not exceed 20% of the average sales recorded in the previous 3 years OR / AND shall not exceed 20% of the estimated investments in the projects / orders on hand. Terms of Assistance : Rate of interest : Refer interest rate table at Annexure-I
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Repayment period : Upto 5 years including a moratorium of 6 18 months depending upon the nature of the project. Security : 150% of the loan amount in the form of immovable assets / FD / LIC / NSC etc. Third party collateral not acceptable. Escrow mechanism required.

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GENERAL CORPORATE LOAN SCHEME

Objective : The objective of the scheme is to extend short term loans to the existing successful units who require urgent working capital funds either to meet the gap in the working capital requirements or funds required for executing the rush of orders. This loan is also considered for developing / expanding new markets and opening LC for purchase of new equipments till a term loan is sanctioned and released by the financial institutions. The Corporation also extends corporate loan for meeting the statutory dues to the Government like payment of Income Tax, Sales Tax, Excise Duty etc., : Existing units eligible for financial assistance from KSFC under the SFCs' Act, 1951 are eligible to be covered under the scheme. : Minimum of Rs. 5.00 lakhs and maximum of Rs. 200.00 lakhs in case of proprietary and partnership firms and Rs. 500.00 lakhs in respect of corporate bodies, public & private limited companies and registered co-operative societies.

Eligibility Criteria Limit of Assistance

Promoters : Minimum of 25% of the project cost. Contribution Terms of Assistance : Interest : Refer interest rate table at : Annexure-I. Repayment period : Not exceeding 24 months including moratorium period of 6 months (maximum).
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Security : Assets free of encumbrance charged to the Corporation will be further charged. In the absence of adequate security in the form of primary assets as required under the scheme, collateral security to the extent of 100% of the loan amount is insisted in respect of assisted units of the Corporation and in respect of non assisted units the collateral security requirement is 150% of the loan amount, and for AAA rated entrepreneurs it is 75%.

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ASSISTANCE FOR CONSTRUCTION OF ROADS

Purpose : For acquiring capital goods, equipment including road rollers, asphalting units, concrete mixtures, tippers, excavators, surveying and other supporting equipment towards development, maintenance and construction of roads. Any reputed civil contractors / firms / companies. Rate of Interest: Refer interest table at Annexure-I. Repayment period: Upto 6 years excluding moratorium period varying between 6 to 9 months. Security: 100% on all loans. Promoter contribution : 25% of project cost.

Eligible Borrowers Terms of assistance

: : :

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SINGLE WINDOW SCHEME

Objective : The objective of the scheme is to provide timely and adequate working capital assistance to micro, small and medium enterprises (MSME) along with term loan for fixed assets for entrepreneurs setting up new projects by KSFC. All new MSMEs to be engaged in the manufacture or production, processing or preservation of goods i.e., manufacturing enterprises where the total venture outlay (including working capital requirements) does not exceed Rs.100.00 lakhs. Minimum assistance: Rs.2.00 lakhs per unit. Maximum assistance: Rs.30.00 lakhs per unit. Minimum: 25% of the venture outlay in respect of loans upto Rs.10.00 lakhs (TL+WCTL). Maximum: 33% of the total venture outlay in respect of loans above Rs.10.00 lakhs (TL+WCTL). Terms of Assistance : Repayment period : Term Loan: 5 to 8 years (including moratorium). Working Capital TL: Not exceeding 5 years Security : Term Loan: As applicable under prevalent lending policy.
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Eligibility

Limit of assistance

Promoters : contribution

Working Capital TL : Charge on the current assets being financed. Minimum 100% collateral security as per the prevalent lending policy. Irrevocable & unconditional personal guarantees of the promoter directors/ corporate guarantee to be obtained wherever applicable.

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WORKING CAPITAL TERM LOAN FOR EXISTING UNITS

Objective : The objective of the scheme is to provide timely and adequate working capital assistance to the existing micro, small and medium enterprises (MSME) who have availed term loans earlier from the Corporation, having proven track record. Existing MSMEs engaged in the manufacture or production, processing or preservation of goods i.e., manufacturing enterprises, who have availed term loans earlier from the Corporation, having proven track record. The existing units which have availed the WCTL under the SWS earlier from the Corporation are also eligible for additional WCTL. Availing a term loan is not a pre-condition for granting eligible WCTL under the scheme. The unit should be in existence with a minimum period of operation of three years. The unit should be working profitably and networth should be positive. The units enjoying term loan / working capital loan from other commercial banks / financial institutions are not eligible under the scheme. Extent of Assistance : Minimum assistance : Rs.2.00 lakhs per unit. Maximum assistance: Rs.100.00 lakhs per unit.
36 34

Eligibility

Promoters : contribution

a) Minimum 25% of the working capital estimation in respect of loans upto Rs.10.00 lakhs (including existing loan outstanding, if any): b) Minimum 33% of the working capital estimation in respect of loans above Rs.10.00 lakhs (including existing loan outstanding, if any)

Terms of assistance

Rate of Interest: Refer interest rate table at Annexure-I. Repayment period: Not exceeding 5 years including moratorium of six months from the date of first disbursement of WCTL. Security: a) Charge on the current assets being financed. b) Minimum 100% collateral security as per the prevalent Lending Policy. c) Irrevocable and unconditional personal guarantees of the promoter directors/ corporate guarantee to be obtained wherever applicable. d) Further mortgage of primary assets of the unit, if it is already secured to the Corporation. In case, the earlier loan is closed and the charge on the primary assets is released, the charge on existing assets should be created fresh. The existing primary assets may be taken towards collateral security requirements.
37 34

LINE OF CREDIT FOR PURCHASE OF RAW MATERIALS

Objective : To provide timely and adequate working capital assistance in the form of WCTL to MSMEs for purchase of raw materials from KSSIDC. : Sole Proprietorship, Partnerships, Co-operative Societies, Private and Public Limited Companies etc., engaged in the manufacture / production, processing or preservation of goods. : Minimum LoC Amount Rs.5.00 lakhs and maximum Rs.100.00 lakhs. Upto 80% of the cost of raw materials proposed for purchase from KSSIDC, within the LoC Sanction Limit. Promoters' : 20% of the proposed cost of raw material. Contribution Terms of Assistance : Rate Of Interest: Will be same as applicable to the term loans for MSMEs. In case of default, a penal interest of 2.5% p.a. over and above the gross rate of interest is applicable on the default amount for the period of default. Repayment Period: The interest on the amount outstanding shall be paid on monthly basis. The principal shall be repaid on or before the end of 15th month from the date of first disbursement. Pre-payment / fore closure of the account will not attract payment of any premium.

Eligible Borrowers

Extent of finance

38 34

Collateral Security: First charge on the raw materials financed under the scheme shall be obtained. Apart from this, collateral security shall be obtained as detailed below : Collateral security of 30% of the loan for existing borrowers of the Corporation in standard category and who are working on profitable lines; Collateral security of 50% of the loan for existing units (other than existing borrowers) who are working on profitable lines; Collateral security of 100% of the loan in respect of other cases; Time limit for : Assistance The assistance sanctioned under the scheme is valid for a period of 12 months from the date of sanction. The borrower may draw the amount in installments based on his requirements within this period. any amount undrawn after a period of 12 months shall lapse automatically. The interest shall be changed on the loan outstanding for the period of usage of LoC. Following is the fee structure prevailing at present: a. LAFD b. Upfront Fee : 0.25% + Service Tax : 0.25% + Service Tax

LAFD/ : Processing Fee

39 34

ASSISTANCE FOR MARKETING RELATED ACTIVITIES

Objective : To provide financial assistance to small & medium scale units to undertake various activities necessary to increase their sales in domestic and foreign markets and to create physical marketing infrastructure. : Existing units (atleast for two years) with good track record (no default to any financial institutions / bank and asset classified as standard by bank) and has sound financial position and has positive net worth & earned profit in last two years). Existing or new units with good track record & sound financial position are eligible for assistance under the scheme for establishing permanent exhibition or trade centres. Extent of finance Terms of Assistance : Minimum Rs.5.00 lakhs and maximum Rs.50.00 lakhs. : Rate Of Interest: Refer interest rate table at Annexure I Repayment Period: Maximum of 8 years including moratorium period. Security: 100% of loan amount.

Eligible Borrowers

40 34

ACQUISITION OF EXISTING ASSETS & ENTERPRISES

Objective Eligible Borrowers : To extend financial assistance for taking over of existing assets / enterprises. : Individuals, partnership firms, private & public limited companies, co-operative societies etc., engaged in respective activities eligible for assistance from the Corporation and in existence for minimum period of 2 years with good track record. : Plant & Machinery : Plant & Machinery of : a reputed make with a minimum residual life of 10 years supported by Chartered Engineer certificate and as assessed by the technical officers of the Corporation . Land & Building: Industrial / Commercial properties located at prominent places within municipal limits with a minimum of 20 years residual life. The building should be of good quality and assistance will be subject to certification by the officers of the Corporation. Nature & extent of finance Financial assistance will be in the form of term loan not exceeding 70% of the estimated value of the assets being considered for finance. The minimum limit of finance under this scheme will be Rs. 10.00 lakhs and the maximum as per the prevailing norms applicable for term loan under the general scheme.
41 34

Eligible Criteria

Term of Assistance

: Interest : Refer interest rate table at Annexure-I. Repayment period : Not exceeding 5 years including moratorium period upto 12 months. Security : 100% of the loan other than amount earmarked for purchase of land and building.

Others

: No lien certificate from the sellers banker / financial institutions on the assets being purchased in case they are financed by banks / financial Institutions.

42 34

ASSISTANCE TO ENTERTAINMENT INDUSTRY

Objective : The objective of the scheme is to provide financial assistance for the construction / purchase of cinema halls, multiplexes, production of short TV serials, software for visual media publicity and feature films. : Assistance under the scheme is available for meeting the expenditure on Construction / purchase of buildings for multiplexes and cinema halls (the land cost will not be eligible for financing ) Purchase of capital equipments for multiplexes, cinema halls and software for visual media publicity and for production of TV Serials. Eligible Borrowers : Proprietary concerns, partnership firms, co-operative societies, public & private limited companies promoted by reputed persons with good technical / financial background and also with good networth. : The project cost will not exceed Rs. 20.00 crore. : Maximum 70% of the cost of the proposed fixed assets in the case of cinema halls and multiplexes. 50% of the total production and post production cost in the case of feature films, TV serials and software for visual media publicity.
43 34

Eligible Assets

Project Cost Extent of Finance

Repayment Period

: Upto 8 years including a moratorium period of 2 years in the case of Cinema Halls / Multiplexes. In the case of production of feature films, TV serials and software for visual media publicity, the loan has to be repaid either in a single installment in the 13th month or before the release of the feature film, TV serials, Software for visual media publicity whichever is earlier.

Security

: All the assets created in the form of land and building, furnitures and equipments under the scheme should be mortgaged / hypothecated. 100% collateral security in respect of furnitures, interior decoration and equipments. 200% in respect of film production including software for visual publicity. Power of attorney to collect subsidy from Government wherever eligible. Assignment of negative rights by way of a tripartite agreement between the film processing laboratory, the borrower and the Corporation. Assignment of intellectual property rights in all form of media (in respect of films, TV serials and software for visual media publicity)
44 34

Rate of interest Others

: Refer interest rate table at Annexure I. : Comprehensive Insurance Policy should be obtained from any insurance co-recognised by IRDA. All statutory requirements need to be complied.

45 34

ASSISTANCE TO TOURISM RELATED ACTIVITIES

Objective : To provide financial assistance for setting up of Amusement Parks, Convention Centres, Restaurants, Travel and Transport and Tourist Services Agencies. Sole proprietorships, partnerships, co-operative societies, private / public limited companies. Amusement Parks: Assistance will be extended for providing facilities such as toy trains, boat clubs, giant wheels, merry go-rounds, roller coasters, pony rides, mini zoos, small restaurant other assets like conveyors and rope-ways etc. Convention Centres: Convention and cultural centres used for conducting cultural programmes as well as conferences, seminars, exhibition etc. Audio visual aids like overhead projectors, film and slide projectors and sound systems will be considered for assistance. Hotels and Restaurants: Assistance is available for hotels and restaurants in tourist locations like pilgrimage centres, historical places, beaches, ports, wildlife sanctuaries and picnic spots. Hotels and Restaurants which are located on highways and small towns which cater to the needs of tourists will also be considered for assistance. The restaurant should have a minimum area of 50 Sq. Mtrs (500 Sq.ft.). Assistance is provided for fixed assets like land, building, furniture and equipments.
46 34

Eligible Borrowers Areas of Assistance

: :

Travel and Transport : Financial proposals of travel agencies with a fleet of cars and / or vans will be considered. Such travel facilities should be at or in the vicinity of leading hotels, airports, railway or bus stations, amusement parks, cultural and convention centres. Mini buses, full- fledged buses and taxis which satisfy the norms of tourism development & Government. The minimum number of vehicles cars / vans has to be three. The transport operator / agency should have a tie-up with a leading hotel / amusement park. Tourist Service Agencies: The agency should provide services like booking air, road and rail tickets, hiring taxis, booking hotels and tourist guides. These agencies should operate from major cities and must have a network of their own. In the case of tour operators, travel; agents and excursion agents, it is necessary that they obtain recognition from the Department of Tourism. Office buildings, including facilities such as telephone, telex, fax, photocopier, office equipment, personal computers etc., will also be considered for assistance. Mobile Canteen / Catering : Assistance for running mobile canteen/catering service for acquisition of vehicles, kitchen, equipment, catering, equipments, grocery, cutlery, linen etc. Terms Of Assistance : : Interest : Refer interest rate table at Annexure-I Repayment period : Upto 8 years including moratorium period of upto 24 months. Security : As per the lending policy of the Corporation.
47 34

ASSISTANCE TO HEALTH CARE SERVICES

A) Assistance to doctors / qualified medical practitioners : Purpose : For purchase of the premises / renovation of the existing premises, acquiring fixed assets like furniture, computers, office automation, ambulance, car / van, interiors and medicare related equipment required for a clinic. Doctors / medical practitioners with a bachelors degree in any branch of medicine from recognised institute / university for setting of clinic. People holding bachelor degree in radiology, bio-physics and bio-technology, with atleast 5 years experience and a certificate of practice from a relevant authority. Qualified veterinary doctors are also eligible for assistance. The promoters should be an income tax payee for last 2 years.

Eligible Borrowers

B) Assistance to Nursing Home / Hospitals: Purpose : For establishment of new and expansion / modernisation of existing nursing homes and hospital. Loan available for land, building and equipment for diagnostic, monitoring the therapeutic use, air conditioners, ambulance etc. Qualified medical practitioners or entrepreneurs employing qualified doctors to run the hospital / nursing homes are eligible for assistance. The project must be backed by
48 34

Eligible Borrowers

expert of a post graduate doctor on full time basis. C) Assistance for acquiring Electro Medical Equipment: Purpose : For procurement of new electro medical and related equipment with accessories like CT scanners, Endoscopy, Gastroscopy, X-ray etc., Loan is also available for establishing diagnosis laboratories. Hospitals, Nursing homes and medical practitioners with relevant qualification in general medicine, dentistry, radiology etc., and entrepreneurs employing qualified doctors are eligible for assistance for acquiring electro medical equipment for their professional use. Rate of Interest: Refer interest rate table at Annexure-I. Repayment period: Upto 8 years including moratorium period of 24 months. Security: As per lending policy of the Corporation.

Eligible Borrowers

Terms of assistance

: :

49 34

SCHEME FOR SMALL ROAD TRANSPORT OPERATORS

Purpose : To meet expenditure towards cost of chassis, body building, initial taxes and insurance for acquiring transport vehicles. Small road transport operators. Need based (Upto 20 vehicles per operator including existing vehicles). Second-hand vehicles are not eligible for assistance. Terms of assistance : : Rate of Interest: Refer interest rate table at Annexure-I. Repayment period: 36 to 50 months including moratorium period of 3 months in respect of all categories of vehicles. Security: 100% on all loans.

Eligible Borrowers Loan limit

: :

50 34

ACQUISITION OF ISO 9000 SERIES CERTIFICATION

Objective : The purpose of assistance will be towards meeting the expenses on consultancy, documentation, audit, certification fee, equipment etc. : Existing industrial concerns in the MSMEs sector. : MSMEs having good track record of past performance and sound financial position. The concerns should: a) have been in operation for a period of at least two years. b) have earned profit and / or declared dividend during the preceding two financial years ; and c) not be in default to institutions / banks in payment of their dues. Promoters : Minimum promoters contribution would be Contribution 25% of the project cost. Terms of Assistance : Rate Of Interest : Refer interest rate table at : Annexure-I. Repayment period : Upto 6 years excluding a moratorium period varying between 6 to 9 months in case of only machinery / equipments.

Eligible Borrowers Eligibility Criteria

51 34

SCHEME OF FINANCIAL ASSISTANCE TO FOOD PROCESSING INDUSTRIES

Objective : To encourage Food Processing Industries to take up technology upgradation / setting up of new unit / modernisation of existing units Units are eligible for a grant / financial assistance of 25% of the cost of plant & machinery and civil works (subject to reducing the cost of ineligible items prescribed by the Ministry) subject to maximum of Rs.50.00 lakhs. Sanctions under the scheme to women, SC /STs is given priority. The schemes shall cover specified sectors for activities leading to value addition and shelf life enhancement. Eligible Borrowers Note : This scheme is launched by Ministry of Food Processing Industries, Government of India w.e.f 1st April 2007. For details in this regard, Ministrys website www.mofpi.nic.in may be accessed. Presently there is a restriction on sanction of financial assistance to Grain Milling Sector. The same will be available as and when the restriction is removed. K.S.F.C is one of the financial institutions identified for implementing the scheme.
52 34

Eligibility Criteria

Individuals, Firms, Co-operatives, Companies and PSUs.

RENTAL DISCOUNTING SCHEME

Objective : To provide financial assistance on the strength of the rent earned by non-residential properties located within the city and municipal limits of Bangalore, Mangalore, Hubli, Dharwad, Gulbarga, Shimoga, Bhadravathi, Mysore and Belgaum and earning gross rent earned of not less than Rs.25,000/- per month from eligible tenants of the premises. The properties located outside the Bangalore City Corporation limits will also be considered on case to case basis depending on the location and infrastructural advantages enjoyed and rent earned. The tenants occupying the building should be reputed multi-national companies, nationalised and private sector banks, all India financial institutions, insurance companies, profit making public and private sector companies which are in existence for a minimum period of 5 years and earned profits etc. Eligible Borrowers Limit of Assistance : : Proprietary concerns, partnership firms, private / public limited companies, trusts and co-operative societies are eligible for assistance. Minimum of Rs. 10 lakhs and maximum of Rs. 500.00 lakhs in the case of companies and co-operative societies and Rs. 200.00 lakhs in all other cases.
53 34

Extent of : The extent of assistance will be determined Assistance & on the basis of rent received after deductions Rate of Interest towards TDS, Municipal Taxes, Insurance etc. The exact amount of assistance will be worked out on the basis of net present value and future rents by discounting at a rate of 15% p.a. The rate may change from time to time and it will be binding on the beneficiary of the assistance. The repayment shall be monthly installments as computed above. In case of default, penalty at 2% p.a. over and above the contracted rate shall be charged on the defaulted amount for the period of default. The calculations of this interest shall be on monthly compounding basis. Security : The assignment of the rights of the lessor to receive the rents from the tenants and execution of necessary documents. The personal guarantees of the promoters availing the facility as per the terms of sanction. The collateral security for the assistance shall be by way of first mortgage of the subject property considered under the scheme and hypothecation of movable assets like DG set, lift etc., attached to the premises.
54 34

Others

A tripartite agreement will have to be entered among the owner of the premises (beneficiary), tenant and KSFC The property will have to be insured by the beneficiary of assistance. Processing Fee : The application under the scheme shall be accepted on payment of processing fee as per the norms of the Corporation besides management fee of 0.5% of the sanctioned assistance payable at the time of documentation. Further documentation charges shall also be paid as per the norms of the Corporation.

55 34

SCHEME FOR FINANCING ENERGY SAVING PROJECTS

Objective : To promote energy saving MSMEs by providing financial assistance thereby contributing to environmental improvement and economic development in the State. Sole proprietary concerns, partnerships, cooperative societies, private and public limited companies etc. New and existing projects in Micro, Small and Medium Enterprises (MSME) Sector, as defined by the MSMED Act, 2006 will be eligible. Existing units should have a satisfactory track record of past performance and sound financial position & should not be in default to institutions/banks. The loans sanctioned by the Corporation on or after 01.08.2008 are eligible for finance. Loans availed for installation of energy saving equipment/under Credit Linked Subsidy Scheme (CLCSS) are also eligible to be covered under the scheme. Promoters : Contribution Extent of Finance : Minimum 20% of the project cost. Upto 75% of the fixed assets in the cost of project and maximum assistance is as per the prevailing lending policy.

Eligible Borrowers Eligibility Criteria

56 34

Term of Assistance

Rate of Interest : The rate of interest applicable to the term loans for MSMEs shall be charged for the loans under the scheme with a special rebate of 0.5% p.a. for prompt payment. Repayment period : Upto 6 years including a moratorium period of 1 year. Security : First charge on the assets financed under the scheme shall be obtained. Apart from this, collateral security shall be as follows : (i) Collateral security of 30% of the loan for existing borrowers of the Corporation in standard category and who are working on profitable lines. (ii) Collateral security of 50% of the loan for existing units (Other than existing borrowers) who are working on profitable lines. (iii) Collateral security of 100% of the loan in respect of other cases.

57 34

GENERAL SCHEME
Objective : To extend financial assistance for new MSMEs service sectors and for expansion, modernisation, diversification etc., by the existing units. Projects which are eligible to be financed as per the SFCs' Act, the details of which are given under the first part of the brochure are covered under General Scheme of the Corporation. The project cost shall not exceed Rs. 12.00 crore for SMEs. The project cost can go up to Rs. 20.00 crore in respect of service and infrastructure projects. Varying between 12.5% and 25% depending upon the location of the project, category etc. Not exceeding 2:1 in respect of loans above Rs.10.00 lakhs and upto 3:1 for loans below Rs. 10.00 lakhs. Under the General Scheme, the assistance will be in the form of term loan calculated on the basis of maximum 75% of the proposed fixed assets to be acquired i.e., the land, building, plant & machineries etc. However, the term loan will be subject to a maximum of Rs. 200.00 lakhs in the case of proprietary and partnership concerns, and Rs. 500.00 lakhs in the case of co-operative societies, private and public limited companies. Under special circumstances these limits could go upto Rs.800.00 lakhs and Rs.2000.00 lakhs
58 34

Eligibility Criteria

Project Cost :

Promoters : Contribution Debt Equity : Ratio Nature and Amount of Assistance :

respectively with prior consent of SIDBI. However the paid up capital and free reserves in case of companies shall not exceed Rs.20.00 crore. Term of Assistance : Rate of Interest: Refer rate of interest table at Annexure I Repayment period : Maximum of 8 years with a moratorium upto 2 years normally. In extremely deserving cases, the maximum period can go upto 10 years. Security : Apart from mortgage/ hypothecation of proposed fixed assets, suitable collateral security is also insisted as per the lending policy of the Corporation.

59 34

SCHEME FOR MICRO FINANCE ACTIVITY

Objective : Micro Credit or Micro finance refers to extending small loans to very poor families for self employment projects that generate income, allowing them to care for themselves and their families. The distinctive feature of this concept is empowerment of women financially. The Women will be organised into Self Help Groups (SHGs) and Joint Liability Group (JLGs) and will be involved in productive activities through micro finance.

Purpose

: To create a national network of strong, viable and sustainable Micro Finance Institutions (MFIs) from the informal and formal financial sector to provide micro finance services to the poor, especially women. :
The Constitution of the MFI should be Registered Non-Banking Financial Company (NBFC). It should be in existence for at least five years and / or should have a demonstrated track record of running a successful micro-credit programme at least for the last three years. The MFI should have been rated by mainstream rating agencies such as CRISIL/CARE/ICRA/ M-CRIL etc. with acceptable investment grade rating. The rating should be valid and should not be less than 6 months old. It should have been extended term loan by SIDBI. The MFI should have bee making cash profits for at least last two years. The MFI should have only women members as its clientele. The MFI should have achieved minimum outreach of 3000 members. 60 34

Eligibility

 The MFI should have maintained a satisfactory and transparent accounting, MIS and internal audit system. The MFI should have its accounts audited by a Chartered Accountant firm. It should have a separate system of accounts and monitoring for its micro finance operations. The MFI should be showing consistent growth in its loan portfolio / members and networth strength. It should have plans to broad-base its resource base further. The term loan extended by the Corporation should be utilised within Karnataka for non-farm activities.

Terms of assistance

: :

Rate of Interest: 13.5% (net) payable monthly and a liquidation damage of 2% p.a. to be charged in case of default in payment of principal and/or interest. Repayment period: Upto 4 years from the date of disbursement including moratorium period of 6 months. Security : (1) Hypothecation of the book debts. (ii) Fixed Deposit pledge agreement offering 10% of the loan amount in the form of Fixed Deposit with the Corporation. Personal guarantee of the main individual promoters.

Limit of assistance

: :

The minimum assistance will be Rs. 25.00 lakhs and maximum exposure should not exceed Rs. 500.00 lakhs at a time. The scheme will be operated at Head Office.

Operation of : the scheme

61 34

HIRE PURCHASE & FINANCIAL SERVICES

Fund Based Activities : Equipment Lease Finance Hire Purchase Scheme Rental Discounting Scheme Bill Discounting Scheme Equity Participation Factoring Facility Subscription to Non-Convertible Debentures

Non Fund Based Activities

Deferred Payment Guarantee Under Writing of Public Issued Insurance Activity Financial Guarantee

Financial Services

: :

Issue Management Pre-Issue Project Appraisal Foreign Letter of Credit Project Report Preparation

The operation of the schemes such as Bill Discounting, Equity Participation, Financial Guarantee, have been temporarily suspended. The fee based and financial services activities such as Underwriting of Public Issue, Issue Management, Pre-Issue Project Appraisal and Project Report Preparation are undertaken by the HP & FS department at head office.

62 34

HIRE PURCHASE
Objective : KSFC introduced Hire Purchase scheme which provides a fast easy alternative to ready cash. Under this scheme finance is available for procuring vehicles, machinery and equipments. Industrial concerns should : Have been in commercial production for two years and earned net profits. Have no accumulated losses. Have record of regular payment to financial institutions / banks. Professionals should : Be in practise and be income tax payees. Have a net worth equivalent to the hire purchase value. Have a record of regular repayment to banks / financial institutions, if any. Commercial transport vehicle operators should : Have been in the transport business for atleast two years. Have positive networth Have a record of regular repayment to banks / financial institutions. Minimum Assistance : For industrial Concerns : Rs. 5.00 lakhs for plant and machinery / equipments.
63 34

Eligibility

 Rs. 1.00 lakh for vehicles. For Commercial transport operators : Rs. 2.00 lakhs. Amount of : Assistance & Promoters Contribution Repayment : Period & Moratorium : Interest Rate : & Fees Upto 90% to 100% of the asset amount. From 10% to 0% of the hire purchase amount. In case of 100% finance, the Hirer is required to pay 3 months advance EMIs. The repayment period varies between 3 to 5 years with a moratorium of one to three months period from the date of 1st disbursement. Interest rates will be charged on IRR basis depending on the in-house credit rating. AAA rated AA rated Normal : : : 13.50% 14.00% 15.00%

The following fees are charged : HP processing fee of 0.5% HP Management fee of 0.5% Service Tax as applicable from time to time. Security : Hypothecation of the assets under Hire Purchase assistance and personal guarantee of the promoters. Minimum collateral security of 100% of the assistance will be insisted. However, in deserving good cases, Managing Director can relax the requirements of collateral security. The scheme is in operation in head office only.
64 34

NON-CONVERTIBLE DEBENTURES
Objective : This scheme was introduced to subscribe the private placement of the debentures issued by the corporate entities. The proceeds of this debenture issue should be utilised by the companies to meet their long term working capital and capital expenditure. Only the corporate entities who satisfy the following norms : The Company should fall under the relevant provisions of SFCs' Act with regard to eligibility for such assistance. The company should have been in production for at least 3 years and earned profits. The company should have positive networth. The company should not be in default to financial institutions or banks. Funds raised through issue of debentures should be utilised to meet long term working capital margin and up to 50% on capital expenditure. Limit of Assistance : The minimum limit of assistance will be Rs. 30.00 lakhs and the maximum limit will be the amounts permissible from time to time under SFCs' Act. The extent of assistance will be determined on the working capital gap and the capital expenditure requirement. The working capital gap will be calculated by taking the total
65 34

Eligibility Criteria

Extent of : Assistance and the Interest Rate

requirements of working capital and the bank finance. The coupon rate on NCD facility will be decided based on the in-house credit rating. The present coupon rates are as under : AAA rated company AA rated company Normal Category Security : : : : 13.50% 14.00% 15.00%

A rebate of 1% is allowed for prompt payment. Collateral security to the extent of 125% of the NCD facility sought. Second charge on the current assets of the company. Corporate Guarantee of the company and personal guarantee of the directors. Post dated cheques for interest and subscribed portion of the NCD. Duration of Debentures Others : : The maximum redemption period of debentures will not exceed five years. The company should pay 0.50% Management Fee and 0.50% Brokerage and under writing commission. The company should pay documentation fee as per the norms of the Corporation. The company should appoint debenture trustee as required and trustee fee is to be paid as per prevailing rates.

66 34

FACTORING
Criteria : SSI / MSI units who have a minimum three years track record with consistent profitability and positive net worth. SSI / MSI unit should sell its finished products under deferred payment. The unit should not be in default to institutions. Bill to be discounted must relate to domestic trade debts arising in the usual course of suppliers business. Based on credit sale of the company for last three years limit will be fixed for utilisation for each individual case to be reviewed every year. The company should provide disclaimer letter from the bank / s who have provided working capital indicating that the supply bills are not financed by the bank and they have no charge on the proceeds of the bill. All advance payments are paid to suppliers account to the bank providing working capital. The customers of the company should be reputed or the company should have dealings with these customers for a minimum period of two years regularly. The factoring facility will be provided only from head office. Legal documents must be executed by the company to the satisfaction of the Corporation.
67 34

 The supplier must submit a monthly statement indicating sale and collections. Extent of Assistance : : 80% of the invoice value including insurance, freight and taxes as up front payment subject to the maximum exposure of Rs. 150.00 lakhs per unit including all other fund based limits provided to the unit by the Corporation. The maximum credit period of the bills eligible for discounting would be 180 days. The current interest rate will be 13.50% p.a. inclusive of interest tax (interest will be in tune with market conditions) The Corporation will charge penal interest as under : For delays between 00-30 days : 2% p.a. For delays between 30-60 days : 3% p.a. For delays between 60-90 days : 4% p.a. Other Charges : Factoring charge of 2% will be charged on the limits (to be paid up front) at the time of sanction. Rs. 2000/- for factoring limit upto Rs. 25 lakhs and Rs.5,000/- above Rs. 25 lakhs. Non refundable fee of % age on the limit requested for sanction. At 0.25% of the factoring limit renewed. 2% of additional factoring limit (paid up front before availing additional limit).
68 34

Deferred : Credit Period Interest Rates :

Initial : processing fee Processing charges Fee for renewal : :

Factoring fee :

If the proposal is accepted the initial processing fee so collected will be adjusted towards the regular processing fee. If the proposal is rejected, the initial processing fee will be forfeited. Security : Personal guarantee of the promoters and any one or a mix of the following securities will be obtained. Purchasers bank guarantee. Co-acceptance of bills by Banks / Financial Institutions. Corporate guarantee / Counter guarantee. Collateral security of immovable properties and / or pledge of shares by the seller or the purchaser. Charge on assets of the purchaser / seller company covering under the scheme. Mechanism : Bills of exchange / promissory notes drawn by the supplier should be accepted by the purchaser for payment on specified dated. Bills of exchange / promissory notes accepted by the purchaser shall be submitted to the Corporation for discounting along with invoice copy, LR, RR duly acknowledged by the customer for acceptance of goods. On receipt of bills of exchange / promissory notes the Corporation will discount bills and pay to the suppliers bank after collecting the discounting charge and collection of interest upfront. If the purchaser fails to pay on the due dates, the supplier shall make the payment.
69 34

FOREIGN LETTER OF CREDIT

Objective : KSFC has been operating the scheme of opening Foreign Letter of Credit for importing the capital goods through commercial bank exclusively for our borrowers since 1995. The scheme is operated in the HP & FS department of head office and the salient features are as below : Details to be submitted by the borrower : Application form. Undertaking on Rs. 50 Non Judicial Stamp Paper. Specific Import License (Goods not covered under OGL). Copy of Import & Export Code. Latest Proforma Invoice. Terms of Payment : Upfront 25% margin money at the time of establishing the LC and the remaining payment will be arranged by KSFC by issuing Letter of Comfort. Rs.2,000/- fixed charges Plus 0.5% of the sight FLC up to 90 days. Plus 0.075% per month beyond 90 days.

Opening Charges

70 34

OTHER FINANCIAL SERVICES

GENERAL INSURANCE KSFC has entered into a strategic alliance with IFFCO-TOKIO General Insurance Company to market the Non Life Insurance Products. This would enable the clients of KSFC to have credit and the insurance under one roof. The premium tariffs applicable are same as the other insurance companies and at no extra service charges. An exclusive Insurance Cell with well trained staff is in operation at Head Office. The details of the general perils covered are: Fire Earth quake Burglary Machine breakdown Marine Cash safe / transit Fidelity guarantee Household Insurance Personal Accident Cover Medical Insurance Vehicle Insurance Bankers Indemnity Trade and Office Electronic Equipment. Travel Insurance.
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LIFE INSURANCE KSFC has entered into strategic alliance with Life Insurance Corporation Of India, the largest and oldest Life Insurance Corporation of the country to market its Life Insurance Products. The Corporation will help the customers in identifying the tailor made policies suitable for their future financial needs and extend professional service from procurement of policies to settlement of claims/payment on maturity to the customers. The clients of KSFC can avail, as welfare measures to cover critical illness risks / death risks of their employees and also avail Group Gratuity schemes to cover their statutory liabilities and obtain tax exemptions on premiums paid. KSFC will arrange presentation of individual and group products to our clients at their premises. The services are available at no extra cost at Head Office and at all the branches of the Corporation situated in the district head quarters. The Corporation believes that Life insurance is not only an investment decision but also a risk protection. The key persons of the ventures who have availed the loans from KSFC can avail special policies to protect against the risk of burden of debt in case of happening of any unfortunate event to the key person. KSFC do have well trained staff for servicing the clients of life insurance at Head Office as well as Branch Office. UTI MUTUAL FUND PRODUCTS KSFC has entered into MOU with UTI MF for distributing UTI MF products. UTI Mutual Fund is one of the leading Mutual Fund in the country. It has got more than Rs.38,358.00 crore worth of assets under its management. It has got more than 40 schemes of offer, suitable for short term long term
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investments in the category of debt funds, balance funds and equity linked schemes. The individuals, co-operative societies, private limited companies, charitable trusts and PF trusts, co-operative banks can invest their investible surplus in the UTI Mutual Fund Products. The Corporation has got professionally trained persons to guide in the investment process of UTI Mutual Fund at Head Office and Branch Offices. The service carries no extra charges. MONITORING AGENCY : As per SEBI guidelines any company which is issuing more than Rs. 500 crore shares for subscription by the public, has to appoint a monitoring agency. KSFC is a notified agency for this. The work involves inspection of the books of accounts and physical assets of the company every six months, until the completion of the project to verify and certify that the proceeds of the issue are utilised towards the objects of the issue declared in the prospectus. The companies planning to issue IPOs can utilise the services of Corporation for Monitoring Agency assignment as per SEBI guidelines. INFRASTRUCTURE DEVELOPMENT : Infrastructure is an integral part of the services sector and plays a crucial role in the industrial development. With rapid growth of the economy in recent years, the importance and urgency of infrastructure development has increased. Recognising this, the Corporation as part of diversification, has taken up infrastructure development projects with public / private participation.
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The Corporation has been initially focusing on identifying valuable lands in the prime localities in and around Bangalore City owned by various government departments / governmental agencies / registered societies / trusts etc., exploring suitable infrastructure development on joint venture basis. In respect of such joint venture projects, the Corporation takes care of all the financial tie-ups for development of these properties. The expected income out of different revenue models will be shared with the owners of the properties in appropriate ratio on mutually agreeable terms and Corporation understanding the after studying economics / viability. The proposed joint venture projects will be of world class and state of art technology. It could be IT park, shopping mall, commercial complex, SEZ, etc., depending upon the location of the property and commercial potentiality of the place. This new activity will ensure sustained cash flow for the concerned owner of the property as well for KSFC by way of rentals and other earnings which will be mutually beneficial to both the institutions. A separate infrastructure development department is created for this purpose and is fully functional.

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PROCEDURE
PROCEDURE FOR AVAILING FINANCIAL ASSISTANCE A special cell viz., Entrepreneurial Guidance (EG) Section headed by an Asst. Gen. Manager operates at the Head Office of the Corporation to guide the entrepreneurs in respect of various schemes operated by the Corporation, loan facility available, terms of assistance etc., A brief project profile / report will have to be given by the promoters soon after they approach the concerned Branch Manager / AGM(EG) at HO with the loan proposal. The project report will also be prepared by the Branch Manager / AGM(EG) in consultation with customer. The project report so prepared will be countersigned by the concerned entrepreneurs for having given consent for the same. Towards this, a nominal fee (non-refundable) will be charged as detailed below: Particulars For loans upto Rs. 25.00 lakhs For loans between Rs.25.00 lakhs and Rs.50.00 lakhs For loans above Rs.50.00 lakhs Fee per project profile Rs.1,000/Rs.2,000/Rs.3,000/-

(Note: In case the promoter submits comprehensive project on his own, preparation of project profile by the EG Dept may be dispensed with). In respect of project proposals where the project cost is less than Rs.500.00 lakhs, the concerned Branch Manager in respect of Branch Office / AGM(EG) in respect of HO shall accept the proposals without placing it before PCC. Only such proposals where the project cost is Rs.500.00 lakhs and above will be placed before the Project Clearance Committee Meeting at Head Office.
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After receipt of the project profile (vide annexure -II) along with the bio-data and net worth details (vide Annexure-III), the main promoters are called for discussion with the committee and after discussions, if the project is found support worthy the application is issued. A set of three applications is issued. The duly filled applications have to be submitted in duplicate along with various enclosures as per checklist given in the application form. One application may be retained by the entrepreneur for reference. The other two application form will have to be submitted along with the applicable processing fee. The following are the fee structure prevailing at present. Application processing fee Upfront fee: Small Scale Entreprises and others Medium Scale Enterprises % of the loan amount 1% of the loan amount % of the loan amount

The upfront fee will have to be paid at the time of legal documentation or before availing the first disbursement of the loan amount. The application processing fee and upfront fee are non refundable. However, in case the loan application is rejected, refund upto a maximum of 75% of processing fees paid is allowed on a case to case basis. Legal Fee : In addition to the above, documentation fee for legal scrutiny of the title deeds, execution of hypothecation and mortgage deed etc., at 0.1% of loan amount is being charged. The EG department after scrutinising the application and the enclosures submitted, draws the receipt for the processing fee
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paid and forwards the application to the Credit Department through General Manager (Credits). The Credit Department appraises the project and disburse funds after the sanction of loan and will monitor the implementation of the project till the project is completed and final disbursement made. Entrepreneurs are advised to contact the Deputy General Manager (Credits) for processing of the loan applications. The Credit Department is also provided with legal officers for legal scrutiny of the documents and documentation thereafter i.e., after the loan is sanctioned and terms and conditions of sanction are accepted by the promoters. The above is the procedure in brief for availing the financial assistance from the Corporation. For further details the promoters are advised to personally contact the following officers Assistant General Manager (EG) Deputy General Manager (Credits) Promoters are also advised to meet the General Manager (Credits), if they have any problem or for seeking any clarification. In the Branch Offices, promoters are advised to meet the Branch Managers to discuss their projects and to finalise the proposals.

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FREQUENTLY ASKED QUESTIONS (FAQs)

Question : Answer : After acceptance of my application do I take it that the loan will be sanctioned ? The application is accepted based on the project submitted, background of the promoters, experience etc., and agrees in principle to sanction the loan. This does not mean that is a commitment on the part of the Corporation to sanction the loan as the project will have to be appraised in detail and viability established and the norms of finance for sanction of loan adhered to. When the project study has been found to be viable and details given in the form of a project feasibility report, why should the Corporation appraise the project again ? No doubt the project feasibility would have been studied by the promoters and found that the project is worthy of implementation. The institution appraises the project to ensure the viability from the institutions point of view and also to find out whether it fits into the norms of finance of the Corporation. Another important aspect is that the institution having financed a number of projects in the past, is in a better position to identify the weak links in the project and accordingly advise the promoters to attend to these weak links so that the project viability will be strengthened. The promoter may not be in a position to appreciate these points especially if he is a first generation entrepreneur.
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Question :

Answer

Another important point for the institution to appraise the project is to find out under what terms and conditions the loan will have to be granted and for fixing the repayment period, security to be offered by the promoter etc. Question : Answer : After I submit the application how long will it take for me to get the loan sanctioned ? It all depends on how fast the information asked for is submitted. In this regard entrepreneurs are advised to give complete information asked for along with the application as detailed thereof. During appraisal further information on the project, promoter etc., may be required. The promoters are advised to give information quickly so that the processing can be quickened and loan sanctioned early. The process of appraisal totally depends on how fast the information is given by you. How quickly can I draw funds after the loan is sanctioned and the terms and conditions are accepted by me ? The disbursal of funds from the Corporation can take place soon after you execute the legal documents and enter into a loan agreement with the Corporation. The legal documents to be executed are, mortgage / hypothecation deeds for securing land, building and plant & machinery. In addition, personal guarantee deeds have to be executed by the promoters.
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Question :

Answer

The above are in respect of primary security. In respect of collateral security separate mortgage / hypothecation deeds have to be executed. For further details on documentation you are advised to contact respective legal officers in the department. After execution of the legal documents, disbursement of funds can take place immediately thereafter, provided you fulfill the terms and conditions of sanction including first investment clause which are to be complied before drawing the first installment of the loan as per the terms of sanction. Question : Answer : Can I draw the entire loan amount in one installment ? No. The loans are disbursed in installments depending on the progress achieved, security created, fulfillment of terms and conditions etc., However, if you have completed the project in all the respects before seeking disbursement, the loan can be drawn in one installment after the Corporation satisfies itself that all the terms and conditions have been fulfilled. For further details regarding drawal of loan towards building, plant and machinery etc., the entrepreneurs are advised to contact the respective appraisal and disbursement teams or Deputy General Manager of the Credit department or Branch Managers.
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In this connection, the promoters are advised to keep in close contact with the appraisal and disbursement teams as once the project is sanctioned loan, the loanee and the institution become the partners in progress. Entrepreneurs should not hesitate to discuss any problems they have in the implementation of the project and seek the guidance and support of the Corporation. Entrepreneurs are assured that any genuine and reasonable request will be considered on merits.

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ANNEXURE-I INTEREST RATE STRUCTURE

Sl. Category of borrowers / loans No. Interest rates (w.e.f. 1.6.2009) (in %age) Gross Rebate Net
14.50 1.50 13.00

Term Loans above Rs.50,000/- and up to Rs.2,00,000/- and other than loans indicated in Sl.No.3,4 & 5 a. b. c. All Term Loans (including WCTL) over Rs.2,00,000/- to MSMEs, Acquition of ISO accreditation, SRTOs and Acquisition of private vehicles.

d. Tourism related activities; Amusement parks, Convention Centres, Restaurants, Travel & Transport, Tourist Service Agency, Hotels & Restaurants, Mobile Canteen/Catering, Resorts, Service Apartments e. Health Care Services: Assistance to Doctors/Qualified Medical Practitioners, Nursing Homes/ Hospitals, Electro Medical Equipment. Assistance to qualified Professional: Management Professionals, Medical Professionals, Accounting Professionals, Architects & Engineers, Veterinary Clinics.
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15.00

1.50

13.50

f.

g. i. j. 3 a. b.

DG Sets, Mobile Generators. Office Automation. Training Institutions Construction / Buying Commercial Complexes, Construction activities like Residential Apartments, Villas, Group Housing, Layout Formation / Property Development Shopping Complexes. Ready built office space, Construction/Buying Ready built show rooms and Sales outlets, Development Maintenance and Construction Roads / Infrastructure Projects Professional Education Institutes. Corporate loans, AMARA scheme, Bridge loans, Finance to existing assets Entertainment industry (including 16.00 Cinema Theatre / Multiplex, Production of feature films, TV Serials, Dubbing / Recording, Software for visual media publicity). Rental Discounting scheme. 14.50 14.50 1.00 15.00 16.50 1.00 15.50

h. Godown / Warehouse

c. e.

d. Industrial Estates, IT Software Parks

f. 4 a. b.

c. 5

Privileged Entrepreneurs Scheme

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Notes to the above interest rate structure : I. REBATE AND CONCESSIONS : A. General In case of RSR loans, additional concession of 0.50% will be provided in the interest rate. Additional Rebate of 0.50% can be extended for a) Credit Rated Clients with a rating of AAA, which is equivalent to Lowest Risk i.e. LL as per Credit Risk Analysis Models. b) Fresh sanctions to ISO certified units, made on or after 01-08-2008. Rebate for prompt payment shall be provided in two slabs of 1% and 1.5% as indicated in the interest table. The rebate will be allowed on current interest for the prompt payment of both principal and interest rate payment and on or before due dates for the respective quarter. In case the borrower commits default in paying the Principal / Interest instalment of any one quarter / month, then the said borrower shall not be eligible for rebate for two successive quarters / months, including the one in which the prompt payment does not take place. CONCESSIONS FOR SC/ST

B. REBATE AND ENTREPRENEURS

The loans to Scheduled Caste / Tribe entrepreneurs will be sanctioned at the above applicable rates. However, effective rate to these entrepreneurs will be 4% p.a. After the difference between
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the lending rate and effective rate of 4% p.a will be met by the GOK as per the KSFC circular No. 786 dated : 30-3-2007. C. Maximum Cap on Rebate : The over all rebate allowed to any unit under different categories shall not exceed 2.00%. II. PENAL INTEREST : Penal interest of 2.5% p.a. over and above applicable interest will be charged in case of default on the defaulted amount for defaulted period to all categories of borrowers. III. LOAN AMOUNT STANDING TO DETERMINE INTEREST RATE : While applying the interest rate, the total loan outstanding (i.e., existing and proposed loan) will be the criteria for deciding the rate of interest. IV. DEFERRED PAYMENT IN CASE OF SALE U/S.29 OF SFCs ACT: The rate of interest for deferred payment liability in case of sale of assets will be the highest current rate of interest, even if the aggregate loan is less than Rs. 2.00 lakhs. V. TRANSFER OF LOAN LIABILITY : The original contract rate of interest will continue to apply in case of transfer of loan liability

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ANNEXURE-II PROJECT PROFILE

1 2

Name of the applicant/unit Address a) b) Office & Phone No. Unit & Phone No.

: : : : : : : : : : : : : : : Net-worth Experience

3 4 5 6

Constitution Size of the Industry Proposed Activity a) Land / Plot area b) Building- Existing c) Proposed

7 8 9 10

Power requirement - Existing Addl / proposed Employment Potential - Existing Addl / proposed Present policy of KSFC/ SIDBI & Government Name and address of the Banker Age in Years Qualification

11(a) Details of Promoter/s: Sl Name of the No promoter

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11(b) Background of the Promoter/s: 11 (c). Net-worth statement of the promoter/s:1) Sri/Smt. (Rs.in lakhs) Sl No Description Appx. Value

TOTAL(A): LIABILITIES(B): TOTAL NETWORTH:(A-B) 11(d) Background of the Project: 12. The details of the loan availed and present position of the loan account is as below:-

Sl Particulars No
1 2 3 4 5 6 7 Date of Sanction Loan Amount Sanctioned Loan Amount Disbursed Loan Balance Principal Dues Interest Dues Other Debits

Name of the unit & Account No.

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13. Financial performance of the unit/ firm/ company & associate concerns: ( Rs. in lakhs)

M/s.
Sl. Particulars No. 1 2 3 4 5 6 7 Sales & other income Depreciation Net profit Cash Generated Share Capital Reserve & Surplus NetWorth

M/s.

2007 2008 2009 2007 2008 2009

14. Location / Land Building 15. Details of Plant & Machinery: (Rs. in lakhs)

Sl. Particulars No.

Dealer / Manufacturer

Cost

16. Details of Raw materials (like quantity, source and availability): 17. Working Capital arrangements / facility from bank etc.,: 18. Essential Services: a. Market:
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19. Cost of the project / Expansion: (Rs. in lakhs) Sl. Particulars No. 1 2 3 4 5 6 7 8 9 Land & its Development Building & Civil Works Plant & Machinery Contingencies Misc. fixed assets Pre-operative expenses Interest during implementation Deposits Working Capital margin TOTAL: 20. Means of finance: A. Equity Particulars 1 2 3 4 Promoters capital Unsecured Loan with int. Subsidy/Soft Loan/Soft Seed Capital Others TOTAL :
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Original as submitted

Revised

Original as submitted

Revised

B. Debt Particulars 1 2 3 4 K.S.F.C. Term Loan/Corporate Loan Working Capital Loan Unsecured Loan with int. Others TOTAL : TOTAL (A)+(B): Original as submitted Revised

C D

Debt equity ratio Promoter/s Contribution

21. Security

Sl Particulars No

As submitted by the promoter

Revised

Term loan % Amt.

Term loan % Amt.

1 2

Land Building & Civil works - Existing (WDV) - Proposed Plant & Machinery - Existing (WDV) - Proposed Collateral Security TOTAL:
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22. Margin Retained: A B Margin Overall security margin

23. COLLATERAL SECURITY: Details of collateral security required as per lending policy norms and available / offered are as under:-

SL Particulars No

Value Eligible Collateral Collateral Remarks of Term Stipulated available / fixed Loan % Amt. offered assets
Present land cost / SR rate at Rs............

Land

2 3 4

Building Plant & Machinery Collateral Securities Property 1. 2. -FD/NSC/ LIC (SV) TOTAL:
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24. Brief details of Profitability Estimates:

Sl. No
a) b) c) d) e) f) g) h) i)

Particulars
Utilisation % Sales/ Turnover Expenditure (Excl. Dep. & Int.) Depreciation Interest on Term Loan Profit before tax Income Tax Profit after tax DSCR

II

III

25. Lending Policy: Lending Priority Collateral Security requirement as per Lending Policy

26. The promoter/s have submitted the following details:-

Documents to be submitted
Project Report Bio-data Networth
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Compliance

Audited Balance Sheets & Profit & Loss account of the unit and associate concern Land details like sale deed/ allotment letter/ Lease deed Building plan & estimate Details of plant & machinery Quotations of plant & machinery Collateral security details

27. Remarks :

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ANNEXURE-III BIO-DATA AND NETWORTH

Sl. Particulars No.
1 2 3 4 5 6 7 Name Fathers / Husbands Name Age Units Address & Phone No. a) Present b) Permanent Residential Address /Phone/ Mobile a) Present b) Permanent 8 9 Qualification Experience (Enclose Certificates wherever available) No of Years Employer Designation Last Salary Drawn

Details

10 11

Present Profession Are you a valid passport holder ? If yes [copy to be enclosed] a) Issuing office & address b) Passport Number c) Date of issue
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12

Are you an Income Tax Assessee ? If yes [Copy of I.T. Clearance to be enclosed] a) Permanent Account No. b) Income declared last year Address of your Bank, A/c. No. & Date of opening

13

Are you a member of any club ? If yes a) Name & Address b) Membership Fee Paid

A) IMMOVABLE PROPERTIES: (Properties owned or jointly owned with family members with details of eligible percentage of share)

Sl Description (Mention specific No. details such as Sy.No,/Site No./Door No./Street/Town etc., and also Dimension)

Value [Rs. in lakhs]

How acquired [Self/Ancestral / Gifted]

SUB TOTAL (A)

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B) MOVABLE ASSETS : a) Cash on Hand b) Cash at Bank c) Investments

d) Deposits e) Shares / Debentures/Others f) Jewellery

g) Any movable assets, vehicles etc., SUB TOTAL (B) GRAND TOTAL OF (A) & (B) OR TOTAL VALUE OF ASSETS

C) LIABILITIES :

Sl No.

Description

Value [Rs. in lakhs]

TOTAL LIABILITIES: TOTAL NETWORTH (Assets ~ Liabilities): PLACE: DATE : SIGNATURE

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Note: Enclose copies of Property Documents, Pass Books, Shares, Debentures etc., in proof of your net worth. For further information please contact Assistant General Manager (EG) K.S.F.C. Head Office "KSFC BHAVANA" No.1/1, Thimmaiah Road BANGALORE 560 052. Ph.No. : 22258127 / 22263322 Fax : 080 22250126 E-mail : info@ksfc.in Website : www.ksfc.in or Any of our Branch Offices

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ZONAL OFFICES

Bangalore Rural Zone 5 Dharwad Zone # 48, 1st Floor, Church Street Poona Bangalore Road Bangalore 560 001 Rayapur, Phone : 25587355 Dharwad 580 009 Fax : 080-25586718 Phone : 2322700 , 2322792 Fax : 0836-2322685 Mysore Zone #2716, 1st Floor, Sourabha Chambers Sri Harsha Road, Lashkar Mohalla, Mysore 570 001 Phone : 2332786 Fax : 0821-2331545 6 Belgaum Zone Hotel Sanman Compound College Road Belgaum 590 001 Phone : 2432387 & 2426369 Fax : 0831-2432723

Mangalore Zone 7 Davanagere Zone, # 330, 4th Floor # 1179/1, Somayaji House S Nijalingappa Layout Bunts Hostel Road, PB # 750 Near Ring Road Mangalore 575 003 Davangere 577 004 Phone : 2443573 Phone : 08192-225176, Fax : 0824-2443939 225660 Gulbarga Zone # 31 & 32, Kings Complex Near KBN Hospital Station Road Gulbarga 585 101 Phone : 222394 Fax : 08472-224352

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SUPER 'A' GRADE BRANCH OFFICE

#48, I st & 2nd Floor 3 # 197, 1st & 2nd Floor Church Street, West of Chord Road (M.G. Road Branch), Bangalore 560 086 Bangalore 560 001 Phone : 23493739, 23495812 Phone : 25594198 , 25597306 Fax : 080-23494628 Fax : 080-25594836 8th Floor, Jayanagar Shopping Complex, 4th Block, Jayanagar, Bangalore 560 011 Phone : 26637565, 26652277 Fax : 080-26547165

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'A' GRADE BRANCH OFFICES

Bangalore Rural Branch Office # 48, Ist Floor, Church Street, Bangalore 560 001 Phone : 080-25581357, 25588981 Hotel Sanman Compound College Road Belgaum 590 001 Phone : 2429243 , 2427043 Fax : 0831-2432723

7 # 330, 3rd Floor, Somayaji House Bunts Hostel Road, P B No.750, Mangalore 575 003 Phone : 0824-2443554, 2443051 8 3rd & 4th Floor, Anantha Towers, Court Road Udupi 576 101 Phone 2526305 / 2526306 Fax : 0820-252900

Poona Bangalore Road 9 Race Course Road Rayapur, Dharwad580 009 Hassan 573 201 Phone : 2322235, 2322692 Phone : 268 703, 265 429 Fax : 0836-2322685 Fax : 08172-266836 # 2716, 1st Floor Sourabha Chambers Sri Harsha Road, Lashkar Mohalla, Mysore 570 001 Phone : 0821-2426197, 2437502 # 31 & 32, 1st Floor, Kings Complex Near KBN Hospital, Station Road Gulbarga 585 101 Phone : 08472-221407, 241648 10 # 153/A, Near DC Office Opp : Mount Carmel Convent, K R Road, Subhash Nagar Mandya 571 401 Phone : 08232-226744, 226745 11 CRS Complex Near KSRTC Bus Stand M B Road, Kolar 563 101 Phone : 224757 & 222537 Fax : 08152-222661

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Plot No.2, Indl. Estate B H Road, Tumkur 572 103 Phone : 2280089, 2280027, Fax : 0816 2280089

12 # 86/2 & 88/2, Hospet Road, Ward No.21 Bellary 583 102 Phone : 08392-242719, 242105

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'B' GRADE BRANCH OFFICES

Devaraj Urs Commercial Complex TSB Circle (Gopi Circle) Shimoga 577 201 Phone : 08182-270198, 224598 Near Basaveshwara Theatre, Near IB Chitradurga 577 501 Phone : 08194-224411, 222341

8 # L-8, Indl. Estate Madikeri 571 201 Phone : 08272-228588, 228143

9 Neelana Goudra Complex Opp : LIC Office, PB Road, Haveri - 581 110 Phone : 08375-232362, 233722

Near Ibrahimpur Rly. Gate 10 Plot No.18-21, B Bagewadi Road 6th Main Road, G Cross, Bijapur 586 101 Sector No.24, Navanagar Phone : 276102 Bagalkot 587 102 Fax : 08352-277032 Phone : 235478 Fax : 08354-235482 Plot No.7, MP No.1-1-53 Udayanagar, Station Road Raichur 584 101 Phone : 08352-227028, 232111 11 # 1179/1, S Nijalingappa Layout Near Ring Road Davanagere 577 004 Phone : 08192-225049, 225660

8-9-16, Rachamma Complex 12 Dr. R N Godbole Building 1st Floor, Bidar, CTS No. 6678 A, A-1, B-1 Udgir Road, Near Jail, Vidyanagar, Bidar 584 401 Gadag Phone 08482-228236, Phone : 08372-239052, 226381 276041

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1st Floor, Raykar Manor Kaikini Road Karwar - 581 301 Phone : 08382-221006, 221888

13 SPS Complex, 1st Floor, Vaniyar Road Chamarajnagar 571 313 Phone : 08226-722150 , 722801

PB # 168, 14 KPTCL Road Near District Field Near Lakshmi Talkies Hosamane Extension Road Koppal 583 231 Chickmagalur 577 101 Phone : 08539-220664, Phone : 230 447, 2234045 222157 Fax : 08262-230695 Disclaimer : This brochure is published mainly for the benefit of the entrepreneurs. KSFC shall not be responsible for any legal or other liabilities arising out of anything stated in this brochure nor for any error or omission therein. KSFC further reserves the right to modify / alter any of the terms, conditions & policies stated in this brochure.

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NOTES :

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NOTES :

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