INFORMATION MEMORANDUM
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus
nor a Statement in Lieu of Prospectus)
LORD KRISHNA BANK LIMITED
Registered & Administrative Office: Indian Express Building, Kaloor, Kochi - 682 017 (Kerala).
Tel.: (0484) 2403567/2043568/69/70; Fax.: (0484) 2403577
Website: www.lordkrishnabank.com E-Mail: ao@lordsbank.com
(A company incorporated under the Companies Act, 1956 and a banking company within the meaning of the Banking Regulation Act, 1949)
Private Placement of Unsecured Non-Convertible Redeemable Non-Cumulative Subordinated Bonds
of Rs. 10,00,000/- each for cash at par aggregating Rs. 60.00 crores
including option to retain oversubscription of Rs. 10.00 crores
GENERAL RISK: Investors are advised to read the Risk Factors carefully before taking an investment decision in
this offering. For taking an investment decision, the investors must rely on their own examination of the Issuer
and the Offer/ Issue including the risks involved. The Offer/ Issue being made on private placement basis, this
Information Memorandum has not been filed with Securities & Exchange Board of India (SEBI). The Securities
have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this
document. Specific attention of the investors is invited to the summarized and detailed Risk Factors mentioned
elsewhere in this Information Memorandum.
ISSUER’S ABSOLUTE RESPONSIBILITY: The Issuer, having made all reasonable inquiries, accepts
responsibility for, and confirms that this Information Memorandum contains all information with regard to the
Issuer and the Issue, which is material in the context of the Issue, that the information contained in this
Information Memorandum is true and correct in all material respects and is not misleading in any material
respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the
omission of which makes this document as a whole or any of such information or the expression of any such
opinions or intentions misleading in any material respect.
CREDIT RATING: ‘CARE A’ by CARE: Instruments carrying this rating are considered upper medium grade
instruments and have many favorable investment attributes. Safety for principal & interest are considered
adequate. Assumptions that do not materialize may have a greater impact as compared to the instruments rated
higher.
The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision.
The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating
should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of
time in the future. The Rating agency has the right to suspend, withdraw the rating at any time on the basis of
new information etc. For details, please refer to para on Credit Rating mentioned elsewhere in this Information
Memorandum.
LISTING: The Unsecured Non-convertible Redeemable Non-cumulative Subordinated Bonds are proposed to be
listed on The Stock Exchange, Mumbai (BSE).
TRUSTEE: The Western India Trustee & Executor Company Limited (WITECO), 161/C, 16 th Floor, Mittal Court,
Nariman Point, Mumbai – 400 021, has given their consent to the Issuer for being appointed as the Trustee for
the present issue of Rs. 50.00 crores of Bonds. The text of consent letter from WITECO to act as Trustee for and
on behalf of the holder(s) of bonds is reproduced elsewhere in this Information Memorandum.
REGISTRAR TO THE ISSUE
CAMEO Corporate Services Limited
‘Subramanian Building’, 5th Floor,
No. 1, Club House Road,
Chennai – 600 002.
Tel No. (044) 28460390,28460425
Fax No. (044) 28460129.
E-Mail: cameosys@satyam.net.in
ISSUE OPEN FROM FEBRUARY 10, 2004 TO MARCH 20, 2004
LORD KRISHNA BANK LTD.
TABLE OF CONTENTS
INDEX
TITLE
DEFINITIONS/ ABBREVIATIONS
RISK FACTORS AND MANAGEMENT PROPOSALS THEREOF
HIGHLIGHTS OF THE BANK
PAGE NO.
3
4 – 12
12
PART I
I.
GENERAL INFORMATION
13 – 16
II.
CAPITAL STRUCTURE
17 – 18
III.
TERMS OF THE PRESENT ISSUE
19 – 25
IV.
PARTICULARS OF THE ISSUE
V.
BANK & MANAGEMENT
27 – 45
VI.
SIGNIFICANT REGULATORY MATTERS RELATED TO THE BANK
45 – 47
VII.
ORGNAISATION STRUCTURE & MANAGEMENT
47 – 50
VIII.
STOCK MARKET DATA OF THE EQUITY SHARES OF THE BANK
IX.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
PERFORMANCE
X.
BASIS FOR ISSUE PRICE
XI.
OUTSTANDING LITIGATIONS, DEFAULTS AND MATERIAL DEVELOPMENTS
XI.
INVESTOR GRIEVANCES & REDRESSAL SYSTEM
26
50
51 – 52
52
53 – 54
54
PART II
I.
GENERAL INFORMATION
55 – 58
II.
FINANCIAL INFORMATION
59 – 68
III.
STATUTORY AND OTHER INFORMATION
69 – 70
V.
MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION
70 – 77
VI.
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
78
DECLARATION
79
PART III
2
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
DEFINITIONS/ ABBREVATIONS
Term
Meaning/ Definition/ Complete Term
Articles
ALM
ALCO
Act
Application Form
ARC/ A.R.C.
The Bank/ The Issuer Company/ the
Issuer/ Lord Krishna Bank/ LKB
Articles of Association of the Bank
Asset Liability Management
Asset Liability Committee
The Companies Act, 1956 as amended from time to time till date
The form in terms of which, the investors shall apply for the Unsecured Redeemable Subordinated Bonds
Asset Reconstruction Corporation
Lord Krishna Bank Limited, a company incorporated under the Companies Act, 1956 and a banking company within the meaning
of the Banking Regulation Act, 1949, and having its Registered & Administrative Office at Indian Express Building, Kaloor, Kochi 682 017 (Kerala).
Board of Directors of the Bank or a Committee thereof
Unsecured Redeemable Non-Convertible Non-Cumulative Subordinated Bonds in the nature of Promissory Notes/ Debentures of
Rs. 10,00,000/- each offered through private placement route under the terms of this Information Memorandum
The Holder(s) of the Bond(s) in dematerialised form
Bondholder(s) holding Bond(s) in dematerialized form (Beneficial Owner of the Bond(s) as defined in clause (a) of sub-section of
Section 2 of the Depositories Act, 1996)
Bank Guarantees
Bank of International Settlements
basis points
The Stock Exchange, Mumbai
Credit Analysis & Research Limited
Central Depository Services (India) Limited
Capital Adequacy Ratio
Capital to Risk Weighted Assets Ratio
Compounded Annual Growth Rate
Credit Information Bureau of India Limited
Certificate(s) of Deposit(s)
Corporate Debt Restructuring
Commercial Papers
Deferred Payment Guarantees
Deposit Insurance & Credit Guarantee Corporation
Deemed Date of Allotment for the Bonds
Debenture/ Bond Redemption Reserve
Debt Recovery Tribunals
Export Credit & Guarantee Corporation
Financial Year
Financial Institutions
Foreign Institutional Investors
Fund Based
Fixed Income Money Market & Derivatives Association of India
Government of India
Human Resource Development
Held Till Maturity
Private Placement of Unsecured Redeemable Non-Convertible Non-Cumulative Subordinated Bonds in the nature of Promissory
Notes/ Debentures of Rs. 10,00,000/- each for cash at par aggregating Rs. 60.00 crores including option to retain oversubscription
of Rs. 10.00 crores offered under the terms of this Information Memorandum
Memorandum of Information dated February 05, 2004 for Private Placement of Unsecured Redeemable Non-Convertible NonCumulative Subordinated Bonds in the nature of Promissory Notes/ Debentures of Rs. 10,00,000/- each for cash at par
aggregating Rs. 60.00 crores including option to retain oversubscription of Rs. 10.00 crores to be issued by Lord Krishna Bank Ltd.
Income Tax
Information Systems
Life Insurance Corporation of India
Letters of Credit
Memorandum of Association of the Bank
Mutual Fund(s)
National Securities Depository Limited
Non Resident Indians
Non Performing Asset(s)
Non-Banking Finance Companies
National Company Law Tribunal
Non-Fund Based
Overseas Corporate Bodies
One Time Settlement
Out-of-court Settlement
Prime Lending Rate
Permanent Account Number
Priority Sector Credit
CAMEO Corporate Services Limited
Board/ BoD/ BOD
Bond(s)
Bondholder(s)
Beneficial Owner(s)
BGs
BIS
Bps
BSE/ concerned Stock Exchange
CARE
CDSL
CAR
CRAR
CAGR
CIBIL
CDs
CDR
CPs
DPGs
DICGC
DDA
DRR
DRT
ECGC
FY/ F.Y.
FIs
FIIs
FB
FIMMDA
GOI/ GoI
HRD
HTM
Issue/ Offer/ Offering
Information Memorandum/ Offer
Document
IT
IS
LIC
LCs
Memorandum
MF/ MFs
NSDL
NRIs
NPA/ NPAs
NBFCs
NCLT
NFB
OCBs
OTS
OCS
PLR
PAN
PSC
Registrars to the Issue/ Registrars/
Registrar & Transfer Agents
RBI
ROC/ RoC
RNBCs
Sole Arranger
SEBI
SARFAESI
SSIs
SLR
Trustees/ Trustees to the
Bondholder(s)/ WITECO
TDS
VRS
W/O
Reserve Bank of India
Registrar of Companies, Kerala at Kochi
Residuary Non-Banking Companies
A. K. Capital Services Limited
Securities and Exchange Board of India
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
Small Scale Industries
Statutory Liquidity Ratio
The Western India Trustee & Executor Company Limited
Tax Deducted at Source
Voluntary Retirement Scheme
Written Off
3
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
RISK ENVISAGED BY MANAGEMENT AND MANAGEMENT PROPOSALS (MP) TO
ADDRESS THE RISKS
Following are certain issues for the investors to consider before taking an investment decision in
the offer. In some of the risk factors and management proposals thereof, reference has been
invited for detailed para mentioned elsewhere in this Information Memorandum, which can be
used to obtain more details about the said risk.
INTERNAL RISKS
1. Redemption Reserve & Unsecured Bonds
Creation of Redemption Reserve is not envisaged for the proposed issue of bonds and the Bonds
proposed to be issued are unsecured i.e. they are not proposed to be secured against any asset
of the Bank.
MP: LKB is a banking company within the meaning of the Banking Regulation Act, 1949. The
resources through current issue of bonds are being raised by the Bank for augmenting the Tier-II
Capital for strengthening the Capital Adequacy and enhancing its long term resources.
Department of Company Affairs, Ministry of Law Justice and Company Affairs, Government of
India has vide general clarification no.6/3/2001-CL.V dated 18/04/2002 clarified that banks need
not create Debenture Redemption Reserve as specified under section 117C of the Companies
Act, 1956. Also as per extant RBI guidelines in respect of issue of Tier-II bonds issued vide its
circular no. DBOD. BP.BC.5/21.01.002/98-99 dated 08-02-1999, the Tier-II bonds are to be
issued as unsecured and subordinated bonds for being eligible for inclusion in Tier II capital of the
Issuing Bank. Moreover since the resources raised by LKB are being utilised for the purpose of its
business i.e. providing credit and other facilities to the industry/other public segments, the assets
of LKB are mostly in the form of loans and advances and investment in securities. Hence it is
proposed that the bonds shall be unsecured in nature and that they shall not be secured against
any asset of the Bank. The Bank has appointed a Trustee to protect the interest of the investors.
2.
Credit Risk
The Bank’s main business of lending carries an inherent credit risk, which involves inability or
unwillingness of a customer or counterparty to meet commitments in relation to lending, trading,
hedging, settlement and other financial transactions.
MP: The Bank takes adequate care to minimise such risks by having a well-diversified loan
portfolio. The Bank also follows a comprehensive project/credit appraisal system and lending
norms, which govern industry/client exposure. The Bank has put in place a credit rating system
under which the borrowal accounts of Rs 10 Lacs and above are rated on several parameters and
the risk is priced with a suitable mark-up over PLR based on the credit rating. The Bank has also
implemented an active Risk Management Policy aimed at mitigating various credit related
risks.For other details on the credit risk management process in the Bank, the investors may refer
to the para ‘Risk Management’ mentioned elsewhere in this Information Memorandum.
3.
Market Risks
Increased interest rate volatility exposes LKB to market rate risk arising out of maturity/ rate
mismatches.
MP: Risks arising from interest rate volatility are inherent to the business of financial
intermediation and lending. However, the Bank has put in place a system of regular review of
lending and deposit rates in order to minimise the interest rate risk.
4
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
The Asset Liability Management Committees of the Bank reviews the interest rates risk on a
regular basis and revises the interest rates. Continuous Risk Management measures are initiated
depending upon the movement in the market interest rates. For more details on the Risk
Management procedures, investors are advised to refer to para ‘Risk Management’ mentioned
elsewhere in this Information Memorandum.
4.
Asset Liability Position
A large portion of the funding of the Bank is in the form of short and medium term deposits. The
asset liability position of the Bank could be affected if the depositors do not roll over the deposits.
MP: As per the normal behavioral pattern and past experience, a large portion of the deposits
gets rolled over. The Bank feels that in the event of these deposits not being rolled over, the fresh
accretion of deposits would take care of the Asset Liability mismatches. In addition, the Bank has
the cushion of investments of Rs. 517.79 crore in the long-term (over 5 years) category, which
can be utilized to correct any medium term mismatches. Moreover, the Bank has an Asset
Liability Management system in place to actively monitor and manage the duration and liquidity
mismatches. For more details on the Asset Liability position refer to the para ‘Asset Liability
Management’ mentioned elsewhere in this Information Memorandum.
5.
Credit Rating
LKB has obtained credit rating of ‘CARE A’ from CARE for an amount of Rs. 60.00 crores for its
current issue of Tier-II Bonds. Instruments carrying this rating are considered upper medium
grade instruments and have many favorable investment attributes. Safety for principal & interest
is considered adequate. Assumptions that do not materialize may have a greater impact as
compared to the instruments rated higher.
MP: Investors may please note that, the rating is not a recommendation to buy, sell or hold
securities and investors should take their own decision. The rating may be subject to revision,
suspension or withdrawal at any time by the assigning rating agency and each rating should be
evaluated independently of any other rating. The ratings obtained are subject to revision at any
point of time in the future. The Rating agency has the right to suspend, withdraw or revise the
rating at any time on the basis of new information etc. Credit Rating of all listed and unlisted
taxable bonds/ debentures/ commercial paper issued by the LKB for the last 3 years have been
disclosed under the head ‘Credit Rating’ mentioned elsewhere in this Information Memorandum.
6.
Contingent Liabilities
As on March 31, 2003 the contingent liabilities of the Bank were at Rs. 332.00 crores comprising
claims against the Bank not acknowledged as debts (Rs. 18.81 crores), liability on account of
outstanding forward exchange contracts (Rs. 100.81 crores), guarantees on behalf of constituents
(Rs. 143.27 crores) and acceptances, endorsements and other obligations (Rs. 69.11 crores).
MP: The contingent liabilities have arisen in the normal course of business of the Bank and are
according to the prudential norms prescribed by RBI.
7.
Pending Grievances
As on 30.09.2003 there was no shareholders’ complaint pending against the Bank. Total
complaints received from shareholders and disposed of during the period 01.04.2003 to
30.09.2003 were 119. Out of which 93 cases were for non-receipt of dividend which were
redressed either by sending demand drafts or duplicate/ re-validated dividend warrants. 23 cases
are with respect to non-receipt of share certificate relating to Rights Issue 2002. It was identified
that 22 cases were with respect to furnishing of incomplete address, resultant whereof, the
certificates were returned unserved.
5
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
MP: The Company Secretary of the Bank looks into the shareholders’ complaints/ grievances
and takes necessary steps for their redressal. Share transfers, dividend payment and all other
investor related activities are attended to and processed at the office of the Registrar & Transfer
Agent, M/s. CAMEO Corporate Services Limited. The Bank has put in place the Investor
Relations Cell at its Head Office to look after the services needed by the shareholders. No
shareholders’ complaint has been pending against the Bank for more than 60 days. With respect
to the current issue of bonds, the Bank has designated Company Secretary, to be a Compliance
Officer, who can be contacted by the investors in case of any pre-issue/ post-issue related
problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account,
non-receipt of refund order(s), interest warrant(s)/ cheque(s) etc.
8.
Income Tax Proceedings
Income Tax and interest tax disputed demand amounting to Rs.14.82 crores (including cases filed
against the Bank by the IT authorities) are at various stages of appeal with the Income Tax
authorities. The Bank has not made any provision in this regard and adverse ruling, if any, shall
affect the financials of the Bank.
MP: Appeals have been preferred by the bank to the concerned Tax Authorities in respect of the
above matters and bank is hopeful of favourable decisions.
9.
Non Performing Assets (NPAs)
As on 31.03.2003 and 30.09.2003, the net NPAs of the Bank stood at 6.33% and 9.88% of its net
advances amounting to Rs. 915.04 crores and Rs.708.13 crores respectively in absolute terms. In
the event of non-recovery of these assets, the Bank may have to provide for these NPAs in future,
which might affect the profitability of the Bank in future. For details, investors are advised to refer
to para ‘Asset Classification, Income Recognition & Provisioning’ mentioned elsewhere in this
Information Memorandum.
MP: The Net NPAs of the Bank have consistently been declining in percentage terms, from 9.85%
as on 31.03.2002 to 6.33% as on 31.03.2003 but increased to 9.88% as on 30.09.2003 due to
some fresh additions. The Bank is taking steps to reduce the proportion of non-performing assets
through aggressive recovery drives combined with improved risk management practices. Further,
there have been substantial changes in the legislative and operating environment enabling FIs
and Banks to pursue recovery of overdues. Besides Debt Recovery Tribunal (DRT) set up for
faster settlement of recovery litigation, GoI has enacted ‘The Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002’ enabling FIs and Banks to
securitise and reconstruct financial assets and enforce security more effectively. Reserve Bank of
India has formulated detailed guidelines for operation of the scheme. The Bank has been taking
recourse to all the available methods to recover its over dues from the borrowers. The Bank has
provided for NPAs in conformity with RBI guidelines.
10.
Asset Concentration
The top 5 industries (non-food) account for 22.56% and 21.13% of the gross credit exposure of
the Bank as on 31.03.2003 and 30.09.2003 respectively. Also, the top ten borrowers of the Bank
account for about 14.72% and 16.25% of the gross total advances of the Bank as on 31.03.2003
and 30.09.2003 respectively. The borrower specific and industry specific behaviour may
potentially affect the overall asset quality of the Bank.
MP: The Bank has put in place a credit monitoring mechanism to monitor the performance of its
borrowers, regularly performs appraisal and do the requisite follow up. The top ten borrowers of
the Bank as mentioned above are Standard Assets as on 31.03.2003 and as on 30.09.2003.
6
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
As regards the industry concentration, it has been the policy of the Bank to diversify the
assistance over different industry/promoter groups with a prudential cap of 10% to a single
industry. Investors are advised to refer to para ‘Industry-wise Classification’ mentioned elsewhere
in this Information Memorandum.
11.
Profits of the Bank
The growth in net profits of the Bank from Rs. 19.71 crore in FY 2002 to Rs. 23.05 crore in FY
2003 (growth of 16.95%) can be mainly attributed to treasury profits, which may not be
sustainable in future. The Bank made a profit of Rs. 47.96 crores from sale of investments
(treasury income) during FY03.
MP: It may be noted that operating profit of the Bank has come from diversified income streams
comprising net interest income, profit on sale of securities and other income. As per industry
trend, LKB has also earned good profits on sale of investments. Immediately sensing that further
opportunity may not be good, the Bank has repositioned itself, concentrating more on expansion
of advance portfolio; a ,mix of retail and corporate Book.
12.
Regional Concentration of the Bank
LKB has a regional concentration in southern parts of the country accounting for approximately
67% of the branches in the state of Kerala. The regional presence of the Bank may compromise
its competitive position vis-à-vis its national level competitors.
MP: Till the year ended 1997, the bank had 72 branches in 2 states with 67 (93%) branches in
state of Kerala and only 5 (7%) outside the state of Kerala. As on 30.09.2003 the bank has 101
branches out of which 69 (68%) branches are in the state of Kerala and 32 (32%) out of the state
of Kerala. With the RBI approval for 13 more branches in hand, the tally of branches shall go upto
114 with 69 (60%) in the state of Kerala and 45(40%) outside the state of Kerala. The expansion
of the branches have been to major cities/ potential centres covering 11 states as against 2 states
in the year 1997. The future expansion of the Bank is also oriented on the similar lines. Also, the
Bank proposes to effectively utilise technology to increase its reach and presence. Further, the
regional presence of the Bank has not been a hindrance to its growth prospects. The total
deposits of the Bank have grown at a CAGR of 149.08% to Rs.1663.29 crores and the net
advances have grown at a CAGR of 148.90% to Rs. 915.04 crores during the past 5 years ending
31.03.2003. For details of geographical distribution of branches, investors are requested to refer
to para ‘Distribution of Branches’ mentioned elsewhere in this Information Memorandum.
13.
Decline in Return Ratios
Yield on Investment of the Bank (excluding profit on sale of investments) has shown a declining
trend from 10.22% in FY 2002 to 8.92% in FY 2003 and further to 7.67% in September 2003.
Though the Yield on Advances of the Bank has increased from 11.52% as on 31.03.2002 to
12.17% as on 31.03.2003, it has declined to 10.35% during the period ended 30.09.2003.
Average rate of interest earned on interest earning assets has fallen from 11.21% in FY 2001 to
8.69% in FY 2003 and further to 7.26% in September 2003.
MP: Yield on investments and average rate of interest earned has come down because of the
interest rate in general coming down. The continuous downward trend in the interest rates over
last one year has been the major reason for decline in Yield on Investment of the Bank.
14.
Outstanding Litigations against the Bank
There are 18 cases with monitory relief amounting to Rs. 2.06 crores claimed therein against the
Bank. For details, please refer to the para on Litigation mentioned elsewhere in this Information
Memorandum.
7
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
MP: These claims are not likely to affect the operations and finances of the Bank.
15.
Litigation against the Bank’s Subsidiaries
The Bank has no subsidiary and therefore there is no data regarding outstanding litigations
against the subsidiaries of the Bank.
16.
RBI’s Annual Financial Inspection Report
The Annual Inspection Report of RBI on the financial position of the Bank as on 31.03.2003 has
identified certain weaknesses in the system, operational irregularities and other deficiencies in the
internal controls.
MP: The Bank would like to clarify that the inspection of the Bank by RBI is a regular exercise and
is carried out periodically for all the banks and financial institutions. The reports of RBI are strictly
confidential and the RBI does not allow disclosure of its inspection reports. The Bank has taken
necessary required action on the observation of RBI. All the disclosures in the Information
Memorandum are on the basis of management and statutory audit reports of the Bank.
17.
Contingent Liabilities of Subsidiaries of the Bank
The Bank has no subsidiary and therefore there is no data regarding contingent liabilities of the
subsidiaries of the Bank.
18.
Utilization of Funds
The utilization of the funds proposed to be raised through this private placement is entirely at the
discretion of the Bank and no monitoring agency has been appointed to monitor the deployment
of funds.
MP: The funds raised through this private placement are not meant for any specific project and
hence a monitoring agency may not be required. The Bank is managed by professionals under
the supervision of its Board of Directors. Further, the Bank is subject to a number of regulatory
checks and balances as stipulated in its regulatory environment. Therefore, the management
believes that the funds raised via this private placement would be utilised only towards
satisfactory fulfillment of the ‘Objects of the Issue’ mentioned elsewhere in this Information
Memorandum.
19. Export Credit Target
The Bank has not met export credit target (18%. of net credit) for the last five years. For more
details, refer to para ‘Export Credit’ elsewhere in the Information Memorandum.
MP: The Bank started its International Banking activities only in the year 2002 on getting RBI
approval. The Export business of the Bank is growing steadily. The non-achievement of this target
has no negative impact on the working results of the Bank.
20. Credit Decisions
The credit decisions of the Bank are subjected to various risk parameters.
MP: In a dynamic environment, all the credit decisions are subjected to various risk parameters.
Risk cannot be entirely eliminated and business decisions may suffer if risk angles are over
emphasized. Bank is following a prudent policy where identification and mitigation of risk is of
utmost importance. Prudential limits are fixed on various financial parameters to implement risk
management guidelines. Bank has implemented various Credit Risk Management guidelines
given by the Reserve Bank of India. Bank has fixed internal exposure ceilings based on credit
rating of the borrowal account to mitigate concentration risk.
8
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
The entire credit portfolio is divided into different segments which are classified under preferred/
discouraged/ cautious list. Bank has also stipulated criteria for taking exposures in a particular
industry. Maximum industry wise stipulated exposure is 10 per cent of total advances except
infrastructure and engineering for which special treatment is given.
21. Credit Policy of the Bank
The credit policy followed by the Bank may materially influence its credit portfolio.
MP: The Bank is having a comprehensive loan policy document. The policy is continuously
upgraded in tune with market changes and revision in RBI guielines. The policy aims at complying
with various RBI guidelines regarding credit risk management and ultimately improving overall
asset quality, risk bearing capacity and develop strong and healthy credit portfolio of the Bank.
The prime focus while sanctioning the loan is integrity/ character coupled with ability to run the
business even in adverse business conditions. The thrust of credit expansion is on small and
retail advance. While sanctioning the advances, emphasis is given on viability of the activity,
security and recoverability of advance.
EXTERNAL RISKS
1. Regulatory restrictions on the Bank and limitations of the powers of bondholders of
the Bank
There are a number of restrictions as per the Banking Regulations Act, 1949 (Amended), which
impede flexibility of the operations of the Bank and affect/restrict investors’ right. These are as
under:
i. The Bank can carry on business/activities as specified in the Act. There is no flexibility to
pursue profitable avenues if they arise, in contrast with companies under the Companies Act,
where shareholders can amend the Objects Clause by a special resolution.
ii. In terms of Section 8 of The Banking Regulation Act, 1949, the Bank is prohibited from trading
in goods, which may act as an operational constraint.
iii. In terms of Section 17(1) of The Banking Regulation Act, 1949, every banking company shall
create a Reserve Fund and shall, out of the balance of profit of each year as disclosed in the
Profit & Loss a/c prepared under Section 29 and before any dividend is declared, transfer to
the Reserve Fund a sum equivalent to not less than twenty five percent of such profit.
iv. In terms of Section 19 of The Banking Regulation Act, 1949 there are some restrictions on the
banking companies regarding opening of subsidiaries which may deny the Bank from
exploiting emerging business opportunities.
v. In terms of Section 23 of The Banking Regulation Act, 1949 there are certain restrictions on
the banking companies regarding opening of new place of business and transfer of existing
place of business, which may hamper the operational flexibility of the Bank.
vi. In terms of Section 25 of The Banking Regulation Act, 1949 each banking company has to
maintain assets in India which is not less than 75% of its demand and time liabilities in India
which in turn may prohibit the Bank from creating overseas assets and exploiting overseas
business opportunities.
vii. The financial disclosures in this Information Memorandum may not be available to the
investors after listing on a continuous basis.
viii. There are restrictions in the Banking Regulation Act regarding,
 Management of a bank including appointment of directors.
 Borrowings and creation of floating charge thereby hampering leverage.
 Expansion of business, as the branches need to be licensed.
 Disclosures in the profit & loss account and balance sheet.
 Production of documents and availability of records for inspection by shareholders.
 Reconstruction of banks through amalgamation.
 Further issues of capital including issue of bonus shares/rights shares.
9
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
2. Sensitivity to the Economy and Extraneous Factors
The Bank’s performance is highly correlated to the performance of the economy and the financial
markets. The health of the economy and the financial markets in turn depends on the domestic
economic growth, state of the global economy and business and consumer confidence, among
other factors. Any event disturbing the dynamic balance of these diverse factors would directly or
indirectly affect the performance of the Bank including the quality and growth of its assets.
3. Competition from Existing and New Commercial Banks
Competition in the financial sector has increased with the entry of new players and is likely to
increase further as a result of further deregulation in the financial sector. The Bank may face
competition both in raising resources and in deploying them.
MP: The Bank has an established broad-based presence and has been taking steps to enhance
customer satisfaction by upgrading skills, systems and technology to meet such challenges. The
Bank is attempting to add quality assets on competitive terms. The Bank is also taking steps to
broad base its product bouquet with a special emphasis on enhancement in the non-fund-based
income. On the resource-raising front, the Bank is actively endeavoring to broaden its reach and
raise resources through its wide distribution network of 101 branches and 7 Extension Counters.
For more details on the business environment of the Bank, investors are advised to refer to the
para ‘Management Discussion and Analysis of Financial Results’ mentioned elsewhere in this
Information Memorandum.
4. Changes in Regulatory Policies
The operations of the Banking Industry are subject to regulations by the Government/ RBI. Major
changes in Government/ RBI policies relating to banking sector may have an impact on the
operations of the Bank.
MP: The policy changes may provide both opportunities and challenges for the Bank. The Bank
has a long presence in the banking sector, for more than 63 years and does not perceive policy
changes to be a major threat.
5. Disintermediation in the Financial Markets
As the financial markets mature and with growing developments in the capital markets, the trend
towards disintermediation may be increasingly in evidence. In such a scenario, may companies
including the current and potential borrowers of the Bank may access capital markets directly for
their financing needs and reduce their dependence on the banking system. This may have an
adverse impact on the level of deposits and also on the level and mix of advances portfolio and
the profitability of the Banks.
MP: The Bank has, in recent years, launched several retail lending schemes and value added
products so as to broaden its borrower base. Further, disintermediation brings with it the
opportunity for the Bank to expand its fee-based activities. The Bank has been endeavouring to
develop a presence in several financial services to earn fee based income by focussing on
businesses such as foreign exchange, treasury, investments, cash management, insurance,
depository, debenture trustee etc., thus taking advantage of the disintermediation phenomenon.
6. Forex Risk
Exchange Rate fluctuations may have an impact on the Bank’s financial performance.
MP: As per RBI guidelines, banks are not allowed to keep open position on their foreign exchange
transactions beyond prescribed limits on a daily basis. Foreign exchange transactions beyond
such limits, if any, must be squared off at the end of each day.
10
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Hence, the risk from exchange rate fluctuations is minimised. The Board of Directors of the Bank
has also prescribed limits for gaps or mismatches in maturities of Bank’s foreign currency assets
and liabilities and forward transactions in foreign exchange. The Bank operates within the limits
fixed for gaps or mismatches in maturities of Bank’s foreign currency assets and liabilities and
forward transactions in foreign exchange, thus minimising the risks of mismatches in maturities
and interest rates.
7. Interest Rate Risk
Present interest rates on deposits and advances are based on so may micro and macro economic
factors including the directives of the Reserve Bank of India which are likely to be market driven
due to deregulation and thereby may result in increasing pressure on spreads and affect
profitability. Interest rate volatility exposes the Bank to an interest rate risk or market risk. Such
interest rate risk has a potential impact on net interest income or net interest margin as well as on
the market value of the fixed income securities held by the Bank in its investment portfolio.
MP: These risks are inherent in the banking business. However, the Bank has put in place a
system of regular review of lending and deposit rates in order to minimise the interest rate risk.
The Asset Liability Management Committees of the Bank reviews the interest rates on a regular
basis and revises the interest rates depending upon the movement in the market interest rates.
For more details on the Risk Management procedures, investors are advised to refer to para ‘Risk
Management’ mentioned elsewhere in this Information Memorandum.
8. Operational Risk
Operational risk is a result of failure of operating system in a bank due to certain reasons like
computer break-ins, power disruptions, fraudulent activities, natural disaster, human error or
omission or sabotage.
MP: For managing operational risk, the Bank has laid down well-defined systems and procedures.
The Bank has set up a separate department to improve the systems and procedures to suit the
changing environment. The Bank has also in place a strong internal inspection and audit system.
For managing IT related risks, the Information Systems Security Policy is in place. The Bank has
an effective HRD department, which formulates and monitors delegation of duties and
responsibilities at different level.
9. Financial Statements in the Information Memorandum
The financial statements and derived ratios therefrom contained in the Information Memorandum
are prepared/computed as per the permissible accounting practices. While due care has been
taken to reflect the true economic reality regarding the financials of the Bank as far as possible,
the investors may want to make their own adjustments to the same before arriving at an
investment decision in the offer.
MP: The financial statements and the derived ratios have been prepared in conformity to the
extant guidelines and the same have been certified by the statutory auditors of the Bank. The
Bank is also governed by the prudential norms of RBI for income recognition, NPA provisioning
etc.
NOTES TO RISK FACTORS
 Net worth (excluding revaluation reserves) of the Bank as on 31.03.2003 and 30.09.2003 was
Rs.119.28 crores and Rs.131.52 crores respectively.
 The present private placement of the Bank aggregates Rs. 60.00 crores including option to
retain oversubscription of Rs. 10.00 crores.
 The Book Value of the share as on March 31, 2003 and September 30, 2003 is Rs. 15.60 and
Rs.17.40 respectively (face value of Rs. 10/-).
11
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.




There is no subsidiary of LKB and therefore the provisions regarding furnishing of information
regarding transactions of LKB with its subsidiaries/ co-promoted companies during the last
three years shall not be applicable.
RBI carries out regular inspection of all the banks and financial institutions. The reports of RBI
are strictly confidential. The Bank continuously interacts with RBI and furnishes information/
clarifications required by them. RBI does not allow disclosure of its inspection report and all
the disclosures in the Information Memorandum are on the basis of Management, and
Statutory Audit reports of the bank.
The financial information as contained in PART II under para I to para IX including the notes
to accounts, significant accounting policies as well as auditors’ qualifications has been duly
certified by the statutory auditors of the Bank. As far as possible, these audited numbers have
been used for computation or derivation of other financial information contained in the
Information Memorandum. However, such other financial information contained in the
Information Memorandum except as contained in PART II under para I to para IX has been
certified by the management of the Bank.
In terms of recommendations of RBI Working Group on ‘Consolidated Accounting and Other
Quantitative Methods to Facilitate Consolidated Supervision’ (December 2001), all banks,
whether listed or unlisted, should prepare and disclose Consolidated Financial Statement
(CFS) from the financial year commencing from 1.04.2002 in addition to solo financial
statements at present.
HIGHLIGHTS OF THE BANK
 Bank with 63 years of existence.
 The Bank is professionally managed with a track record of profitability
 The Bank has a large network of 101 Branches, 7 Extension Counters and 28 ATMs spread
over 11 States of the Country.
 Capital Adequacy Ratio of 12.82% and 15.75% as on 31.03.2003 and 30.09.2003
respectively, which is above minimum of 9% prescribed by RBI.
 Product portfolio includes Corporate Finance, Bill Finance, Trade finance, Consumer Loan,
Housing Loan, Education Loan, Vehicle Loan, Rent securitisation, Kisan Cards, various
Deposits schemes and miscellaneous services.
 Consistent Deposits growth: Deposits have grown by a CAGR of 25.63% during the last 5
years.
 Consistent Advances growth: Advances have grown by a CAGR of 25.61% during the last 5
years.
12
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
PART I
LORD KRISHNA BANK LIMITED
(A company incorporated under the Companies Act, 1956 and a banking company within the meaning of the Banking Regulation Act, 1949)
Registered & Administrative Office: Indian Express Building, Kaloor, Kochi - 682 017 (Kerala).
Tel.: (0484)2403567/2403568/69/70 Fax.: (0484) 2403577
Website: www.lordkrishnabank.com E-Mail: ao@lordsbank.com
Private Placement of Unsecured Redeemable Non-Convertible Non-Cumulative Subordinated Bonds of Rs.
10,00,000/- each for cash at par aggregating Rs. 60.00 crores including option to retain oversubscription of Rs.
10.00 crores
I.
GENERAL INFORMATION
OFFER OF BONDS
LKB is seeking offer for subscription of Unsecured Redeemable Non-Convertible Non-Cumulative Subordinated Bonds of
Rs. 10,00,000/- each for cash at par aggregating Rs. 60.00 crores including option to retain oversubscription of Rs. 10.00
crores.
AUTHORITY FOR THE PRESENT ISSUE
This present issue of Bonds is being made pursuant to the Resolutions passed at the Annual General Meeting held on
05.08.2003 and subsequently the meeting of the Board of Directors held on 17.11.2003.
REGISTRATION AND GOVERNMENT APPROVALS
This present issue of Bonds is being made in accordance with extant RBI guidelines vide its circular no. DBOD.
BP.BC.5/21.01.002/98-99 dated 08-02-1999 for issue of Tier-II Bonds as amended from time to time. The Bank can
undertake the activities proposed by it in view of the present approvals and no further approval from any government
authority(ies)/ Reserve Bank of India (RBI) is required by the Bank to undertake the proposed activities save and except
those approvals which may be required to be taken in the normal course of business from time to time.
DISCLAIMER CLAUSE
This Information Memorandum (“Memorandum”) is neither a prospectus nor a statement in lieu of prospectus and does
not constitute an offer to the public generally to subscribe for or otherwise acquire the Bonds to be issued by Lord Krishna
Bank Limited (LKB/ the Issuer/ the Bank/ the Company). The Memorandum is for the exclusive use of the Institutions to
whom it is delivered and it should not be circulated or distributed to third parties. This Information Memorandum is not
intended to be circulated to more than 49 parties. This Information Memorandum for issue of Bonds on private placement
basis has been prepared in conformity with the extant SEBI circular no. SEBI/MRD/SE/AT/36/2003/30/09 dated
September 30, 2003 and SEBI circular no. SEBI/MRD/SE/AT/46/2003 dated December 22, 2003. Therefore as per the
applicable provisions, copy of this Information Memorandum has not been filed or submitted to SEBI. It is to be distinctly
understood that the Information Memorandum should not, in any way, be deemed or construed that the same has been
cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the
project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed
in the Information Memorandum. The Issuer Company certifies that the disclosures made in this Information
Memorandum are generally adequate and are in conformity with the captioned SEBI circular. This requirement is to
facilitate investors to take an informed decision for making investment in the proposed Issue.
It should also be clearly understood that while the Issuer Company is primarily responsible for the correctness, adequacy
and disclosure of all relevant information in the Information Memorandum. The Issuer Company herein also certifies that it
has disclosed various material information including those relating to litigation like commercial disputes etc in the
Information Memorandum for the said Issue.
Further the Issuer Company confirms that:
a.
this Information Memorandum is in conformity with the documents, materials and papers relevant to the Issue;
b.
all the legal requirements connected with the said Issue as also the guidelines, instructions, etc., issued by SEBI,
the government and any other competent authority in this behalf have been duly complied with; and
c.
the disclosures made in this Information Memorandum are true, fair and adequate to enable the investors to make a
well informed decision as to the investment in the proposed Issue.
d.
all the intermediaries named in this Information Memorandum are registered with SEBI and that till date such
registration is valid.
The Issue of Bonds being made on private placement basis, filing of this Information Memorandum is not required,
however the same does not absolve the Issuer Company from any liabilities under Section 63 or Section 68 of the
Companies Act, 1956 or from the requirement of obtaining such statutory and other clearances as may be required for the
purpose of the proposed Issue. SEBI further reserves the right to take up at any point of time, with the Issuer Company,
any irregularities or lapses in this Information Memorandum.
13
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
DISCLAIMER STATEMENT FROM THE SOLE ARRANGER
In light of SEBI circular no. SEBI/MRD/SE/AT/36/2003/30/09 dated September 30, 2003 and SEBI circular no.
SEBI/MRD/SE/AT/46/2003 dated December 22, 2003, it is advised that the Issuer Company has exercised self duediligence to ensure complete compliance of prescribed disclosure norms etc in this Memorandum. The role of the Sole
Arranger in the assignment is confined to marketing and placement of the bonds on the basis of this Memorandum as
prepared by the Issuer Company. The Sole Arranger has neither scrutinized or vetted nor has it done any due-diligence
for verification of the contents of this Memorandum. The Sole Arranger shall use this Memorandum for the purpose of
soliciting subscription(s) from qualified institutional investor(s) in the bonds to be issued by the Issuer Company on private
placement basis. It is to be distinctly understood that the aforesaid use of this Memorandum by the Sole Arranger should
not in any way be deemed or construed that the Memorandum has been prepared, cleared, approved or vetted by the
Sole Arranger; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the
contents of this Memorandum; nor does it take responsibility for the financial or other soundness of this Issuer, its
promoters, its management or any scheme or project of this Issuer. The Sole Arranger or any of its directors, employees,
affiliates or representatives do not accept any responsibility and/or liability for any loss or damage arising of whatever
nature and extent in connection with the use of any of the information contained in this Memorandum.
DISCLAIMER STATEMENT FROM THE ISSUER
The Issuer Company accepts no responsibility for statements made otherwise than in the Information Memorandum or
any other material issued by or at the instance of the Issuer Company and anyone placing reliance on any other source of
information would be doing so at his/her/their own risk.
FILING OF INFORMATION MEMORANDUM
As per extant SEBI guidelines/ regulations, filing of this Information Memorandum is not required either with SEBI, RoC or
any other regulatory authority(ies). The present issue of bonds being made on private placement basis, copy of this
Information Memorandum along with the documents as specified under the head “Material Contracts and Documents for
Inspection” required to be filed with Registrar of Companies (RoC) under Section 60 of the Companies Act, 1956 shall not
be applicable and hence the same has not been delivered to RoC for registration nor has the same been filed with SEBI
for vetting/ comments/ registration.
DISCLAIMER CLAUSE OF THE STOCK EXCHANGE
As required, a copy of this Information Memorandum has been submitted to The Stock Exchange, Mumbai (hereinafter
referred to as BSE) for hosting the same on its web site. It is to be distinctly understood that such submission of the
Information Memorandum to BSE or hosting the same on its web site should not in any way be deemed or construed that
the Information Memorandum has been cleared or approved by BSE; nor does it in any manner warrant, certify or
endorse the correctness or completeness of any of the contents of this Information Memorandum; nor do it warrant that
this Issuer’s securities will be listed or continue to be listed on the Exchange; nor does it take responsibility for the
financial or other soundness of this Issuer, its promoters, its management or any scheme or project of this Issuer.
Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to
independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason
of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition
whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.
DISCLAIMER IN RESPECT OF JURISDICTION
This offer of Bonds is made in India to Companies, Corporate Bodies, Trusts registered under the Indian Trusts Act, 1882,
Societies registered under the Societies Registration Act, 1860 or any other applicable laws, provided that such Trust/
Society is authorised under constitution/ rules/ bye-laws to hold debentures in a Company, Indian Mutual Funds registered
with SEBI, Indian Financial Institutions, Insurance Companies, Commercial Banks including Regional Rural Banks and
Co-operative Banks (subject to RBI Permission) as defined under Indian laws). The Information Memorandum does not,
however, constitute an offer to sell or an invitation to subscribe to securities offered hereby in any other jurisdiction to any
person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession this
Information Memorandum comes is required to inform himself about and to observe any such restrictions. Any disputes
arising out of this issue will be subject to the exclusive jurisdiction of the courts at Kochi (Kerala). All information
considered adequate and relevant about the Issuer and the Issuer Company has been made available in this Information
Memorandum for the use and perusal of the potential investors and no selective or additional information would be
available for a section of investors in any manner whatsoever.
LISTING
The Bank is an unlisted Bank and therefore the equity shares of the Bank are not listed on any recognised Stock
Exchange.
The Bank has made an application to The Stock Exchange, Mumbai (BSE) to list the Bonds to be issued and allotted
under this Information Memorandum. The Bank shall complete all the formalities relating to listing of the Bonds within 70
days from the date of closure of the Issue. If such permission is not granted within 70 days from the Date of Closure of the
Issue or where such permission is refused before the expiry of the 70 days from the closure of the Issue, the Bank shall
forthwith repay without interest, all monies received from the applicants in pursuance of the Information Memorandum,
14
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
and if such money is not repaid within 8 days after the Bank becomes liable to repay it (i.e. from the date of refusal or 70
days from the date of closing of the subscription list, whichever is earlier), then the Bank and every director of the Bank
who is an officer in default shall, on and from expiry of 8 days, will be jointly and severally liable to repay the money, with
interest at the rate of 15 per cent per annum on application money, as prescribed under Section 73 of the Companies Act,
1956.
MINIMUM SUBSCRIPTION
As the Issue of Bonds is being made on private placement basis, the requirement of minimum subscription shall not be
applicable.
CAUTIONARY NOTE
Though not applicable to the issue of bonds, as a matter of abundant caution, attention of applicants is specially drawn to
the provisions of sub-section (1) of Section 68A of the Act, which is reproduced below:
“Any person who:
a) makes, in a fictitious name, an application to a company for acquiring, or subscribing for, any shares therein, or
b) otherwise induces a company to allot, or register any transfer of, shares therein to him, or any other person in a
fictitious name, shall be punishable with imprisonment for a term which may extend to five years.”
MINIMUM-MAXIMUM TARGET
The Bank proposes to make Issue of Unsecured Redeemable Non-Convertible Non-Cumulative Subordinated Bonds
aggregating Rs. 60.00 crores including right to retain oversubscription of Rs. 10.00 crores.
ISSUE SCHEDULE
The Issue will open for subscription at the commencement of banking hours and close at the close of banking hours on
the dates indicated below or earlier or on such extended date as may be decided by the Bank at its sole and absolute
discretion without giving any reasons or prior notice. In such a case, investors will be intimated about the revised time
schedule by the Bank. The Bank also reserves the right to keep multiple Deemed Date(s) of Allotment at its sole and
absolute discretion without any notice.
ISSUE OPENS ON
ISSUE CLOSES ON
DEEMED DATE OF ALLOTMENT
FEBRURARY 10, 2004
MARCH 20, 2004
MARCH 31, 2004
STATUTORY AUDITORS
M/s. M. R. Narain & Co.
Chartered Accountants
New No. 5, First Floor,
Club Road, Chetput,
Chennai – 600 031.
Tel No. (044) 28243450,28275556
Fax No. (044) 28271391
E-Mail: mrnarainco@eth.net
SOLE ARRANGER TO THE ISSUE
A. K. Capital Services Limited
135 & 136, 13th Floor, Free Press House,
Free Press Journal Marg,
215, Nariman Point,
Mumbai - 400 021.
Tel No. (022) 56349300.
Fax No. (022) 56360977.
E-mail: akcap@bom9.vsnl.net.in
REGISTRAR TO THE ISSUE
CAMEO Corporate Services Limited
‘Subramanian Building’, 5th Floor,
No. 1, Club House Road,
Chennai – 600 002.
Tel No. (044) 28460390.
Fax No. (044) 28460129.
E-Mail: cameosys@satyam.net.in
15
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
TRUSTEES FOR THE BONDHOLDERS
The Western India Trustee & Executor Company Limited
161/C, 16th Floor, Mittal Court,
Nariman Point,
Mumbai – 400 021.
Tel No. (022) 22880986, 22880988.
Fax No. (022) 22816477.
E-mail: witco@vsnl.net
BANKERS TO THE ISSUE
Lord Krishna Bank Limited
Registered & Administrative Office,
Indian Express Building,
Kaloor, Kochi - 682 017 (Kerala).
Tel.: (0484) 2403567,2043568,2403569
Fax.: (0484) 2403577
E-Mail : ao@lordabank.com
COMPLIANCE OFFICER AND COMPANY SECRETARY
Mr. G. Rajesh Kurup
Company Secretary
Lord Krishna Bank Limited
Secretarial Department
Registered & Administrative Office,
Indian Express Building,
Kaloor, Kochi - 682 017 (Kerala).
Tel.: Direct - (0484) 2402269 Board - (0484) 2403567/68
Fax.: (0484) 20405021
E-Mail : compsec@lordsbank.com
The investors can contact the Compliance Officer in case of any pre-issue/ post-issue related problems such as non-credit
of letter(s) of allotment/ bond certificate(s) in the demat account, non-receipt of refund order(s), interest warrant(s)/
cheque(s) etc.
BROKERS TO THE ISSUE
Apart from Sole Arranger to the Issue appointed by the Issuer Company, there is/are no other broker(s) appointed by the
Issuer Company for the purpose of marketing the Issue. Therefore no person/ firm/ company other the Sole Arranger to
the Issue, whether member of recognised stock exchange(s) or otherwise, can act as Brokers to the Issue.
CREDIT RATING
Credit Analysis & Research Limited (hereinafter referred to as ‘CARE’) has assigned a ‘CARE A’ rating to the Rs. 60.00
crores Tier-II Subordinated Bond Issue of the Bank vide its letter dated 08.01.2004 Instruments carrying this rating are
considered upper medium grade instruments and have many favorable investment attributes. Safety for principal &
interest are considered adequate. Assumptions that do not materialize may have a greater impact as compared to the
instruments rated higher. The text of the rating letter from CARE is reproduced elsewhere in this Information
Memorandum.
Please note that, the rating is not a recommendation to buy, sell or hold securities and investors should take their own
decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating
should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in
the future. The Rating agency has the right to suspend, withdraw the rating at any time on the basis of new information
etc.
Other than the above credit rating for its Bonds, the Bank has not sought any credit rating from any rating agency for any
of its listed or unlisted debt securities in the past 3 years.
UNDERWRITING
The present Issue of Bonds on private placement basis has not been underwritten.
16
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
II. CAPITAL STRUCTURE
As on March 31, 2003
1 SHARE CAPITAL
a Authorised Equity Share Capital
10,00,00,000 Equity Shares of Rs. 10/- each
b Issued Equity Share Capital
5,66,28,805 Equity Shares of Rs. 10/- each
c Subscribed & Paid-up Equity Share Capital
5,66,28,805 Equity Shares of Rs. 10/- each
2. PRESENT ISSUE OF BONDS THROUGH THIS INFORMATION MEMORANDUM
a.
Issue of 600 Unsecured Redeemable Non-Convertible Non-Cumulative
Subordinated Bonds of Rs. 10,00,000/- each (including right to retain
oversubscription of Rs. 10 crore)
b.
Now Offered in terms of this Information Memorandum
Issue of 600 Unsecured Redeemable Non-Convertible Non-Cumulative
Subordinated Bonds of Rs. 10,00,000/- each (including right to retain
oversubscription of Rs. 10 crore)
Of which, Reservations are
c.
Net Offer in terms of this Information Memorandum
Issue of 600 Unsecured Redeemable Non-Convertible Non-Cumulative
Subordinated Bonds of Rs. 10,00,000/- each (including right to retain
oversubscription of Rs. 10 crore)
3. PAID-UP EQUITY SHARE CAPITAL AFTER THE PRESENT ISSUE
5,66,28,805 Equity Shares of Rs. 10/- each
4. SHARE PREMIUM ACCOUNT
a.
Before the Issue
b.
After the Issue
NOTES ON CAPITAL STRUCTURE
(1) PROMOTER’S CONTRIBUTION AND LOCK-IN
-
Nominal Value
(Rs. in Crore)
Issue Amount
100.00
56.63
56.63
60.00
60.00
Nil
60.00
56.63
16.38
16.38
N.A.
(2) PROMOTERS CONTRIBUTION AND LOCK-IN IN RESPECT OF PROMOTERS WHOSE NAME FIGURE IN THE
INFORMATION MEMORANDUN AS PROMOTERS IN THE PARAGRAPH ON “PROMOTERS AND THEIR
BACKGROUND”
N.A.
(3) LIST OF TOP 10 SHAREHOLDERS AND THE NUMBER OF SHARES HELD BY THEM (as on September 30, 2003):
Sr. No. Name of Shareholder
Number of Shares Held
% Shareholding
1.
Mohan Exports (India) Pvt. Ltd
19230356
33.96
2.
Mr. A.K. Puri
9553851
16.87
3.
Smt. Neeru Puri
3484723
6.15
4.
V. I. C Enterprises
2753778
4.86
5.
D.S. Constructions
2035000
3.59
6.
Mr. Mohan Puri
1650000
2.91
7.
Smt. Monica Burman
1000000
1.77
8.
Smt. Sonia Puri
1000000
1.77
9.
Oriental Structural Engineers
573167
1.01
10.
Vinod Dhawan
568338
1.00
(4) SHAREHOLDING PATTERN (as on September 30, 2003):
Sr. No. Category
A
Promoter's Holding
1.
Promoters * Directors / Relatives
- Indian Directors/Relatives other than above
– Foreign Promoters
2
Persons acting in Concert
Sub Total *
B.
3.
a.
b.
c.
Non-Promoters Holding
Institutional Investors Mutual Funds & UTI
Banks, Financial Institutions, Insurance Companies (Central / State
Govt. Institutions / Non Government Institutions) (New India
Assurance)
Foreign Institutional Investors
Sub Total *
Number of Shares Held
36779348
36779348
112321
NA
--36891669
% Shareholding
64.94%
64.94%
0.20%
9075
0.02%
73350
82425
0.13%
0.15%
--65.14%
17
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Sr. No.
4.
a.
b.
c.
d.
Category
Others
Private Corporate Bodies
Indian Public
NRIs / OCBs
Trade Union
Number of Shares Held
% Shareholding
4574290
8.08%
15079491
26.63%
930
---Sub Total *
19654711
Grand Total
56628805
100.00%
*as defined in Regulation 2[h] of SEBI (Substantial Acquisition of Shares and Takeover) Regulations 1997. The Promoters’
holding shall include all entries in the Promoters’ Group – Individual or Body Corporates.
(5)
There are no identifiable promoters, hence the details regarding the shareholding of the promoters and details of
the transactions by them in the securities of Lord Krishna Bank cannot be given. At present, the promoter group
and their nominees (including subscribers to the Memorandum & Articles of Association) as defined in SEBI
(Disclosure & Investor Protection) Guidelines 2000, hold 36779348 equity shares.
(6)
Promoter group holding and lock-in provisions: The group holding after this issue would remain the same. Further
the present issue is a debt issue and therefore the provisions of lock-in do not apply.
(7)
The Issuer Company has not issued any shares or debentures or agreed to issue any shares or debentures for
consideration other than cash other than that mentioned elsewhere in the Information Memorandum, within the
two years preceding the date of this Information Memorandum.
(8)
The number of shareholders of the Issuer Company as on September 30, 2003 was 11026.
(9)
At any given time there shall be only one denomination for the shares of the Bank and the Bank shall comply with
such disclosure and accounting norms as specified by SEBI from time to time.
(10)
Reservation for small investors in allotment : The present Issue of bonds being made on private placement basis,
there shall be no reservation for small/ individual investors and the allotment for bonds shall be finalized by the
Bank at its sole and absolute discretion.
(11)
The Issuer Company has not raised any bridge loan or any other similar financial arrangement against the
proceeds of the Issue.
(12)
The promoters, Directors and the Sole Arranger of the Issuer Company has not entered into any standby, buyback or similar arrangements for purchase of securities offered through this Information Memorandum.
(13)
As on March 31, 2003 and September 30 2003, the Bank had no outstanding balance of Revaluation Reserves.
III.
TERMS OF THE PRESENT ISSUE
Lord Krishna Bank Limited is seeking offer for subscription of Unsecured Redeemable Non-Convertible Subordinated
Bonds of Rs. 10,00,000/- each for cash at par aggregating Rs. 60 crores including option to retain oversubscription of Rs.
10 crores.
The Bonds offered are subject to provisions of the Companies Act, 1956, Securities Contract Regulation Act, 1956,
Memorandum and Articles of Association of the Bank, Terms of this Information Memorandum, Instructions contained in
the Application Form and other terms and conditions as may be incorporated in the Trustee Agreement and Bond Trust
Deed. Over and above such terms and conditions, the Bonds shall also be subject to the applicable provisions of the
Depositories Act 1996 and the laws as applicable, guidelines, notifications and regulations relating to the allotment &
issue of capital and listing of securities issued from time to time by the Government of India (GoI), Reserve Bank of India
(RBI), Securities & Exchange Board of India (SEBI), concerned Stock Exchange(s) or any other authorities and other
documents that may be executed in respect of the Bonds.
NATURE & STATUS OF THE BONDS
The Bonds are to be issued in the form of Unsecured Redeemable Non-Convertible Non-Cumulative Subordinated Bonds
in the nature of Promissory Notes or Debentures. The Bonds will constitute direct, unsecured and subordinated
obligations of the Bank, ranking pari passu with the existing/ future subordinated debt of the Bank and subordinated to the
claims of all other creditors and depositors of the Bank as regards repayment of principal and interest by the Bank.
Depending on the category of the investors, the Bank will have the option to issue either Promissory Notes or
Debentures. The Bonds shall be free of any restrictive clauses and shall not be redeemable at the initiative of the holder
or without the consent of the Reserve Bank of India (RBI).
INSTRUMENT & ISSUE DETAILS AT A GLANCE
Issue Size
Rs. 60 crores including option to retain oversubscription of Rs. 10 crores
Issue Objects
Augmenting the Tier-II Capital for strengthening the Capital Adequacy and enhancing long
term resources of the Bank
Instrument
Unsecured Redeemable Non-Convertible Non-Cumulative Subordinated Bonds in the nature of
Promissory Notes/ Debentures
Instrument Form
Only in Dematerialised Form
Credit Rating
‘CARE A’ by CARE
Face Value
Rs. 10,00,000/- per Bond
Issue Price
At par (Rs. 10,00,000/- per Bond)
Minimum Application
1 Bond and in multiples of 1 Bond thereafter
Option
Option-I
Option-II
18
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Tenure
Put & Call Option
Redemption/ Maturity
63 Months (5 Year 3 Months)
87 Months (7 Year 3 Months)
None
None
At par at the end of 63 Months from the
At par at the end of 87 Months from the
Deemed Date of Allotment
Deemed Date of Allotment
Coupon Rate *
7.00% p.a.
7.10% p.a.
Interest Payment
Annually
Annually
Listing
Proposed on The Stock Exchange, Mumbai (BSE)
Trustee
The Western India Trustee & Executor Company Limited (WITECO) has been appointed by
the Bank to act as Trustees for the bondholder(s)
Interest on Application At the respective coupon rate (subject to deduction of tax at source, as applicable) from the
Money
date of realisation of cheque(s)/ demand draft(s) upto one day prior to the Deemed Date of
Allotment
* subject to deduction of tax at source, as applicable.
KEY TERMS
Face Value & Issue Price
Each Bond has a face value of Rs. 10,00,000/- and is issued at par i.e. at Rs. 10,00,000/- per Bond.
Minimum Application
The application should be for a minimum of 1 Bond (Rs. 10,00,000/-) and in multiples of 1 Bond (Rs. 10,00,000/-)
thereafter.
Interest on Application Money
Interest at the respective coupon rate (i.e. @ 7.00% p.a. under Option-I and @ 7.10% p.a. under Option-II) (subject to
deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or reenactment thereof, as applicable) will be paid to all the applicants on the application money for the Bonds. Such interest
shall be paid from the date of realisation of cheque(s)/ demand draft(s) upto one day prior to the Deemed Date of
Allotment. The interest on application money will be computed on an Actual/ 365 day basis. Such interest would be paid
on all the valid applications, including the refunds. Where the entire subscription amount has been refunded, the interest
on application money will be paid along with the Refund Orders. Where an applicant is allotted lesser number of bonds
than applied for, the excess amount paid on application will be refunded to the applicant alongwith the interest on
refunded money.
19
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
The interest cheque(s)/ demand draft(s) for interest on application money (alongwith Refund Orders, in case of refund of
application money, if any) shall be dispatched by the Bank within 15 days from the Deemed Date of Allotment and the
relative interest warrant(s) alongwith the Refund Order(s), as the case may be, will be dispatched by registered post to the
sole/ first applicant, at the sole risk of the applicant.
Interest on the Bonds
The Bonds shall carry interest at the respective coupon rate (i.e. @ 7.00% p.a. under Option-I and @ 7.10% p.a. under
Option-II) (subject to deduction of tax at source at the rates prevailing from time to time under the provisions of the Income
Tax Act, 1961, or any other statutory modification or re-enactment thereof for which a certificate will be issued by the
Bank) on the outstanding amount of the principal till redemption. Interest will be paid annually on March 31, each year
throughout the tenure of the Bonds till final redemption. The first interest payment shall be made on March 31, 2005 and
the last interest payment for the broken period will be made at the time of final redemption of the Bonds on pro-rata basis.
Interest on Bonds will cease on the date of final redemption in all events.
(In case the Deemed Date of Allotment is revised (pre-poned/ postponed) then the above interest payment date may also
be revised (pre-poned/ postponed) accordingly by the Bank at its sole & absolute discretion).
If any interest payment date falls on a day which is not a Business Day (‘Business Day’ being a day on which Commercial
Banks are open for Business in the city of Kochi, Kerala), then payment of interest will be made on the next day that is a
business day but without liability for making payment of interest for the intervening period.
Computation of Interest
Interest for each of the interest periods shall be calculated, on 'actual/ 365 (366 in case of a leap year) days' basis, on the
face value of principal outstanding on the Bonds at the respective coupon rate rounded off to the nearest Rupee.
Deemed Date of Allotment
Interest on the Bonds shall accrue to the Bondholder(s) from March 31, 2004, which shall be the Deemed Date of
Allotment. All benefits relating to the Bonds will be available to the investors from the Deemed Date of Allotment. The
actual allotment of Bonds may take place on a date other than the Deemed Date of Allotment. The Bank reserves the right
to keep multiple allotment date(s)/ deemed date(s) of allotment at its sole and absolute discretion without any notice. In
case if the issue closing date is changed (pre-poned/ postponed), the Deemed Date of Allotment may also be changed
(pre-poned/ postponed) by the Bank at its sole and absolute discretion.
Depository Arrangements
The Bank has appointed “CAMEO Corporate Services Limited” (Address: ‘Subramanian Building’, 5th Floor, No. 1, Club
House Road, Chennai – 600 002, Tel No. (044) 28460390, Fax No. (044) 28460129, E-Mail: cameosys@satyam.net.in)
as Registrars & Transfer Agent for the present bond issue. The Bank has made necessary depository arrangements with
National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for issue and
holding of Bonds in dematerialised form. In this context the Bank has signed two tripartite agreements as under:

Tripartite Agreement dated 31.07.2002 between Lord Krishna Bank, CAMEO Corporate Services Limited and
National Securities Depository Limited (NSDL) for offering depository option to the investors.

Lord Krishna Bank is making arrangements for entering into Tripartite Agreement between the Bank CAMEO
Corporate Services Limited and Central Depository Services (I) Limited (CDSL) for offering depository option to the
investors.
Investors shall hold the bonds only in dematerialised form and deal with the same as per the provisions of Depositories
Act, 1996 as amended from time to time.
Procedure for applying for Demat Facility
1. The applicant must have at least one beneficiary account with any of the Depository Participants (DPs) of NSDL or
CDSL prior to making the application.
2. The applicant must necessarily fill in the details (including the beneficiary account number and Depository
Participant’s ID appearing in the Application Form under the heading ‘Details for Issue of Bonds in Electronic/
Dematerialised Form’.
3. Bonds allotted to an applicant will be credited directly to the applicant’s respective Beneficiary Account(s) with the
DP.
4. For subscribing the bonds, names in the application form should be identical to those appearing in the account
details in the depository. In case of joint holders, the names should necessarily be in the same sequence as they
appear in the account details in the depository.
5. Non-transferable allotment advice/refund orders will be directly sent to the applicant by the Registrars to the Issue.
6. If incomplete/incorrect details are given under the heading ‘Details for Issue of Bonds in Electronic/ Dematerialised
Form’ in the application form, it will be deemed to be an incomplete application and the same may be held liable for
rejection at the sole discretion of the Bank.
7. For allotment of Bonds, the address, nomination details and other details of the applicant as registered with his/her
DP shall be used for all correspondence with the applicant. The Applicant is therefore responsible for the correctness
of his/her demographic details given in the application form vis-à-vis those with his/her DP. In case the information is
incorrect or insufficient, the Issuer would not be liable for losses, if any.
20
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
8. It may be noted that Bonds being issued in electronic form, the same can be traded only on the Stock Exchanges
having electronic connectivity with NSDL or CDSL. The Stock Exchange, Mumbai where the Bonds of the Bank are
proposed to be listed has connectivity with NSDL and CDSL.
9. Interest or other benefits would be paid to those Bondholders whose names appear on the list of beneficial owners
given by the Depositories to the Bank as on Record Date/ Book Closure Date. In case of those Bonds for which the
beneficial owner is not identified by the Depository as on the Record Date/ Book Closure Date, the Bank would keep
in abeyance the payment of interest or other benefits, till such time that the beneficial owner is identified by the
Depository and conveyed to the Bank, whereupon the interest or benefits will be paid to the beneficiaries, as
identified, within a period of 30 days.
Investors may note that pursuant to circular no. SEBI/MRD/SE/AT/36/2003/30/09 dated September 30, 2003 issued
by SEBI, the Bonds of the Bank would be issued and traded only in dematerialised form.
Market Lot
The market lot will be one Bond (“Market Lot”). Since the bonds are being issued only in dematerialised form, the odd lots
will not arise either at the time of issuance or at the time of transfer of bonds.
Letter(s) of Allotment/ Bond Certificate(s)/ Refund Order(s)
Issue of Letter(s) of Allotment
The beneficiary account of the investor(s) with National Securities Depository Limited (NSDL)/ Central Depository
Services (India) Limited (CDSL)/ Depository Participant will be given initial credit within 15 days from the Deemed Date of
Allotment. The initial credit in the account will be akin to the Letter of Allotment. On completion of the all statutory
formalities, such credit in the account will be akin to a Bond Certificate.
Issue of Bond Certificate(s)
Subject to the completion of all legal formalities within 3 months from the Deemed Date of Allotment, or such extended
period as may be approved by the Appropriate Authorities, the initial credit akin to a Letter of Allotment in the Beneficiary
Account of the investor would be replaced with the number of Bonds allotted.
The Bonds since issued in electronic (dematerialized) form, will be governed as per the provisions of The Depository Act,
1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notified by NSDL/
CDSL/ Depository Participant from time to time and other applicable laws and rules notified in respect thereof.
Despatch of Refund Orders
The Bank shall ensure dispatch of Refund Order(s) of value upto Rs. 1,500/- under certificate of posting and Refund
Order(s) of value of over Rs. 1,500/- by Registered Post only and adequate funds for the purpose shall be made available
to the Registrar to the Issue by the Issuer Company.
Terms of Payment
The full face value of the Bonds applied for is to be paid alongwith the Application Form. Investor(s) need to send in the
Application Form and the cheque(s)/ demand draft(s) for the full face value of the Bonds applied for.
Option of Bonds
Option-I
Option-II
Face Value per Bond
Rs. 10,00,000/Rs. 10,00,000/-
Minimum Application for
1 Bond
1 Bond
Amount Payable on Application per Bond
Rs. 10,00,000/Rs. 10,00,000/-
Payment of Interest
The interest will be payable annually to the Bondholder(s) whose names appear in the List of Beneficial Owners given by
the Depository to the Bank on the Record Date. Payment of interest will be made by way of cheque(s)/ interest warrant(s)/
demand draft(s), which will be dispatched to the sole/ first applicant, 7 days before the due date(s) by registered post at
the sole risk of the applicant.
Tax Deduction at Source (TDS)
Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be
deducted at source. For seeking TDS exemption/ lower rate of TDS, relevant certificate(s)/ document(s) must be lodged at
least 15 days before the payment of interest becoming due with the Company Secretary, Lord Krishna Bank Limited,
Registered & Administrative Office, Indian Express Building, Kaloor, Kochi - 682 017 (Kerala), or to such other person(s)
at such other address(es) as the Bank may specify from time to time through suitable communication.
Tax exemption certificate/ declaration of non-deduction of tax at source on interest on application money, should be
submitted along with the Application Form. Where any deduction of Income Tax is made at source, the Bank shall send to
the Bondholder(s) a Certificate of Tax Deduction at Source.
Bondholder(s) should also consult their own tax advisers on the tax implications of the acquisition, ownership and sale of
Bonds, and income arising thereon.
21
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Put & Call Option
Neither Put Option shall be available to the Bondholder(s), nor Call Option would be available to the Bank to redeem the
Bonds prior to maturity. The Bonds are free from restrictive clauses and are not redeemable before maturity at the
instance of the holder or without the consent of the Reserve Bank of India (RBI).
Redemption
The face value of the Bonds will be redeemed at par, at the end of 63 Months (5 Year 3 Months) from the Deemed Date of
Allotment in case of Option-I and at the end of 87 Months (7 Year 3 Months) from the Deemed Date of Allotment in case of
Option-II. However, the bonds shall not be redeemable before maturity at the initiative of the holder or without the consent
of the RBI in terms of the Capital Adequacy Guidelines DBOD No. BP.BC.5/ 21.01.002/ 98-99 dated February 8th, 1999
issued by RBI, as amended.
In case if the principal redemption date falls on a day which is not a Business Day (‘Business Day’ being a day on which
Commercial Banks are open for Business in the city of Kochi, Kerala), then the payment due shall be made on the next
Business Day together with additional interest for the intervening period.
Payment on Redemption
Payment on redemption will be made by cheque(s)/ warrants(s) in the name of the Bondholder whose name appears on
the List of Beneficial owners given by Depository to the Bank as on the Record Date. On the Bank dispatching the
redemption warrants to such Beneficiary(ies) by registered post/ courier, the liability of the Bank shall stand extinguished.
The Bonds shall be taken as discharged on payment of the redemption amount by the Bank on maturity to the list of
Beneficial Owners as provided by NSDL/ CDSL/ Depository Participant. Such payment will be a legal discharge of the
liability of the Bank towards the Bondholders. On such payment being made, the Bank will inform NSDL/ CDSL/
Depository Participant and accordingly the account of the Bondholders with NSDL/ CDSL/ Depository Participant will be
adjusted.
The Bank’s liability to the Bondholders towards all their rights including for payment or otherwise shall cease and stand
extinguished from the due date of redemption in all events. Further the Bank will not be liable to pay any interest or
compensation from the date of redemption. On the Bank dispatching the amount as specified above in respect of the
Bonds, the liability of the Bank shall stand extinguished.
Record Date
The ‘Record Date’ for the Bonds shall be 15 days prior to each interest payment and/ or principal repayment date.
Effect of Holidays
Should any of dates defined above or elsewhere in the Information Memorandum, excepting the Deemed Date of
Allotment, fall on a Saturday, Sunday or a Public Holiday, the next working day shall be considered as the effective
date(s).
Mode of Transfer of Bonds
Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/
Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The
normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these
bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to
his depository participant.
List of Beneficial Owners
The Bank shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall
be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be.
Trustees for the Bondholders
The Bank has appointed The Western India Trustee & Executor Company Limited (WITECO) to act as Trustees for the
Bondholders (“Trustees”).
The Bank and the Trustees will enter into a Trustee Agreement, inter alia, specifying the powers, authorities and
obligations of the Trustees and the Bank. The Bondholder(s) shall, without further act or deed, be deemed to have
irrevocably given their consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds,
matters and things in respect of or relating to the Bonds as the Trustees may in their absolute discretion deem necessary
or require to be done in the interest of the Bondholder(s). Any payment made by the Bank to the Trustees on behalf of the
Bondholder(s) shall discharge the Bank pro tanto to the Bondholder(s). The Trustees will protect the interest of the
Bondholders in the event of default by the Bank in regard to timely payment of interest and repayment of principal and
they will take necessary action at the cost of the Bank. No Bondholder shall be entitled to proceed directly against the
Bank unless the Trustees, having become so bound to proceed, fail to do so.
22
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Right to Accept or Reject Applications
The Board of Directors/ Committee of Directors reserves its full, unqualified and absolute right to accept or reject any
application, in part or in full, without assigning any reason thereof. The rejected applicants will be intimated along with the
refund warrant, if applicable, to be sent. Interest on application money will be paid from the date of realisation of the
cheque(s)/ demand drafts(s) till one day prior to the date of refund. The Application Forms that are not complete in all
respects are liable to be rejected and would not be paid any interest on the application money. Application would be liable
to be rejected on one or more technical grounds, including but not restricted to:
a.
Number of bonds applied for is less than the minimum application size;
b.
Applications exceeding the issue size;
c.
Bank account details not given;
d.
Details for issue of bonds in electronic/ dematerialised form not given;
e.
PAN/GIR and IT Circle/Ward/District not given;
f. In case of applications under Power of Attorney by limited companies, corporate bodies, trusts, etc. relevant
documents not submitted;
g. In the event, if any Bond(s) applied for is/ are not allotted in full, the excess application monies of such Bonds will be
refunded, as may be permitted.
How to Apply
This Information Memorandum is neither a prospectus nor a statement in lieu of prospectus and does not constitute an
offer to the public generally to subscribe for or otherwise acquire the Bonds issued by the Bank. The document is for the
exclusive use of the Institution(s) to whom it is delivered and it should not be circulated or distributed to third parties. The
document would be sent specifically addressed to the institution(s) by the Issuer Bank and/ or its Sole Arranger.
Only eligible investors as given hereinabove may apply for bonds by completing the Application Form in the prescribed
format in BLOCK LETTERS in English as per the instructions contained therein. Applications should be for a minimum of
1 Bond and in multiples of 1 Bond thereafter. Applications not completed in the said manner are liable to be rejected.
Application Form duly completed in all respects must be submitted with any of the designated branches of the Bankers to
the Issue. The name of the applicant’s bank, type of account and account number must be filled in the Application Form.
This is required for the applicant’s own safety and these details will be printed on the refund orders and interest/
redemption warrants.
The applicant or in the case of an application in joint names, each of the applicant, should mention his/her Permanent
Account Number (PAN) allotted under the Income-tax Act, 1961 or where the same has not been allotted, the GIR No.
and the Income tax Circle/Ward/District. As per the provision of Section 139A(5A) of the Income Tax Act, PAN/GIR No.
needs to be mentioned on the TDS certificates. Hence, the investor should mention his PAN/GIR No. it the investor does
not submit Form 15G/15AA/other evidence, as the case may be for non-deduction of tax at source. In case neither the
PAN nor the GIR Number has been allotted, the applicant shall mention “Applied for” and in case the applicant is not
assessed to income tax, the applicant shall mention ‘Not Applicable’ (stating reasons for non applicability) in the
appropriate box provided for the purpose. Application Forms without this information will be considered incomplete and
are liable to be rejected.
Applications may be made in single or joint names (not exceeding three). In the case of joint applications, all payments
will be made out in favour of the first applicant. All communications will be addressed to the first named applicant whose
name appears in the Application Form at the address mentioned therein.
Unless the Issuer Company specifically agrees in writing with or without such terms or conditions it deems fit, a separate
single cheque/ demand draft must accompany each Application Form. Applicants are requested to write their names and
application serial number on the reverse of the instruments by which the payments are made.
All applicants are requested to tick the relevant column “Category of Investor” in the Application Form. Public/ Private/
Religious/ Charitable Trusts and other investors requiring “approved security” status for making investments. Investors are
advised to exercise due caution in selecting the appropriate option for which they wish to apply.
Application Form must be accompanied by either demand draft(s) or cheque(s) drawn or made payable in favour of ‘Lord
Krishna Bank Limited’ and crossed ‘Account Payee Only’. Cheque(s)/ demand draft(s) may be drawn on any bank
including a co-operative bank, which is a member or a sub-member of the Bankers Clearing House located at Chennai,
Bangalore, Hyderabad, Ahmedabad, New Delhi, Mumbai or Kochi.
Investors in centres which do not have any bank, including a co-operative bank, which is a member or sub-member of the
Banker’s Clearing House located at any of the centres mentioned above, will be required to make payments only through
demand drafts payable at any one of the above centres. Cash, outstation cheques, money orders, postal orders and
stockinvest shall not be accepted. The Bank assumes no responsibility for any applications/ cheques/ demand drafts lost
in mail. Detailed instructions for filling up the application form and list of collection centres are provided elsewhere in this
Information Memorandum.
23
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
No separate receipts shall be issued for the application money. However, Bankers to the Issue at their Designated
Branch(es) receiving the duly completed Application Forms will acknowledge the receipt of the applications by stamping
and returning the acknowledgment slip to the applicant. Applications shall be deemed to have been received by the Issuer
Company only when submitted to Bankers to the Issue at their designated branches or on receipt by the Registrar as
detailed above and not otherwise.
For further instructions, please read Application Form carefully.
Who Can Apply
The following categories of investors may apply for the bonds, subject to fulfilling their respective investment norms/ rules
by submitting all the relevant documents along with the application form.
1.
2.
3.
4.
5.
6.
7.
8.
Scheduled Commercial Banks;
Financial Institutions;
Insurance Companies;
Primary/ State/ District/ Central Co-operative Banks (subject to permission from RBI);
Regional Rural Banks;
Mutual Funds;
Companies, Bodies Corporate authorised to invest in bonds;
Trusts, Association of Persons, Societies registered under the applicable laws in India which are duly authorised to
invest in bonds.
Applicants not to be made by
1. Individuals (Resident/ Non-Residents of India, Adult/ Minor);
2. Hindu Undivided Family (neither by the name of the Karta);
3. Partnership Firms or their nominees;
4. Overseas Corporate Bodies (OCBs);
5. Foreign Institutional Investors (FIIs).
Applications under Power of Attorney
A certified true copy of the power of attorney or the relevant authority as the case may be alongwith the names and
specimen signature(s) of all the authorized signatories and the tax exemption certificate/ document, if any, must be lodged
alongwith the submission of the completed Application Form. Further modifications/ additions in the power of attorney or
authority should be notified to the Bank or to its Registrars or to such other person(s) at such other address(es) as may be
specified by the Bank from time to time through a suitable communication.
Application by Mutual Funds
In case of applications by Mutual Funds, a separate application must be made in respect of each scheme of an Indian
Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, provided that the
application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the
scheme for which the application has been made.
Future Borrowings
The Bank shall be entitled to borrow/ raise loans or avail of financial assistance in whatever form as also issue Bonds/
Debentures/ Notes/ other securities in any manner with ranking as pari-passu basis or otherwise and to change its capital
structure, including issue of shares of any class or redemption or reduction of any class of paid up capital, on such terms
and conditions as the Bank may think appropriate, without the consent of, or intimation to, the Bondholder(s) or the
Trustees in this connection.
Bondholder not a Shareholder
The Bondholders will not be entitled to any of the rights and privileges available to the Shareholders.
Rights of Bondholders
1. The Bonds shall not, except as provided in the Companies Act, 1956 confer upon the holders thereof any rights or
privileges available to the members of the Bank including the right to receive Notices or Annual Reports of, or to
attend and/or vote, at the General Meeting of the Bank. However, if any resolution affecting the rights attached to the
Bonds is to be placed before the shareholders, the said resolution will first be placed before the concerned registered
Bondholders for their consideration. In terms of Section 219(2) of the Act, holders of Bonds shall be entitled to a copy
of the Balance Sheet on a specific request made to the Bank.
2. The rights, privileges and conditions attached to the Bonds may be varied, modified and/or abrogated with the
consent in writing of the holders of at least three-fourths of the outstanding amount of the Bonds or with the sanction
of Special Resolution passed at a meeting of the concerned Bondholders, provided that nothing in such consent or
resolution shall be operative against the Bank, where such consent or resolution modifies or varies the terms and
conditions governing the Bonds, if the same are not acceptable to the Bank.
24
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
3.
4.
5.
6.
7.
8.
The registered Bondholder or in case of joint-holders, the one whose name stands first in the Register of
Bondholders shall be entitled to vote in respect of such Bonds, either in person or by proxy, at any meeting of the
concerned Bondholders and every such holder shall be entitled to one vote on a show of hands and on a poll, his/her
voting rights shall be in proportion to the outstanding nominal value of Bonds held by him/her on every resolution
placed before such meeting of the Bondholders.
The quorum for such meetings shall be at least five Bondholders present in person.
The Bonds are subject to the provisions of the Companies Act, 1956, the Memorandum and Articles, the terms of this
prospectus and Application Form. Over and above such terms and conditions, the Bonds shall also be subject to
other terms and conditions as may be incorporated in the Trustee Agreement/ Letters of Allotment/ Bond Certificates,
guidelines, notifications and regulations relating to the issue of capital and listing of securities issued from time to
time by the Government of India and/or other authorities and other documents that may be executed in respect of the
Bonds.
Save as otherwise provided in this Information Memorandum, the provisions contained in Annexure C and/ or
Annexure D to the Companies (Central Government’s) General Rules and Forms, 1956 as prevailing and to the
extent applicable, will apply to any meeting of the Bondholders, in relation to matters not otherwise provided for in
terms of the Issue of the Bonds.
A register of Bondholders will be maintained in accordance with Section 152 of the Act and all interest and principal
sums becoming due and payable in respect of the Bonds will be paid to the registered holder thereof for the time
being or in the case of joint-holders, to the person whose name stands first in the Register of Bondholders.
The Bondholders will be entitled to their Bonds free from equities and/or cross claims by the Bank against the original
or any intermediate holders thereof.
Succession
In the event of winding-up of the holder of the Bond(s), the Bank will recognize the executor or administrator of the
concerned Bondholder(s), or the other legal representative as having title to the Bond(s). The Bank shall not be bound to
recognize such executor or administrator or other legal representative as having title to the Bond(s), unless such executor
or administrator obtains probate or letter of administration or other legal representation, as the case may be, from a Court
in India having jurisdiction over the matter.
The Bank may, in their absolute discretion, where they think fit, dispense with production of probate or letter of
administration or other legal representation, in order to recognize such holder as being entitled to the Bond(s) standing in
the name of the concerned Bondholder on production of sufficient documentary proof or indemnity.
Notices
All notices to the Bondholder(s) required to be given by the Bank or the Trustees shall be published in one English and
one regional language daily newspaper in Mumbai, New Delhi, Chennai, Kolkatta and Kochi and/ or, will be sent by post/
courier to the sole/ first allottee or sole/ first Beneficial Owner of the Bonds, as the case may be from time to time.
All notice(s) to be given by the Bondholder(s) shall be sent by registered post or by hand delivery to the Bank or to such
persons at such address as may be notified by the Bank from time to time through suitable communication.
Joint-Holders
Where two or more persons are holders of any Bond(s), they shall be deemed to hold the same as joint tenants with
benefits of survivorship subject to other provisions contained in the Articles.
Sharing of Information
The Bank may, at its option, use on its own, as well as exchange, share or part with any financial or other information
about the Bondholders available with the Bank, with its subsidiaries and affiliates and other banks, financial institutions,
credit bureaus, agencies, statutory bodies, as may be required and neither the Bank or its subsidiaries and affiliates nor
their agents shall be liable for use of the aforesaid information.
Debenture/ Bond Redemption Reserve
The Government of India, Ministry of Company Affairs has vide General Circular No. 9/2002 No.6/3/2001-CL.V dated April
18, 2002 clarified that banks need not create Debenture Redemption Reserve as specified under section 117C of the
Companies Act, 1956.
Undertaking by the Issuer
The Issuer company undertakes that:
a) the complaints received in respect of the Issue shall be attended to by the issuer company expeditiously and
satisfactorily;
b) it shall take all steps for completion of formalities for listing and commencement of trading at all the concerned stock
exchange(s) where securities are to be listed and taken within 7 working days of the deemed date of allotment.
c) the funds required for despatch of refund orders by registered post shall be made available to the Registrar to the
Issue by the Issuer Company;
d) no further issue of securities shall be made till the securities offered through this offer document are listed or till the
application moneys are refunded on account of non-listing, under-subscription, etc;
e) necessary co-operation to the credit rating agency(ies) shall be extended in providing true and adequate information
till the debt obligations in respect of the instrument are outstanding.
25
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
IV.
PARTICULARS OF THE ISSUE
OBJECTS OF THE ISSUE
The present issue of bonds is being made for augmenting the Tier-II Capital of the Bank for strengthening its Capital Adequacy
and for enhancing the long-term resources of the Bank. The expenses of the present issue would also be met from the
proceeds of the Issue. The Main Object Clause of the Memorandum of Association of the Bank enables it to undertake the
activities for which the funds are being raised through the present issue and also the activities which the Bank has been
carrying on till date. The proceeds of this Issue after meeting all expenses of the Issue will be used by the Bank for its regular
business activities.
Capital Adequacy Position of the Bank
The Capital Adequacy Ratio (“CAR”) of the Bank as on March 31, 2003 and September 30, 2003 was 14.06% and 16.04%
respectively as against the RBI stipulation of 9.00%. Details of capital vis-à-vis risk weighted assets are as under:
(Rs. in crores)
As on
March 31,
March 31,
March 31,
March 31,
March 31,
Sept 30,
1999
2000
2001
2002
2003
2003
Capital Funds
Tier I Capital
Paid up Equity Capital
19.47
23.47
26.86
56.69
56.69
56.69
Less Investment in Subsidiary
------Reserves & Surplus
20.39
26.78
31.55
45.47
51.59
61.85
Total Tier I Capital
39.86
50.25
58.41
102.16
108.28
118.54
Tier II Capital
Revaluation Reserve
------General Provisions
---1.86
2.07
2.14
Subordinated Debt
12.00
8.01
29.20
21.94
17.07
14.63
Investment Fluctuation Reserve
---6.30
11.00
12.99
Total Tier II Capital
12.00
8.01
29.20
30.10
30.14
29.76
Total Capital Fund
51.86
58.26
87.61
132.26
138.42
148.30
Risk Weighted Assets
437.47
517.87
675.56
783.81
984.72
924.41
Capital Adequacy Ratio (%)
11.85
11.25
12.90
16.50
12.82
16.04
Requirement of Enhancement of Capital
The Bank expects to post a growth in business in the years to come. As a result, Risk weighted assets of the Bank are also
expected to increase over the years. Increase in Tier I capital through retained earnings alone may not be sufficient to enable
the Bank to maintain an adequate capital adequacy ratio. In view of the likely expansion of loan assets, the Bank proposes to
augment its capital base in order to sustain a healthy CAR.
The Bank came out with a public/ rights issue of equity shares in 2001-02, details of which are given elsewhere in the
Information Memorandum. The Bank has also raised Tier II Capital by way of Private Placement of unsecured, redeemable
bonds in the nature of Promissory Notes/ Debentures to augment capital adequacy as under:
Issue
Year of
Series Placement
I
II
III
1997
2000
2001
Deemed
Date of
Allotment
31/05/97
29/07/00
30/06/01
Issue Amount
(Rs. in crores)
Tenure
(in months)
Credit
Rating
20.00
12.20
12.18
60
87
60
Unrated
Unrated
Unrated
Coupon Rate
(% p.a.,
annually)
16.50%
13.00%
12.50%
Redemption
Date
Remarks
31/05/02
29/10/07
30/06/06
Redeemed
---
26
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
V.
BANK & MANAGEMENT
HISTORY & BACKGROUND OF THE BANK
Lord Krishna Bank Ltd. (LKB) was born in a very humble way in the year 1940 in a quaint little hamlet called Kodungalloor
in Trichur District of Kerala to serve the people of the region with honesty, commitment an dynamism. LKB's first
expansion move started in 1960's with the merger of 3 banks with LKB. The year 1992 however, proved to be a real
turning point for the LKB when its management was taken over by the reputed PAIS' erstwhile Promoters of Syndicate
Bank and Puri Group of North India.
Today, while the bank continues to retain its trademark values of personalised customer care has grown exponentially in
size and scope, from a local to a National Player; from the traditionally peoples driven entity to redefining the relationship
banking with an ideal partnership of man and machine.
The overwhelming success of the two Rights Issue and the plough back of surplus generated has seen the Networth of
the Bank to rise from Rs. 39.85 crores as at 31.3.1999 to Rs. 108.78 crores as at 31/03/03. The increased Networth will
enable the Bank to aggressively pursue Corporate Accounts and PSU business.
The Bank as of now has 101 Branches 7 Extension Counters and 28 ATMs spread over 11 states. The Bank as on hand
RBI permission for opening 13 more branches in major cities across the country.
The Bank's 90% operations are computerised. The Bank is switching over to Core Banking Solutions (CBS) so as to
provide anywhere anytime banking which will help the bank in bringing New products to its basket to offer in addition to
value enhancement to Customer Service & Customer CARE.
MAIN OBJECTS OF THE BANK
The main objects of the Bank as contained in the Memorandum of Association are:
a) To establish and carry on business of banking at the registered office of the company and at such branches,
agencies or offices in the state of Kerala, and any other part of India or elsewhere, as may from time to time be
determined by the Directors of the company.
b) Carrying on the business of accepting for the purpose of lending or investment of deposits of money, repayable on
demand or otherwise, and withdrawals by cheque, draft, or otherwise to carry on the business of banking in all its
branches and departments.
c) The borrowing, raising or taking up of money; the lending or advancing of money whether upon without security, the
drawing, making, accepting , discounting, buying, selling, collecting and dealing in bills of exchange, hundies,
promissory notes, coupons drafts, bills of lading, railway receipts, warrants, debentures, certificates, scrips and other
instruments, and securities whether transferable or negotiable or not; the granting and issuing of letters of credit ,
traveller;s cheques and ciruclar notes; the buying, selling and dealing in bullion and specie; the buying and selling
foreign exchange including foreign bank notes, the acquiring, holding, issuing on commission, underwriting and
dealing in stock, funds, shares, debentures, debenture stock, bonds, obligations, securities and investments of all
kinds; the purchasing and selling of bonds, scrips or other form of securities on behalf of constituents or others; the
negotiating of loans and advances; the receiving of all kinds of bonds, scrips or valuables for deposits or for safe
custody or otherwise; the collecting and transmitting of money and securities.
d) Acting as agents for any Government or local authority or any other person or persons; the carrying on of agency
business of any description including the clearing and forwarding of goods, giving of receipts and discharges and
otherwise acting as attorney on behalf of customers but excluding the business of managing agent of a company.
e) Contracting for public and private loans and negotiating and issuing the same;
f)
The promoting, effecting, insuring, guaranteeing, underwriting, participating in managing and carrying out of any
issue, public or private, of state, municipal or other loans or of shares, stock, debentures or debenture stock of any
company corporation or association and lending of money for the purpose of any such issue.
g) Carrying on and transacting every kind of guarantee and indemnity business.
h) Managing, selling and realising all property movable and immovable which may come into the possession of the
company in satisfaction or part satisfaction of any of its claims;
i)
Acquiring and holding and generally dealing with any property and any right title or interest in any property movable
or immovable which may for part of the security for loans or advance or which may be connected with any security.
j)
undertaking and executing trust.
k) undertaking the administration of estates as executor, trustees or otherwise;
l)
Establishing and supporting or aiding in the establishment and support of association, institutions, funds, trusts and
conveniences calculated to benefit employees or ex-employees of the company or the dependents or connections of
such persons; and granting pensions and allowances and making payments towards insurance, subscribing to or
guaranteeing moneys for charitable or benevolent objects or for any exhibition or for any public , general or useful
object;
m) The acquisition, construction, maintenance and alteration of any building or works necessary or convenient for the
purpose of the company.
n) Selling, improving, managing, developing, exchanging, leasing, mortgaging, disposing of or turning into account or
otherwise dealing with all or any part of the property and rights of the company.
27
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
o)
p)
q)
r)
s)
t)
u)
v)
Acquiring and undertaking the whole or any part of the business, property and liabilities of any person or company,
carrying on or proposing to carry on any business which this company is authorized to carry on or possession of
property suitable for the purposes of this company or which can be carried on in conjunction therewith or which is
capable of being conducted so as directly to benefit this company:
To establish, float, promote or setup one or more subsidiary companies of the Bank for the purpose of carrying on
the business of leasing, hire purchase, merchant banking, factoring, executor and trusteeship, stock broking,
portfolio management, managing issues, acting as Registrars to issue and transfer agents, housing finance or
undertaking such other business as can be carried on in unison with one or more objects of the Bank, which is
permissible under Section 6 of the Banking Regulation Act, 1949.
To open, establish, maintain and operate currency chests and small coin depots on such terms and conditions as
may required by the Reserve Bank of India established under the Reserve Bank of India Act, 1934 and enter into all
administrative or other arrangements for undertaking such functions with Reserve Bank of India.
To act as custodians, depositories and to provide custodial services to individuals, firms and bodies corporate
subject to such statutory provisions that may be applicable.
To carry on, sponsor or arranger in the business of providing consultancy and technical services related to various
types of business or activity and more particularly by way of market survey, preparation of feasibility and project
report and to enter into any agreement or arrangement for licensing, chartering, brokerage, technical business or
financial collaborations with any other party or concern for singular or mutual benefit or for the intake or outflow of
knowhow, whether existing or newly developed including any rights or special methods or trade secrets.
To undertake and carry on any advisory consultation or similar work.
Doing all such other things as are incidental or conducive to the promotion or advancement of the business of the
company; carrying on or undertaking any other form of business which the Central Government may by notification in
the Official Gazetter, specify as a form of business which is lawful for a banking company to engage.
To undertake, engage in and carry on any insurance business without any risk participation by or contingent liability
for the banking business; by acting as agent of insurance company/ companies on fee basis for distribution of
insurance products, and/ or by investing in the equity of insurance company/ companies for providing infrastructure
and services support and / or by equity participation in one or more joint venture with or without risk participation,
and/ or in any other manner as may be permitted by the Reserve Bank of India.
CORPORATE PHILOSOPHY
Vision:
“To become a strong, healthy, efficient and technology – driven modern bank with all – India presence and get reckoned
as an important national financial institution”.
Mission:
“ keeping the customer as the central focus, Lord Krishna Bank is committed to provide excellence in banking services
through well – matched mix of trained professionals and state-of-the-art technology.
– To follow the strategy of speedy and aggressive branch network expansion throughout India, to be a truly National
Bank.
– To offer a technology driven, well diversified range of services to cater to both the retail segments as well as large and
medium-sized corporates.
– To attract and retain high quality banking professionals by creating a work environment which is dynamic and which
empowers and motivates staff to achieve the highest degree of efficiency, whilst maintaining the highest level of banking
ethics.”
BUSINESS OF THE BANK & ITS PRODUCTS AND SERVICES
The bank offers various type of the products for its customers in the form of Loans & Advances; Deposits and other
services. The Loans & Advances include the following:
I Wholesale Banking Products & Services












Coporate Loans
Working Capital Finance
Cash Credit Facilities
Overdraft Facilites
Commercal Paper
Bill Discounting
Short Term Loans
Export Credit::Pre-shipment and Post-shipment
Import Credit
Forward Contracts
Term Loans/ Term Credits
Project Financing
28
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.







Infrastructure Finance
Manufacturing Sector Finance
Directed Lending
Priority Sector Lending
Fee & Commission Based Products
Documentary Credits
Guarantees
II. Retail Loan Products












Housing loan scheme
Personal loan scheme
Education loan scheme
Gold loan scheme(Agriculturist)
Gold loan scheme(Commercial)
Easyloan scheme(against post office, Govt. Securities etc.)
Classic Car loan scheme.
Vehicle loan scheme
Consumer loan scheme
Rent securitisation scheme
Loan to professionals/doctors
Trade loan scheme
III Deposits Scheme










Saving Bank Account
Current Account
Fixed Deposit scheme
Recurring Deposit scheme
Abhivridhi Deposit Scheme(Cumulative Deposit Scheme)
LKB Cash Certificate
LKB Flexi Deposit scheme
Non-Resident (External)Account (NRE)
Ordinary Non-Resident Account (NRO)
FCNR (Bank) Scheme
IV. Misc. Services







Locker & Safe custody
Bills collection
ATM facility
NRI funds remittance arrangement/services
DD issue & DD drawing arrangements
Cross selling of insurance products both Life and Non-Life and Mutual funds
Forex collection services.
V. Composite Corporate Agency
The Bank has tied up with ICICI Prudential Ltd. and Bajaj Allianz Ltd. for marketing, sale and distribution of Life/ Non-Life
products respectively.
BRANCH NETWORK OF THE BANK
The bank has 3 regional offices, controlling 101 branches and 7 extension counters as on September 30, 2003.
DISTRIBUTION OF BRANCH NETWORK
The population group wise break up of branches In India is as follows:
Population Group
Number of Branches
Rural
29
Semi-Urban
31
Urban
21
Metropolitan
20
Total
101
% share to Total (%)
29.00
30.00
21.00
20.00
100.00
29
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Geographical Distribution of Branches is as under:
State/ Union Territory
Number of Branches
Andhra Pradesh
2
Delhi
7
Gujarat
1
Haryana
2
Karnataka
6
Kerala
69
Maharashtra
5
Punjab
2
Rajasthan
1
Tamilnadu
5
Uttar Pradesh
1
TOTAL
101
% share of Total (%)
2
7
1
2
6
68
5
2
1
5
1
100
DETAILS OF SOURCES OF FUNDS
DEPOSITS (Global)
As on
Deposits (Global)
Annual Growth – Amount
Annual Growth – Percent
Cost of Deposits (Global) (%)
March 31,
1999
667.77
-5.03
-0.75
11.89%
March 31,
2000
882.00
214.23
32.08
10.93%
March 31,
2001
1227.23
345.22
39.18
10.28%
March 31,
2002
1502.38
275.15
22.42
9.89%
March 31,
2003
1663.29
160.91
10.71
8.85%
(Rs. in crores)
Sept. 30,
2003
1790.28
126.99
7.63
7.74%
Total global deposits of the Bank as on September 30, 2003, touched a level of Rs. 1790.28 crore. The same was Rs.
1663.29- crore on March 31, 2003 adding Rs.126.99 crore. The deposits as on March 31, 2003 have grown at a rate of
10.71% compared to March 31, 2002. The Bank had a base of around 3 lakh depositors as on September 30, 2003,
resulting in an average deposit size of Rs. 58361 per depositor. The deposits per branch as on September 30, 2003 stood
at Rs.18.27 crore. The share of low-cost deposits (Current Account and Savings bank accounts) in total deposits was
10.83% as on September 30, 2003.
Improved customer services have resulted in increase in the share of low cost deposits in the overall deposit mix.
Mobilisation of low cost resources remained at the focus of attention of the Bank. Cost of Deposits declined to 8.85%
during 2002-03 from 9.89% during 2001-02. The Bank has developed a wide retail base catering to the needs of the
common depositor. This is reflected in the large depositor base of the Bank.
The category-wise break-up of total Global deposits during last 5 years is presented below:
As on
March 31,
March 31,
March 31,
March 31,
1999
2000
2001
2002
Current Deposits
45.43
63.47
63.73
82.56
Savings Bank Deposits
59.58
76.42
89.45
99.79
Term Deposits
562.76
742.11
1074.05
1320.03
Total
667.77
882.00
1227.23
1502.38
(Rs. in crores)
March 31, Sept. 30, 2003
2003
87.11
75.24
110.32
118.62
1465.86
1596.42
1663.29
1790.28
The category-wise break-up of average cost of deposits during last 5 years is presented below:
Year/ Period ended
March 31,
March 31,
March 31,
March 31,
1999
2000
2001
2002
Current Deposits
----Savings Bank Deposits
4.00
3.98
4.00
3.50
Term Deposits
7.89
6.95
6.28
6.39
Total
11.89%
10.93
10.28
9.89
(in %)
March 31, Sept. 30, 2003
2003
--
--
3.52
5.33
8.85
3.53
4.21
7.74
Distribution of Deposits
The share of rural & semi-urban branches of the Bank is 59%. The Bank is focusing in rural and semi-urban areas for
retail finance. The population group-wise break-up of aggregate Domestic deposits for the last five years is as given in the
table below:
(in %)
As on
March 31,
March 31,
March 31,
March 31,
March 31,
Sept. 30, 2003
1999
2000
2001
2002
2003
Rural
111.49
145.07
193.88
209.54
194.30
199.74
Semi-Urban
263.84
322.99
366.62
365.86
336.00
346.16
Urban
232.46
311.86
450.42
626.61
613.46
688.14
Metropolitan
59.98
102.06
216.31
300.37
519.53
556.24
Total
667.77
882.00
1227.23
1502.38
1663.29
1790.28
30
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Region-wise distribution of deposits (In India)
The region-wise distribution of deposits (In India) as a percentage of aggregate Domestic deposits of the Bank is given
below:
(in %)
Region
As on
As on
As on
As on
As on
As on Sept.
March 31,
March 31,
March 31,
March 31,
March 31,
30, 2003
1999
2000
2001
2002
2003
Northern
259.47
333.45
420.86
408.54
352.00
357.55
Central (DELHI)
60.71
105.09
240.53
355.81
623.84
709.69
Southern
347.59
443.46
565.84
738.03
687.35
723.04
Total
667.77
882.00
1227.23
1502.38
1663.29
1790.28
The above classification is based on the classification of branches into three Regions by the Bank.
BORROWINGS
As on September 30, 2003, the borrowings of Bank the are as follows:
Particulars of Borrowings from
Institutions & Agencies
Unsecured Redeemable Bonds
(Rs. in crores)
Amount
0.74
24.38
The unsecured redeemable bonds (Tier II bonds) of Rs. 24.38 crores are included under Other Liabilities and Provisions
in the Balance Sheet as per the guidelines of the Reserve Bank of India.
Issue
Year of Deemed Date of Issue Amount
Tenure
Credit Rating Coupon Rate (%
Redemption
Series
Placement
Allotment (Rs. in crores)
(in months)
p.a., annually)
Date
II
2000
29/07/00
12.20
87
Unrated
13.00%
29/10/07
III
2001
30/06/01
12.18
60
Unrated
12.50%
30/06/06
Details of Top 25 Borrowings (including Deposits) of the Bank as on September 19, 2003 (Last Reporting Friday)
Sr.
Party/ Name of the Lender
Form of
Amount
Interest Rate (%)
Maturity Date
No.
Borrowing
(Rs. in crores)
1.
Kerala State Co -operative Agricultural and
Deposit
Rural Development Bank Ltd
236.52
8.00
01/10/03
2.
NABARD
Deposit
50.00
7.10
07/11/03
3.
LIC Mutual Fund
Deposit
45.00
7.00
13/02/04
4.
NHB
Deposit
30.03
7.00
31/03/04
5.
Airport Authority of India
Deposit
22.00
7.55
12/12/04
6.
United Western Bank
Deposit
20.00
6.50
22/11/03
7.
Central Bank of India
Deposit
20.00
5.78
28/11/03
8.
Travancore Devasom Board
Deposit
17.81
11.00
07/02/04
9.
Agriculture . Product market Comm.
Deposit
16.44
9.85
20/03/04
10.
IDBI
Deposit
15.00
6.00
29/09/03
11.
ECGC
Deposit
15.00
6.00
25/09/03
12.
KTWWFB
Deposit
10.68
10.50
14/06/04
13.
Oriental Bank of Commerce
Deposit
10.00
6.00
23/10/03
14.
UCO Bank
Deposit
10.00
5.50
01/11/03
15.
Dena Bank
Deposit
10.00
5.80
19/12/03
16.
Container corporation of India
Deposit
10.00
7.25
15/09/04
17.
Mohan Exports
Deposit
9.46
6.25
17/11/03
18.
KAWWFB
Deposit
8.55
12.00
16/09/04
19.
Guruvayoor Devasom
Deposit
7.65
19/01/04
20.
Y.P. Chabbra
Deposit
6.06
10.40
04/03/05
21.
Swami Bhramanad saraswathi ch.tst
Deposit
6.05
9.25
28/12/03
22.
Federal Bank
Deposit
5.00
6.50
04/08/04
23.
J & K Bank
Deposit
5.00
5.60
17/12/03
24.
Catholic Syrian Bank
Deposit
5.00
6.25
20/10/03
25.
Hotline CPT
Deposit
4.95
9.50
22/03/05
All the above borrowings are unsecured. No directors have given any personal guarantee for collaterally securing the
borrowings. None of the lenders is an affiliate/associate of the Bank. The Bank has not defaulted in repayment/
redemption of any of the borrowings or rolled over any of its borrowings. The Bank has been servicing all its principal and
interest liabilities on time and there have been no defaults since inception. No consents are required from the
lenders/trustees for issue of capital, creation of further charge and/or making additional borrowings. The lenders/ trustees
have not nominated any directors in the Board of Directors of the Bank. RBI’s nominee director is on the Board of the
Bank, the details of which are shown under the section “Board of Directors”.
31
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Fixed and Floating Rate Liabilities of the Bank
The break-up of fixed and floating rate liabilities of the Bank as on September 30, 2003 is furnished in the following table:
(Rs. in crores)
Fixed Rate Liabilities
Fixed Deposits
1596.42
Tier II Bonds
24.38
Other Unsecured Borrowings
0.74
Floating Rate Liabilities
Balance in Savings Bank Account
118.62
The amount of Tier II Bonds and the Subordinated Debt in the table above are shown under Other Liabilities and
Provisions in the Balance Sheet against Subordinated Debt. The fixed and floating rate liabilities of the Bank represent
only the interest bearing liabilities. For non-interest bearing liabilities, please refer to the Balance Sheet.
DETAILS OF DEPLOYMENT OF FUNDS
DETAILS OF ADVANCES
Growth of Advances
The growth of the Bank’s Gross advances during the past five years, is as follows:
Year/ Period ended
March 31,
March 31,
March 31,
1999
2000
2001
Gross Credit
380.95
504.60
613.38
Annual Increase (%)
---32.46%
17.73%
March 31,
2002
849.50
38.49%
Population group wise classification of Gross Advances
The population group-wise classification of the Bank’s Gross Advances is as under:
As on
March 31,
March 31,
March 31,
March 31,
1999
2000
2001
2002
Rural
39.27
42.61
43.14
43.96
Semi-Urban
114.81
127.03
114.33
109.33
Urban
132.78
146.84
185.43
234.24
Metropolitan
94.09
188.12
270.48
461.97
TOTAL
380.95
504.60
613.38
849.50
(Rs. in crores)
March 31,
Sept. 30,
2003
2003
941.47
740.23
10.83%
-21.38%
(Rs. in crores)
March 31,
Sept. 30,
2003
2003
43.28
42.06
81.69
66.26
234.99
230.06
581.51
401.85
941.47
740.23
Region wise Credit Exposure
The region wise credit exposure of the Bank’s Gross Credit portfolio as on September 30, 2003 is given below. (Rs. in crores)
Region
Amount
% of gross credit
North
80.82
10.92
South
150.06
23.33
Central (Delhi)
486.73
65.75
Total
717.61
100.00
Sector wise Credit Portfolio (Domestic)
The sector-wise credit portfolio of the Bank (In India) as on last reporting Friday of September 2003 is as under: (Rs. in crores)
Sr. No. Industry
Amount
Exposure to gross bank credit (%)
Gross Bank Credit
740.23
100.00
1
Food Credit
------2
Non Food Credit:
------2a
Medium & Large Scale Industry
93.06
12.57
2b
Wholesale Trade
29.55
26.01
2c
Priority Sector
113.59
15.35
2d
Other Sectors incl. Export Credit
504.03
68.09
Industry-wise Classification
The Bank has a diversified industry-wise portfolio since adherence to exposure limits is followed. The industry-wise breakup of credit portfolio is furnished below:
Industry
Exposure as a % of gross credit
DOMESTIC
Medium and Large scale
12.57
Whole sale trade
3.99
Oth0er sectors including Priority, Export
83.44
Total
100.00
32
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Industry-wise Deployment of Gross Bank Credit as on September 30, 2003
Industry
Total Outstanding
Total Outstanding of
(Rs. in crores) the top 10 companies
Iron & Steel
Other Metal & Metal Products
All Engineering including Electronics
Textiles (Cotton, Jute)
Sugar, Tea, Food Processing & Vegetable Oil
Tobacco & Tobacco Products
Paper & Paper Products
Rubber & Leather
Chemical, Dyes, Paints, Drugs & Pharma
Fertilizers and Petrochemicals
Cement
Construction
Automobiles (including Trucks)
Others
Total Industrial Credit outstanding
2.07
38.35
63.82
36.73
43.78
0.08
18.39
1.85
---32.70
43.90
31.35
28.96
---15.10
----
(Rs. in crores)
Total Outstanding of the top
10 companies as a
percentage of the total
exposure to the industry
---85.27
68.79
85.35
66.15
---82.11
----
53.22
0.11
12.08
25.73
22.93
319.14
45.13
---11.32
23.03
6.71
238.20
84.80
---93.71
89.51
29.26
74.64
The top 25 borrowers of the Bank have the following industry-wise classification in respect of advances of the
Bank as on September 30, 2003
(Rs. in crores)
Industry
Outstanding to the
% exposure to the
Outstanding to the top 10
Industry gross Industrial Credit
borrowers as a % of total
of the Bank
outstanding to the industry
Iron & Steel
2.07
0.28
---Other Metal
38.35
5.18
4.42
All Engineering
63.82
8.62
5.93
Textiles
36.73
4.96
4.24
Sugar Tea etc.
43.78
5.91
3.91
Tobacco
0.08
0.01
---Paper
18.39
2.48
2.04
Rubber
1.85
0.25
---Chemicals
53.22
7.19
6.10
Cement
0.11
0.01
---Construction/Real Est. /Contractors
38.20
5.16
25.26
Automobiles
25.73
3.48
3.11
Other industries
22.93
3.10
0.91
Total
345.26
46.63
55.92
Exposure to top ten companies of the portfolio
Company Account
Industry
Account – 1
Account – 2
Account – 3
Account – 4
Account – 5
Account – 6
Account – 7
Account – 8
Account – 9
Account – 10
Hotel Industry
Vehicles & Parts
Mfrs. Of Special Pipes
Paper Products
Greater Noida Development Auth
Food Processing Centre
Petro Products
Concrete Pipes
Hospital Industry
Housing
Exposure to top five business groups
Business Group
Group – 1
Group – 2
Group – 3
Group – 4
Group - 5
Total
Outstanding
(Rs. in crore)
16.42
15.16
15.16
15.11
15.05
11.50
10.10
10.10
10.09
9.00
Outstanding Amount (Rs. in crores)
35.36
25.63
20.33
19.58
16.42
117.32
% of gross
advances
2.22
2.05
2.05
2.04
2.03
1.56
1.36
1.36
1.36
1.22
Asset Quality
Standard
Standard
Standard
Standard
Standard
Standard
Standard
Standard
Standard
Standard
% of Gross Advances
4.78
3.46
2.77
2.65
2.22
15.85
33
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Average Balances and Interest Rates
The following table shows Average balances and Interest Rates of interest earning assets and interest bearing liabilities
for the last three financial years:
Year/ Period Ended
March 31 2001
March 31 2002
March 31 2003
September 30, 2003
Average Interest Average Average Interest Average
Balance
Rate Balance
Rate
Average Interest
earning assets
Average Interest
bearing liabilities
Average Interest Average
Balance
Rate
Average
Balance
Interest
Average
Rate
925.45 123.44
13.34 1285.26 144.13
11.21 1740.04 155.52
8.69
2086.9
75.71
7.26
945.25 103.15
10.91 1253.58 130.87
10.44 1408.74 129.18
9.17 1614.89
64.43
7.48
Disbursements of Loans and Advances
The following table provides a summary of the total disbursements for the last four years:
(Rs. in crores)
Year/ Period ended
March 31, 2001
March 31, 2002
March 31, 2003
Sept. 30, 2003
Disbursed
246.56
565.6
631.91
185.91
Category-wise summary of Loans & Advances Disbursements on the basis of financing activity of the Bank: (Rs. in crores)
Year/ Period ended
March 31, 2001
March 31, 2002
March 31, 2003
Sept. 30, 2003
Sector
Disbursement
Disbursement
Disbursement
Disbursement
Agriculture
0.94
1.25
3.62
2.28
SSI
9.20
13.27
8.72
6.94
Other Priority Sector
8.18
23.70
23.06
7.97
Total Priority Sector
18.32
38.22
35.40
17.19
Industry (M&L)
9.29
14.90
66.92
6.61
Whole Sale Trade
4.09
4.04
1.38
4.75
Other Sectors
178.03
381.88
441.92
117.73
Grand Total
228.05
477.26
581.02
163.47
Export Credit
The export credit as at the end of September 30, 2003 was Rs. 24.55 crores. The bank, in order to improve the export
credit has reduced the interest rate on Pre-shipment and Post shipment credit.
Year/ Period ended
March 31, 2001
March 31, 2002
March 31, 2003
Sept. 30, 2003
Achieved (Rs in crores)
5.91
11.05
23.58
24.55
% of Export Credit to Net Credit
1.28
1.67
2.76
3.47
Priority Sector Lending
As per RBI norms, the Private Sector Banks’ credit to the Priority Sector should be 40% of the Net Bank Credit and that
for agriculture should be 18% of the Net Bank Credit. The policy of the Bank with regard to financing to the Priority Sector
is based upon the norms stipulated by Reserve Bank of India. As on September 30, 2003, the Priority Sector credit stood
at 35.40% of the Net Bank Credit and Agricultural credit stood at 13.13% of the Net Bank Credit.
The Bank has disbursed Rs 2.28 crores to agricultural sector an increase of 10% over the previous year. During the year
01.04.03 to 31.07.03 17 Kisan credit cards were issued and cumulatively the Bank so far issued 109 Kisan Credit cards.
Credit linking of Self Help Groups is another thrust area of the Bank’s rural lending. During the year 2 self-help groups
were credit linked and as at the end of September 2003.
The banks advances under direct and Indirect Housing finance amounted Rs. 2.55 crores as against the RBI Norms of
Rs.3.71 crores. Specialized Housing finance divisions functioning in NIL select branches across the country gave a fillip to
our bank's credit flow to housing sector.
In tune with the national agenda of Education to ALL, the Bank has so far disbursed loans amounting Rs. 1.61 crores
benefiting 106 students, under our Educational Loan scheme.
Details of Sector-wise distribution of Gross Priority Sector Advances for the last five years are given below
(Rs. in crores)
Year/ Period ended
March 31,
March 31,
March 31,
March 31,
March 31,
Sept. 30,
1999
2000
2001
2002
2003
2003
Agriculture
8.24
8.03
58.45
49.74
84.05
85.78
Small Scale Industry
62.52
62.71
64.17
64.71
54.52
54.47
Other Priority Sector Advances
25.44
26.37
30.49
51.36
106.08
51.05
Gross Priority Sector Advances
96.20
97.11
153.11
165.81
244.65
191.30
% to Net Bank Credit
33.10
25.02
28.65
35.40
Targets (%)
40%
40%
40%
40%
40%
40%
Gross Bank Credit represents Gross Advances of the Bank. Net Bank Credit is arrived at after deducting FCNR(B) and
NRNR deposits as these are eligible for deductions while calculating the Net Bank Credit for the purpose of priority sector
34
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
advances in line with RBI Circular No. RPCD.BC.147/11.01.01/95-95 dated April 21, 1995. The calculation of Net
Domestic Bank Credit is shown below:
As on 31.03.03 (Rs. in crores)
Gross Domestic Bank Credit
941.47
Less: NRNR Deposits
79.86
Less: FCNR Deposits
7.79
Less: Participation Certificates
--Net Domestic Bank Credit
853.82
Loan Policy
The Bank has come out with a Loan Policy called Loan Policy Document 2003 and the objective of the Loan Policy
strategies are as under:
I Broad objectives of the Loan Policy:
Credit Expansion:

To achieve projected corporate business growth in Loans & Advances of the bank with a review on year to year
basis.
Credit Portfolio:

Expansion of the customer base with a mix of Retail & Corporate banking. To have a well diversified and a quality
credit portfolio; supported by a Risk Management System in place.

To optimise the return on funds deployed by pricing loan taking into account the Risk perception.
Compliance with Regulatory framework:

To conform to various guidelines, directives, instructions, issued by the Govt. of India/Reserve Bank of India/Bank’s
Board of Directors and the Top Management of the Bank.
Financial Sector Reforms:

Bank to adapt itself to various and rapid changes taking place in the economy due to financial sector reforms and
frame/review the Loan Policy in keeping with such changes.
Flexibility:

Loan Policy to be broad and flexible so as to provide for changes in the economic scenario; any competitive element
in the Banking Industry, to accommodate newer developments and reforms introduced from time to time and such
other issues.
ALM Concept:

To take care of ALM requirements.
Strategies:

The bank will have a well-planned approach for building up and development of the credit portfolio by identifying the
thrust areas; marketing of credit and building up customer relationship, customizing the various products, introduction
of new products, flexibility in approach within the prescribed RBI/Bank’s guidelines. The quality of service with
minimum response time would be the prime consideration to attract good Customers.
Credit Approval Authority and Procedures
The Bank adopts stringent standards of appraisal for its advances. The various levels of authorities are vested with
discretionary powers to sanction credit limits. Detailed guidelines have been formulated to appraise, sanction the credit
proposals and post disbursement monitoring and follow-up. The officers of the Bank are well trained to appraise the credit
proposals in an efficient and skillful manner. The Bank is continuously toning up the skills of the officers in credit
appraisals by imparting training both in house as well by deputing to outside agencies by NIBM, BTC. Etc.,
The credit limits sanctioned by one layer of authority is being reviewed by the next higher layer authority and any
comments/ observations of higher authority are taken up for rectification.
Amounts sanctioned by the Bank (Category-wise) in the FY 2003 are as follows (Rs. in crores)
Sanctioning Authority
No. of Accounts
Fund based
Management Committee
114
860.13
Chairman & Managing Director
11
17.52
Executive Director
29
9.91
General Manager
12
1.58
TOTAL
166
889.14
35
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Sanctioning Authority
Management /Credit Committee of the Board
1. Committee of Executives
2. CMD
3. ED
4. General manager
5. Regional Manager
Headed by GM
Headed by DGM
6. Branch Manager
Grade – A
Grade – B
Grade – C
Grade – D
** Both fund based & non fund based put together
(Rs. in crores)
Power for Limits
Full (Subject to prudential norms like single borrower
exposure norms, group
Borrower exposure norms etc.
(Rs in crores)
Below 5
3.00*
2.50 *
1.50-*
1.50-*
1.00-*
0.50-*
0.25*
0.10-*
0.05-*
INVESTMENTS
Investment Portfolio
The investment portfolio of the Bank stands at Rs. 964.96 crores mark as on September 30, 2003.The investment
portfolio of the Bank as on September 30, 2003 is furnished below.
(Rs. in crores)
Government Securities
833.39
Other Approved Securities
25.69
Shares
6.81
Debentures & Bonds
97.07
Subsidiaries & Joint Ventures
-----Others
2.00
Total Gross Investments
964.96
With the introduction of prudential norms, deregulation of interest rates and capital adequacy measures, there has been a
gradual shift of focus to investment activities. Accordingly, the investment portfolio of the Bank has increased steadily over
the years. A large proportion (more than 89.03%) of the Bank's total investment is held in Government and other approved
securities.
The Bank has been able to maintain a fairly consistent portfolio yield by regular churning and changing portfolio mix.
Duration of the Central Government portfolio, which shows the average time in which the investments could be realised
after reckoning the prevailing yield for reinvestment of coupon income, remains at 7.15 years. Though this is under control
and within the parameters fixed in the Investment policy (6.50 years for entire portfolio), this could rise with the tenor of
Govt. securities offered in the primary market as part of this year’s Government borrowing programme.
Valuation of the “Available for Sale” segment as per RBI norms/FIMMDA rates shows the following surplus with
reference to position as on 30.09.2003
a)
b)
c)


Government securities
Rs.13.99 crores.
Other SLR securities
Rs. 5.01 crores.
Bonds and Debentures
Rs.10.47 crores.
Shares & Mutual Funds is the only portfolio which suffered depreciation of approximately Rs. 1. 75 crores.
As against the above surplus in the Govt. securities basket, the premium element on securities remains at Rs.75.73
crores or 12.82% of the face value, as against 12.61% last year. Premium in absolute terms last year was Rs. 70.69
crores.
As against a diminution of Rs. 0.10crores in the Mutual Fund valuation, provision already held is Rs. 0.10 crores. The
depreciation has occurred mainly in the Equity-oriented and Balanced fund units, which the Bank has been
selectively offloading depending upon market conditions.
Valuation of Trading Segment of Rs. 109.98 crores as of September 30, 2003 resulted in a loss of Rs. 0.06 crores.

Profit on Sale of Securities or Trading profit for Half year ended 30/09/03 was Rs. 24.05 crores, as against Rs. 47.96
crores during the full year 2002-03. While sale out of Held to Maturity segment and consequent profit of app Rs.
2.30 crores was taken to Capital Reserve last year, no such sale has been made during first half of 2003-04.
36
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.

Secondary Market Turnover for the year reached Rs. 2311 crores (excluding Inter-bank Repo transactions) during
the Half year ended 30/09/03, as against Rs. 4190 crores for the last full year ended 31/03/03. This formed 0.18% of
the total secondary market turnover (excluding Repo transactions).
A volatile yield on Govt. securities has had a sobering effect on Non-SLR portfolio, as the risk premium levels, which were
almost non-existent at one stage, have started rising. The predominant players have come to recognize the importance of
rating and the effect of lack of rating on liquidity and valuation.
Investments by the Bank
As on
Gross investments (domestic)
SLR investments
Held Till Maturity (HTM)
Available For Sale
Held For Trading
% of HTM to entire portfolio
As on
Gross Investments
SLR Investments
Permanent Investments
March 31,
1999
247.59
171.71
62.43
185.16
--25.22
March 31,
2000
365.24
281.51
66.19
299.05
--18.12
March 31,
2001
548.24
455.86
72.38
475.86
--13.20
March 31,
2002
630.22
542.46
65.76
479.85
84.61
10.43
(Rs. in crores)
March 31,
Sept. 30, 2003
2003
666.41
964.96
558.30
859.08
115.02
138.96
526.81
716.02
24.58
109.98
17.26
14.40
March 31,
1999
247.59
171.71
62.43
March 31,
2000
365.24
281.51
66.19
March 31,
2001
548.24
455.86
72.38
March 31,
2002
630.22
542.46
65.76
(Rs. in crores)
March 31,
2003
Sept. 30, 2003
666.41
964.96
558.30
859.08
115.02
138.96
The break up of investments for a period of five years (Global) is given in table below:
Security Details
Government Securities
Other Approved Securities
Shares
Debentures & Bonds
Subsidiaries & Joint Ventures
Others
Total
1998-99
144.94
26.77
5.82
69.96
--0.10
247.59
1999-00
254.74
26.77
4.32
78.06
--1.35
365.24
2000-01
429.09
26.77
4.80
85.08
--2.50
548.24
2001-02
516.07
26.39
7.33
78.43
--2.00
630.22
(Rs. in crores)
2002-03
Sept. 30, 2003
532.41
833.39
25.89
25.69
2.03
6.81
104.08
97.07
----2.00
2.00
666.41
964.96
The Net investment figure shown in the Balance Sheet is obtained after deducting depreciation from the figure of Gross
Investments shown above.
Yield on Investments
The yield on investments (%) for the last five years is given below:
As on
March 31,
March 31,
1999
2000
Yield including profit on sale of
investments (%)
13.93
14.18
Yield excluding profit on sale of
investments (%)
13.02
11.28
March 31,
2001
March 31,
2002
March 31,
2003
Sept. 30, 2003
12.61
20.11
15.63
13.43
11.25
10.22
8.92
7.67
ASSET CLASSIFICATION, INCOME RECOGNITION & PROVISIONING
Asset Classification
The Bank classifies its assets in compliance with RBI IRAC guidelines. Under these guidelines, an asset is classified as
non-performing if any amount of interest/principal remains overdue for more than 180 days in respect of term loans. In
respect of overdraft/ cash credit, an asset is classified as non-performing if the account remains out of order for a period
of 180 days and in respect of bills, if the account remains overdue for more than 180 days.
NPAs are further categorized into three such categories i.e. Substandard, Doubtful and Loss Asset depending upon the
period of delinquency and availability of tangible security. The table below gives the criteria for asset classification viz.
Standard, sub-standard, doubtful and loss asset-
37
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Category
1 Performing
Standard Assets
2. Non-Performing
a) Sub-Standard Assets
b) Doubtful Assets
c) Loss Assets
Classification
An Asset which has not posed any problem and which does not carry more than the normal
business risk
An asset which has been non-performing for a period less than or equal to eighteen months
An asset, which has been non-performing for a period exceeding eighteen months
Assets which are not backed by tangible security / or identified or classified as loss asset by the
Bank/Auditors of the Bank/RBI.
When an account is classified as NPA, interest already debited to the account but not realised, is de-recognised and
further interest accrued is collected on cash basis.
Provisioning and Write-Offs:
As per RBI guidelines, provisions are arrived on all outstanding NPAs, as under:
Sub-Standard Assets
10% of the outstanding
Doubtful Assets
20% or 30% or 50% of the secured portion based on the number of years the account
remained as "Doubtful Asset" (i.e. up to one year, one to three years and more than three
years respectively) and at 100% of the unsecured portion of the outstanding after netting
retainable or realisable amount of the guarantee claims already received/lodged with
DICGC/ECGC, if any
Loss Assets
100% of the outstanding after netting retainable amount of the guarantee claims already
received/lodged with DICGC/ECGC, if any
Standard Assets
A general provision of 0.25%
Asset Classification of Performing and Non-Performing Assets for the last 5 years is given below:
(Rs. in crores)
Classification of assets as on
March 31,
March 31,
March 31,
March 31,
March 31,
Sept. 30,
1999
2000
2001
2002
2003
2003
Standard Assets
291.97
417.85
510.87
744.80
857.11
638.19
Sub Standard Assets
66.06
46.35
32.15
42.51
23.76
31.85
Doubtful Assets
22.85
40.33
70.18
62.17
60.60
69.95
Loss Assets
0.07
0.07
0.18
0.02
0.00
0.24
Gross NPAs
88.98
86.75
102.51
104.70
84.36
102.04
Gross Advances
380.95
504.60
613.38
849.50
941.47
740.23
Advances given above are Gross Advances while the Balance Sheet indicates Net Advances after setting off provisions,
interest suspense etc: Gross Advances – (Provisions, Interest Suspense and DICGC & ECGC claims) = Net Advances.
Asset Classification of Performing and Non-Performing Assets for the last 5 years is given below: (as a % of
Gross Advances)
Classification of assets (%) as
March 31,
March 31,
March 31,
March 31,
March 31,
Sept. 30,
on
1999
2000
2001
2002
2003
2003
Standard Assets
76.64
82.81
83.29
87.68
91.04
86.22
Sub Standard Assets
17.34
9.19
5.24
5.00
2.52
4.30
Doubtful Assets
6.00
7.99
11.44
7.32
6.44
9.45
Loss Assets
0.02
0.01
0.03
----0.03
Total
100.00
100.00
100.00
100.00
100.00
100.00
The asset quality of the Bank has improved considerably during the last 2 years. Gross NPA to Gross Advances dropped
from 12.32% in FY02 to 8.96% in FY03 and while Net NPA to Net Advances fell from9.85% in FY02 to 6.33% in FY03.
The increase during the half year ended 30.09.03 has been due to addition of new NPA. Bank has targetted to bring
down the NPA during the year ending 31.03.2004 below 31.03.03 level.
General Data on Non-Performing Assets
The details of Non-Performing Assets of the Bank are furnished in the various tables below:
As on
March 31,
March 31,
March 31,
March 31,
1999
2000
2001
2002
Gross NPA at the beginning of
64.20
the year
88.98
86.75
102.51
Addition during the year
--12.39
28.23
47.17
Reduction during the year
--12.52
12.47
18.22
Upgradation
----4.30
8.01
Cash Recovery
----8.17
10.21
Compromise
--------Write-off
2.68
2.10
0.00
26.76
(Rs. in crores)
March 31,
Sept. 30,
2003
2003
104.70
28.13
37.10
6.50
30.00
--11.37
84.36
28.50
10.82
-----
38
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Gross NPA at the end of the
year
Provision
Interest Suspense
DICGC & ECGC Balance
Net NPA at the end of the year
88.98
13.25
----75.73
86.75
19.09
----67.66
102.51
26.86
----75.65
104.70
23.33
----81.37
84.36
26.43
----57.93
102.04
32.10
----69.94
The provision of Rs. 32.10 crores has been netted in the Balance Sheet. Closing Balance of provision of Non-Performing
Assets as on September 30, 2003 is Rs. 32.10 crores which has been deducted from the Gross Advances figure to arrive
at the Net Advances figure as given in the Balance Sheet. Out of Rs. 32.10 crores, provisions made during the year
amounted to Rs. 5.67 crores. This figure of Rs. 5.67 crores has been included in the Provisions & Contingencies figure,
which has been charged to the Profit & Loss Account.
(Rs. in crores)
As on
March 31,
March 31,
March 31,
March 31,
March 31,
Sept. 30,
1999
2000
2001
2002
2003
2003
Gross Advances
380.95
504.60
613.38
849.50
941.47
740.23
Gross NPAs
88.98
86.75
102.51
104.70
84.36
102.04
Gross NPAs to Gross
Advances (%)
23.36
17.19
16.74
12.32
8.96
13.78
Net Advances
367.64
485.52
585.52
826.17
915.04
708.13
Net NPAs
75.73
67.66
75.65
81.37
57.93
69.94
Net NPA to Net Advances (%)
20.60
13.94
12.92
9.85
6.33
9.88
The slab-wise details of the current NPA accounts (Global) as on September 30, 2003 are indicated below:
Particulars
Below Rs. 25,000/Rs. 25,000/- and above
Total
Number of Accounts
741
1321
2062
Gross NPA Amount
0.85
101.19
102.04
Industry-wise classification on Non-Performing Assets
The industry classification of the top ten NPAs (borrower-wise classification) of the Bank as at September 30, 2003 is
given hereunder:
Sr. No.
Industry
Amount
% of the Total Gross Asset Quality as on September
(Rs. in Crores)
Advances
30, 2003
1.
Drugs & Pharmaceuticals
10.00
1.35
Substandard Asset
2.
Textiles
7.97
1.08
Doubtful Asset - D2
3.
Textiles
6.54
0.88
Doubtful Asset - D3
4.
Food Processing
4.78
0.65
Substandard Asset
5.
Textiles
3.97
0.54
Doubtful Asset - D1
6.
Metal & Metal Products
3.14
0.42
Doubtful Asset - D2
7.
Contractors/Constn/R.Est
2.42
0.33
Doubtful Asset - D1
8.
Contractors/Constn/R.Est
2.18
0.29
Doubtful Asset - D3
9.
Metal & Metal Products
1.59
0.21
Doubtful Asset - D3
10.
Car Dealers - Trading
1.54
0.21
Doubtful Asset - D1
Industry wise top 10 NPAs as on September 30, 2003
Sr. No.
Industry
NPA Amount
(Rs. in crores)
1.
Drugs & Pharmaceuticals
10.00
2.
Textiles
7.97
3.
Textiles
6.54
4.
Food Processing
4.78
5.
Textiles
3.97
6.
Metal & Metal Products
3.14
7.
Contractors/Constn/R.Est
2.42
8.
Contractors/Constn/R.Est
2.18
9.
Other Engineering inds
1.59
10.
Car Dealers – other inds
1.54
% of NPA as an Advance
to the Industry
89.44
43.84
35.97
88.85
21.84
70.09
17.87
16.10
13.04
12.63
% to Advance given to the
Industry
36.60
21.70
17.81
10.92
10.81
8.18
6.34
16.10
1.72
1.66
39
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
The details of top 10 NPAs in different industry sectors as on September 30, 2003
Sr. No. Industry
Total Advance to the
Top ten NPA Amount in
industry (A)
the industry (B)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Textile/Garments
Iron & Steel
Other Metal
Electronics
Pharmaceutical
Chemical
Food &Oil
Gem & Jewellery
Fertiliser
Others
Total
Top 10 Impaired Credits
Name of the
Borrower
Borrower-1
Borrower-2
Borrower-3
Borrower-4
Borrower-5
Borrower-6
Borrower-7
Borrower-8
Borrower-9
Borrower-10
36.73
2.07
38.35
40.96
27.32
23.93
43.78
1.31
0.17
92.64
307.26
Loans &
Advances
10.00
7.97
6.54
4.78
3.97
3.14
2.42
2.18
1.59
1.54
Contingent
Credit
-----------------------------------------
18.18
0.86
4.48
1.90
11.18
0.96
5.38
----12.19
55.13
Total Exposure
Risk
Classification
Substandard
Doubtful 2
Doubtful 3
Substandard
Doubtful 1
Doubtful 2
Doubtful 1
Doubtful 3
Doubtful 3
Doubtful 1
10.00
7.97
6.54
4.78
3.97
3.14
2.42
2.18
1.59
1.54
Sector-Wise Analysis of Gross Non-Performing Assets
Sector
March 31, 1999
March 31, 2000
March 31, 2001
Gross
Advances
Agriculture
SSI
Other PSC
Total PSC
Non PSC
Total
Gross
NPA
8.36
1.98
59.37
14.06
21.51
1.59
89.24
17.63
291.65
380.89
% Gross
Advances
23.68 8.02
Gross
NPA
%
2.48 0.46
Gross
Advances
(Rs. in crores)
Top 10 NPAs as a % of
Advance given to industry
(B/A)
49.50
41.55
11.68
4.64
40.92
4.02
12.29
----13.16
17.94
Gross
NPA
%
(Rs. in crores)
Loss Provision
Interest in Arrears
Held
1.00
0.00
2.39
0.00
3.27
0.00
0.48
0.00
0.79
0.00
1.33
0.00
0.44
0.00
1.09
0.00
0.79
0.00
0.31
0.00
March 31, 2002
March 31, 2003
Gross
Advances
Gross
NPA
%
Gross
Advances
Gross
NPA
%
September 30,
2003
Gross
Advances
Gross
NPA
%
12.31
2.98
24.21
4.98
2.13
42.77
17.01
1.87
10.99
8.56
1.76
20.56
23.68 62.70
7.39 26.40
17.62
3.27
60.17
17.28
28.72
60.49
9.92
16.4
42.88
7.51
17.51
73.04
11.91
16.31
1.95
0.36
28.61
1.95
6.82
39.43
1.94
4.92
60.77
2.08
3.42
39.64
3.06
7.72
18.96
3.51
101.09
22.21
21.97 104.90
13.99
13.34 120.66
11.46
9.5 121.24
16.73
13.8
71.29
19.76 39.04
24.44 403.76
83.11
15.39
547.35 116.35
21.26 744.60
90.71
12.18 820.81
72.9
8.88 618.99
85.31
13.78
88.92
23.35 539.92 124.12
22.99
648.44 138.56
21.37 849.50
104.7
12.32 941.47
84.36
8.96 740.23 102.04
13.78
NPA Management Strategy
The Bank is using the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
(SARFAESI) Act, 2002 as an effective tool in addition to filing of the recovery suits with Court/DRT. The Bank has
identified the pockets of concentration of NPAs and necessary effective planned steps have been initiated for recovery of
the dues by invoking all possible means, legal as well as compromise settlements..
Asset Liability Management
The maturity profile of deposits for the last 3 years is as under:
Year/ Period ended
March 31, 2001
March 31, 2002
Upto 1 Year
1 Year to 3 Years
3 Year to 5 Years
Over 5 Years
Total
March 31, 2003
Sept. 30, 2003
Rs. in crores
%
Rs. in crores
%
Rs. in crores
%
Rs. in crores
%
656.60
53
898.13
60
842.20
51
873.88
56
280.87
23
381.01
25
400.50
24
347.01
22
147.68
12
204.88
14
215.38
13
123.69
8
142.08
12
100
18.36
1
100
205.21
12
100
221.17
14
100
1,227.23
1502.38
1663.29
1565.75
40
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Maturity basket wise break up of domestic Term deposits as on September 30, 2003:
Maturity
Retail
Wholesale
1-14 days
15.6
127.58
15-28 days
22.75
3.35
29 days-3 months
41.96
152.84
3-6 months
69.98
106.84
6-12 months
142.91
190.07
1-3 years
286.69
60.32
3-5 years
119.65
4.04
Over 5 years
221.17
0.00
Total
920.71
645.04
(Rs. in crores)
Total
143.18
26.1
194.8
176.82
332.98
347.01
123.69
221.17
1565.75
Maturity Profile of the Asset Liability as on the last reporting Friday of September 2003:
Maturity
1. Outflows
Capital
Reserves & Surplus
Deposits
Borrowings
Other Liability & Provision
A: Total Outflows
B: Cumulative Outflows
2. Inflows
Cash
Balance with RBI
Balance with Other Banks
Investments
Advances Performing
NPAs
Fixed Assets
Other Assets
C: Total Inflows
3. Mismatches
D: Mismatch (C-A)
E: % Mismatch (D as a %
of A)
F: Cumulative Mismatch
G: % Cumulative
Mismatch F as % of B
(Rs. in crores)
1-14
days
15-28
days
29 days
-3 months
3-6
months
6-12
months
1-3
years
3-5
years
Over 5
years
Total
------------163.21
0.12
12.04
175.37
175.37
------------26.10
------------26.10
201.47
------------194.80
0.04
26.40
221.24
422.71
------------176.82
0.14
3.86
180.82
603.53
------------332.98
0.25
------333.23
936.76
------------372.31
0.30
29.76
402.37
1339.13
------------250.86
------12.61
263.47
1602.60
56.69
85.99
221.17
------0.33
364.18
1966.78
56.69
85.99
1738.25
0.85
85.00
1966.78
-------
14.00
-------61.99
42.25
16.23
--------------11.53
146.00
-------5.94
-------44.10
20.22
---------------------70.26
-------0.95
-------42.68
109.76
--------------2.48
155.87
-------7.09
-------2.66
61.03
---------------------70.78
-------18.56
-------25.68
109.19
---------------------153.43
-------13.55
57.71
32.91
251.80
--------------27.20
383.17
-------9.13
-------62.95
28.20
35.44
-------4.34
140.06
-29.37
44.16
-65.37
-110.04
-179.80
-19.20
-123.41
-------8.05
-------732.48
40.87
39.26
21.63
4.92
847.21
-------483.03
14.00
63.27
119.70
985.71
637.30
74.70
21.63
50.47
1966.78
---------------
-16.75
-29.37
169.20
14.79
-29.55
-50.58
-60.86
-160.62
-53.96
-340.42
-4.77
-359.62
-46.84
-483.03
132.63
--------
---------------
-16.76
7.34
-11.97
-26.61
-36.33
-26.85
-30.14
--------
--------
Maturity Profile of the Asset Liability as on the last reporting Friday of March 2003: 31.03.03
Maturity
1. Outflows
Capital
Reserves & Surplus
Deposits
Borrowings
Other Liability & Provision
A: Total Outflows
B: Cumulative Outflows
2. Inflows
Cash
Balance with RBI
Balance with Other Banks
Investments
Advances Performing
NPAs
Fixed Assets
Other Assets
C: Total Inflows
3. Mismatches
D: Mismatch (C-A)
E: % Mismatch (D as a %
of A)
F: Cumulative Mismatch
G: % Cumulative Mismatch
F as % of B
(Rs. in crores)
1-14
days
15-28
days
29 days
-3 months
3-6
months
6-12
months
1-3
years
3-5
years
Over 5
years
Total
------------124.85
0.93
27.70
153.48
153.48
------------38.79
0.00
0.00
38.79
192.27
------------208.24
0.04
33.11
241.39
433.66
------------140.18
0.22
0.00
140.40
574.06
------------330.14
0.19
3.86
334.19
908.25
------------400.50
0.25
1.25
402.00
1310.25
------------215.38
0.30
24.71
240.39
1550.64
56.69
62.59
205.21
0.00
2.54
327.03
1877.67
56.69
62.59
1663.29
1.93
93.17
1877.67
14.48
0.00
26.40
8.02
76.17
0.00
0.00
2.33
127.40
0.00
8.67
0.00
8.02
121.73
0.00
0.00
3.90
142.32
0.00
2.70
0.00
11.57
143.68
0.00
0.00
7.33
165.28
0.00
14.47
0.00
1.20
46.58
0.00
0.00
3.88
66.13
0.00
32.67
0.00
38.97
138.01
0.00
0.00
1.10
210.75
0.00
27.83
57.79
51.47
276.62
0.00
0.00
23.83
437.54
0.00
14.96
0.00
25.63
43.80
3.05
0.00
5.29
92.73
0.00
14.26
0.00
517.79
30.52
54.88
16.78
1.29
635.52
14.48
115.56
84.19
662.67
877.11
57.93
16.78
48.95
1877.67
-26.08
103.53
-76.11
-74.27
-123.44
35.54
-147.66
308.49
0.00
-16.99
-26.08
266.90
77.45
-31.53
1.34
-52.90
-72.93
-36.94
-196.37
8.84
-160.83
-61.43
-308.49
94.33
0.00
0.00
0.00
-16.99
40.28
0.31
-12.70
-21.62
-12.27
-19.89
0.00
0.00
41
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Maturity Profile of the Asset Liability as on the last reporting Friday of March 2002: 31.03.02
Maturity
1-14
1. Outflows
Capital
Reserves & Surplus
Deposits
Borrowings
Other Liability & Provision
A: Total Outflows
B: Cumulative Outflows
2. Inflows
Cash
Balance with RBI
Balance with Other Banks
Investments
Advances Performing
NPAs
Fixed Assets
Other Assets
C: Total Inflows
3. Mismatches
D: Mismatch (C-A)
E: % Mismatch (D as a % of
A)
F: Cumulative Mismatch
G: % Cumulative Mismatch
F: as % of B
days 15-28 days
3-6
months
6-12
months
1-3
years
3-5
years
Over 5
years
Total
------0.00
110.40
0.06
24.19
134.65
134.65
------0.00
57.98
0.00
0.00
57.98
192.63
------0.00
178.39
0.62
20.16
199.17
391.80
------0.00
270.67
0.62
0.00
271.29
663.09
------0.00
280.69
1.24
0.37
282.30
945.39
------0.00
381.01
2.10
12.96
396.07
1341.46
------0.00
204.88
0.00
12.18
217.06
1558.52
56.69
51.17
18.36
0.00
20.34
146.56
1705.08
56.69
51.17
1502.38
4.64
90.20
1705.08
9.62
4.64
46.00
28.21
44.10
0.00
0.00
30.36
162.93
0.00
2.72
10.32
28.20
33.48
0.00
0.00
52.58
127.30
0.00
8.69
4.35
29.65
117.54
0.00
0.00
41.17
201.40
0.00
13.26
0.00
3.74
42.68
0.00
0.00
0.00
59.68
0.00
14.11
0.00
8.00
116.41
0.00
0.00
0.99
139.51
0.00
20.65
23.98
60.67
241.19
0.00
0.00
0.00
346.49
0.00
12.65
0.00
70.13
29.56
34.71
0.00
18.50
165.55
0.00
10.51
0.00
400.81
19.69
46.82
16.86
7.53
502.22
9.62
87.23
84.65
629.41
644.65
81.53
16.86
151.13
1705.08
28.28
69.32
2.23
-211.61
-142.79
-49.58
-51.51
355.66
0.00
21.00
28.28
119.56
97.60
1.12
99.83
-78.00
-111.78
-50.58
-254.57
-12.52
-304.15
-23.73
355.66
242.67
0.00
0.00
0.00
21.00
50.66
25.48
-16.86
-26.93
-22.67
22.82
0.00
0.00
Maturity Profile of the Asset Liability as on the last reporting Friday of March 2001:
Maturity
1-14
1. Outflows
Capital
Reserves & Surplus
Deposits
Borrowings
Other Liability & Provision
A: Total Outflows
B: Cumulative Outflows
2. Inflows
Cash
Balance with RBI
Balance with Other Banks
Investments
Advances Performing
NPAs
Fixed Assets
Other Assets
C: Total Inflows
3. Mismatches
D: Mismatch (C-A)
E: % Mismatch (D as a % of
A)
F: Cumulative Mismatch
G: % Cumulative Mismatch
F: as % of B
days 15-28 days
(Rs. in crores)
29 days
-3 months
3-6
months
6-12
months
1-3
years
3-5
years
Over 5
years
Total
0.00
0.00
117.84
1.00
14.04
132.88
132.88
0.00
0.00
27.14
0.00
0.00
27.14
160.02
0.00
0.00
158.35
6.61
7.80
172.76
332.78
0.00
0.00
128.68
6.30
0.00
134.98
467.76
0.00
0.00
224.59
12.10
0.00
236.69
704.45
0.00
0.00
280.87
5.15
32.50
318.52
1022.97
0.00
0.00
147.68
0.00
0.00
147.68
1170.65
26.86
31.55
142.08
0.00
24.38
224.87
1395.52
26.86
31.55
1227.23
31.16
78.72
1395.52
16.02
0.00
75.29
0.00
21.62
0.00
0.00
9.63
122.56
0.00
5.82
1.00
0.00
45.12
0.00
0.00
1.38
53.32
0.00
1.33
42.88
0.10
38.45
0.00
0.00
5.50
88.26
0.00
14.18
0.00
0.01
23.33
0.00
0.00
4.41
41.93
0.00
11.09
0.00
7.20
66.14
0.00
0.00
0.07
84.50
0.00
13.88
0.00
139.09
254.58
0.00
0.00
15.21
422.76
0.00
7.29
7.33
66.10
59.19
0.00
0.00
12.25
152.16
0.00
7.03
0.00
334.26
77.08
0.00
11.66
0.00
430.03
16.02
60.62
126.50
546.76
585.51
0.00
11.66
48.45
1395.52
-10.32
26.18
-84.50
-93.05
-152.19
104.24
4.48
205.16
0.00
-7.77
-10.32
96.46
15.86
-48.91
-68.64
-68.94
-161.69
-64.30
-313.88
32.73
-209.64
3.03
-205.16
91.23
0.00
0.00
0.00
-7.77
9.91
-20.63
-34.57
-44.56
-20.49
-17.53
0.00
0.00
29 days
-3 months
-65.37
-76.11
2.23
0.00
3-6
months
-110.04
-74.27
-211.61
-93.05
6-12
months
-179.80
-123.44
-142.79
-152.19
1-3
years
-19.20
35.54
-49.58
104.24
Asset Liability Mismatch for last three years:
Year/ Period ending
September 30, 2003
March 31, 2003
March 31, 2002
March 31, 2001
1-14
(Rs. in crores)
29 days
-3 months
days 15-28 days
-29.37
-26.08
28.28
-10.32
44.16
103.53
69.32
26.18
(Rs. in crores)
3-5
years
-123.41
-147.66
-51.51
4.48
Over 5
years
483.03
308.49
355.66
205.16
Total
0.00
0.00
0.00
42
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Structural Liquidity for last three years
Maturity
1-14 days
15-28 days
29 days - 3 months
3-6 months
6-12 months
1-3 years
3-5 years
Over 5 years
Total
(Rs. in crores)
Total Inflows
Total Outflows
Mismatch
March
March
March Sept. 30,
March
March
March Sept. 30,
March
March
March Sept. 30,
31, 2001 31, 2002 31, 2003
2003 31, 2001 31, 2002 31, 2003
2003 31, 2001 31, 2002 31, 2003
2003
122.56
162.93
127.40
146.00
132.88
134.65
153.48
175.37
-10.32
28.28
-26.08
-29.37
53.32
127.30
142.32
70.26
27.14
57.98
38.79
26.10
26.18
69.32
103.53
44.16
88.26
201.40
165.28
155.87
172.76
199.17
241.39
221.24
-84.50
2.23
-76.11
-65.37
41.93
59.68
66.13
70.78
134.98
271.29
140.40
180.82
-93.05 -211.61
-74.27 -110.04
84.50
139.51
210.75
153.43
236.69
282.30
334.19
333.23 -152.19 -142.79 -123.44 -179.80
422.76
346.49
437.54
383.17
318.52
396.07
402.00
402.37
104.24
-49.58
35.54
-19.20
152.16
165.55
92.73
140.06
147.68
217.06
240.39
263.47
4.48
-51.51 -147.66 -123.41
430.03
502.22
635.52
847.21
224.87
146.56
327.03
364.18
205.16
355.66
308.49
483.03
1395.52 1705.08 1877.67 1966.78 1395.52 1705.08 1877.67 1966.78
-------------------------
Maturity Pattern of Assets & Liabilities as on September 30, 2003:
Particulars
Loans & Advances
Deposits
Borrowings
Foreign Currency Assets
Foreign Currency Liability
1-14
Advances as on September 30, 2003:
Gross Bank Credit
March 31, 1999
Rural
Semi-Urban
Urban
Metropolitan
Sub Total
Total
(Rs. in crores)
days 15-28 days 29 days - 3-6 months
3 months
16.23
20.22
109.76
61.03
163.21
26.10
194.80
176.82
0.12
------0.04
0.14
-------------------------------------------------
39.27
114.81
132.78
94.09
380.95
380.95
6-12 1-3 years
months
109.19
251.80
332.98
372.31
0.25
0.30
-------------------------
March 31, 2000
March 31, 2001
March 31, 2002
42.61
129.03
146.84
188.12
504.60
504.60
43.14
114.33
185.43
270.48
613.38
613.38
43.96
109.33
234.24
461.97
849.50
850.50
3-5
years
63.64
250.86
-------------------
Over 5
years
80.13
221.17
-------------------
Total
712.00
1738.25
0.85
-------------
(Rs. in crores)
March 31, 2003
September 30,
2003
43,.28
42.06
81.69
66.26
234.99
230.06
581.51
401.85
941.47
740.23
941.47
740.23
ALM Strategy of the Bank
The Bank is implementing Core Banking solution at major branches to further improve ALM system.
Financial Ratios and other Financial Information of the Bank for the last 5 years:
Year/ Period ended
March 31,
March 31,
March 31,
1999
2000
2001
Average Balances of Interest Earning Assets
(Rs. in crore)
628.01
682.03
925.45
Average Interest Rate (%)
15.43
14.26
13.34
Interest Income (Rs. in crore)
96.88
97.24
123.44
Average Balances of Interest Bearing
Liabilities (Rs. in crore)
664.83
709.76
945.25
Interest Rate (%)
12.76
11.65
10.91
Interest Expenses
84.86
82.66
103.15
Average Balances of Interest Bearing Rupee
Liability (Rs. in crore)
664.83
709.76
945.25
Interest Rate for the above (%)
12.76
11.65
10.91
Ratio of Average Interest Earning Assets to
Average Interest Bearing Liabilities
94.46
96.09
97.90
Interest Expenses apportioned to Interest
Earning Assets
13.16
11.65
10.91
Net Interest Income (Rs. in crore)
12.02
14.58
20.29
Net Interest Margin (%)
1.52
1.77
1.66
Gross Yield (%)
15.07
12.17
13.34
Average Cost of Loan Funds (Borrowings)
(%)
9.82
9.71
9.94
Yield Spread (%)
3.19
2.64
2.86
Return on Average Assets (%)
0.16
0.7
0.41
Average Share Capital, Reserves to Average
Total Assets (5)
5.03
4.85
4.14
Cash Earning Per Share (Rs.)
2.07
3.45
2.44
March 31,
2002
March 31,
2003
Sept. 30,
2003
1285.26
11.21
144.13
1790.04
8.69
155.51
2086.9
7.26
75.71
1253.58
10.44
130.87
1408.74
9.17
129.17
1614.89
7.98
64.43
1253.58
10.44
1408.74
9.17
1614.89
7.98
102.53
127.07
129.23
1.06
13.26
0.91
10.33
1.87
26.34
1.41
12.17
1.40
22.56
1.14
10.35
7.03
0.86
1.26
6.98
3.22
1.41
6.74
6.29
3.97
6.42
4.79
6.59
4.44
1.13
43
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
CAPITAL ADEQUACY RATIO
The RBI’s guidelines on Capital Adequacy Ratios (CAR) generally conform to the guidelines adopted by the Committee
on Banking Regulations and Supervisory Practices of the Bank of International Settlements (“BIS”). The RBI requires that
assets, non-funded items and other off-balance sheet exposures be assigned weights according to prescribed risk
weights and that each Bank must maintain capital levels equivalent to a prescribed ratio to such risk weighted assets. All
financial ratios and capital adequacy ratios confirm to RBI norms.
Capital
For the purpose of calculating the CAR, capital of a Bank is divided into two classes i.e. Tier I capital and Tier II capital.
Tier I capital, also known as core capital, represents amounts readily available to support the Bank against unexpected
losses. Tier-I capital consists of paid up capital, statutory reserves and other disclosed free reserves. Tier-II capital
comprises elements that are less permanent in nature and thus less readily available. Tier II capital consists of
subordinated debt (with an minimum maturity of five years), undisclosed reserves, cumulative perpetual preference
shares, revaluation reserves (to the extent of 45% of the total amount of revaluation reserves on the Bank’s book),
general provisions and hybrid capital. The total capital for the calculation of CAR is the sum of Tier I capital and Tier II
capital and is taken, with the condition that the Tier II capital should not exceed Tier I capital. RBI vide its circular dated
October 31, 1998 prescribed that banks should achieve a minimum CAR of 9% with effect from the year ending March 31,
2000.
Risk Weighted Assets
Each class of assets of the Bank (including off-balance sheet assets) is assigned a risk weight (following certain norms
laid down by RBI). The value of risk weighted assets for each class of assets is obtained by multiplying the amount of
each asset class by its risk weight. The total risk weighted assets are obtained by summing up the individual risk weighted
assets.
Risk Management
General
The Bank recognises that management of risk is fundamental to the business of banking. The Bank’s approach to risk
management is proactive. The primary goal of risk management is not to avoid risks inherent in business but to steer
them consciously and actively. The basic objective is to strike a balance between risk and returns. For promoting a
balance between risk and returns, adoption of best practices in Banking system, the Bank has set up a separate
department named ‘Risk Management Department’ to confront various types of financial & non-financial risks.
In consonance with RBI directives, the Bank has classified the risk into two categories:
1.Financial Risk (Credit and Investment)
2.Non-Financial Risk (Market and Operational)
A Board level Risk Management Committee has been set up. The bank has also set up a Risk Management and Loan
Review Department under the independent charge of a General Manager. The bank has laid down the following policies
i.
ii.
iii.
iv.
v.
vi.
vii.
Credit /Loan policy
Loan Recovery Policy
Investment Policy
ALM Policy
I T Policy
Inspection Policy
Policies on Personnel matters
These policies in addition to containing the guidelines on the functional areas,
associated.
also address to the various Risks
Credit Appraisal; sanctioning & Post disbursement follow-up & monitoring
The bank provides both long term and short term finance and also extends Non-fund facilities in the form of various
products both for corporates and Retail/personnel segments
The bank has in place a proper credit appraisal system; well laid down delegated sanctioning powers at various level and
post disbursement follow-up and monitoring of the advances
The Bank is planning to introduce the revised inspection system based on degree of risk involved in the operation of
branches and controlling offices. Knowledge and skill of risk management is being updated through in-house training
system.
44
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Non-Financial Risk
Market Risk: The asset liability management committee looks after the structural liquidity mismatch within the risk
parameters laid down by the bank. The committee also takes care of interest rate risk, Liquidity risk, equity risk, maturity
mismatch risk and other type of risks such as Foreign exchange rate, equity pricing and commodity pricing etc.
Operational Risk: Operational risk is the result of failure of systems in the Bank due to certain reasons like fraudulent
activities, natural disaster, human error, commission and sabotage etc. For mitigating and controlling the same, Bank has
a strong and established internal control system. Apart from that a separate department formulates and monitors
delegation of duties and responsibilities.
Internal Control System and the Adequacy
Three tier system of controls i.e. Head Office, Regional Offices and Branches is placed in the Bank. An Executive of the
General Manager heads the Inspection and Vigilance Department. There is continuous review and monitoring of the
performance of the department by the Audit Committee of the Board. It covers review of Internal Branch Inspection
System, Concurrent Audit, Information Systems Audit (IS Audit), RBI Inspection, Statutory Audit, Investment Audit.
Branches are subjected to inspection/ audit once in every 12 months. The concurrent audit of branches covering more
than 50 per cent of Bank’s business is conducted through reputed firms of Chartered Accountants.
There is continuous supervision and monitoring as to adherence to systems and procedures/ guidelines, rules and
regulations of the Bank and that of controller i.e. RBI. The internal control system is adequate in assisting effective risk
management and it is adequately responsive to take care of changing environment.
VI. SIGNIFICANT REGULATORY MATTERS RELATED TO THE BANK
REGULATORY FRAMEWORK
Lord Krishna Bank is licensed as a Bank and is regulated and supervised by RBI and the laws, rules and regulations
provided in relation thereto in the Banking Regulation Act, 1949, the RBI Act, 1934 and other related enactment such as
the Banker’s Books of Evidence Act, 1891.
Its activities, like all other commercial banks and financial institutions, are supervised by a Board for Financial Supervision
set up by RBI, under the Chairmanship of the Governor of RBI. This Board is assisted by the Department of Financial
Supervision of RBI.
Lord Krishna Bank observes the requirements and conditions applicable to a banking company on matters, inter alia, as
mentioned herein below:
(a) The forms of business in which Lord Krishna Bank and its subsidiaries may engage in is specified and regulated by
the Banking Regulation Act, 1949. Pursuant to the provisions of Banking Regulation Act, 1949, Lord Krishna Bank
cannot directly or indirectly deal in the buying, selling, bartering of goods by itself or for others except in connection
with the realisation of security given to it or held by it or in connection with bills of exchange received for collection or
negotiation or with such of its business entailing undertaking the administration of estates as executor, trustee or
otherwise, or any such business as specified under Section 6(1)(o) of the Banking Regulation Act, 1949. Goods for
this purpose means every kind of movable property, other than actionable claims, stocks, shares, money, bullion and
specie and all instruments referred to in section 6(1)(a) of Banking Regulation Act, 1949. Subject to the provisions of
the Banking Regulation Act, 1949, Lord Krishna Bank and its subsidiaries will pursue business avenues as permitted
under Section 6 of the Banking Regulation Act, 1949 in contrast to companies not being a banking company under
the Banking Regulation Act, 1949.
(b) Appointment or re-appointment of the MD & CEO and other Directors of Lord Krishna Bank will be subject to the
approval of RBI. The MD & CEO of Lord Krishna Bank is required to have certain specified qualifications as per the
Banking Regulation Act. RBI is empowered to remove such an appointee on the ground of public interest, interest of
depositors or to ensure the proper management of Lord Krishna Bank. RBI may order meeting of Lord Krishna
Bank’s board of directors to discuss any matter in relation to Lord Krishna Bank, appoint observers to such meeting
and in general may make such changes to the management as it may deem necessary and can also order the
convening of the general meeting of Lord Krishna Bank to elect new directors. Additionally, Lord Krishna Bank may
not appoint persons as directors who are already directors on the board of another banking company.
(c) Lord Krishna Bank will need to obtain the prior approval of RBI to open new branches.
(d) Lord Krishna Bank cannot, subject to the provisions of the Banking Regulation Act, 1949, hold shares in any
company (save and except its existing subsidiary) exceeding 30.0% of the paid-up share capital of such company or
30% of its own paid up share capital and reserves, whichever is less. Lord Krishna Bank will require the prior
permission of RBI to incorporate a subsidiary.
(e) Lord Krishna Bank and its subsidiaries will have to observe the prudential norms stipulated by RBI, from time to time,
in respect of their underwriting commitments. Pursuant to such prudential norms, the underwriting commitment under
any single obligation of Lord Krishna Bank or its subsidiaries shall not exceed 15% of an issue.
45
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
(f)
A shareholder of Lord Krishna Bank will not be able to exercise voting rights on poll in excess of 10% of the total
voting rights of all the shareholders of Lord Krishna Bank.
(g) RBI in its directive to all Indian private sector commercial banks, including Lord Krishna Bank, requires such banks to
obtain the acknowledgement of RBI before effecting transfer of shares when the transfer makes the shareholding of
the individual/ group equivalent to 5% or more of the total paid up capital of such banks.
(h) For creating floating charge on Lord Krishna Bank’s undertaking or its property, prior approval of RBI will be required.
Currently, all borrowings of Lord Krishna Bank, as also the issue of bonds, are unsecured.
(i) Lord Krishna Bank is required, under the Banking Regulation Act, 1949, to create a reserve fund and out of the
balance of profit each year as disclosed in the profit and loss account prepared under Section 29 of the Banking
Regulation Act, 1949, and before any dividend is declared, required to transfer to the reserve fund a sum equivalent
to twenty percent of such profit.
(j) Lord Krishna Bank is required under the Banking Regulation Act, 1949, to ensure at periodic intervals that the assets
in India shall not be less than 75% of its demand and time liabilities in India, and submit returns to RBI in the
prescribed form and manner.
(k) Lord Krishna Bank will be required to prepare its balance sheet and profit and loss account in the forms set out in the
Third Schedule to the Banking Regulation Act, 1949 or as near thereto and subject to and in accordance with the
other provisions of the Banking Regulation Act, 1949 read with the Companies Act, 1956.
(l) A compromise or arrangement between Lord Krishna Bank and its creditors or any class of them or between Lord
Krishna Bank and its members or any class of them or any modification in any such arrangement or compromise will
not be sanctioned by any High Court unless such compromise or arrangement or modification, as the case may be,
is certified by RBI in writing as not being incapable of being worked and as not being detrimental to the interest of the
depositors of Lord Krishna Bank.
(m) Amalgamation of Lord Krishna Bank with any other banking company in future will require being sanctioned by RBI
and shall be in accordance with the provisions of the Banking Regulation Act, 1949.
(n) The Bank will pay dividend on its shares only after all its capitalized expenses (including preliminary expenses,
organisation expenses, share-selling commission, brokerage, amounts of losses incurred and any other item of
expenditure not represented by tangible assets) have been completely written off.
(o) Lord Krishna Bank is required to maintain books, records and registers. The Banking Regulation Act, 1949
specifically requires such companies to maintain books and records in a particular manner and file the same with the
Registrar of Companies on a periodic basis. The provisions for production of documents and availability of records
for inspection by shareholders would apply to Lord Krishna Bank as in the case of any company.
(p) Lord Krishna Bank would have to obtain the prior permission of RBI to issue bonus shares as prescribed under the
Banking Regulation Act, 1949.
(q) Subject to and on account of laws governing banking companies, the financial disclosures in the Information
Memorandum may not be available to investors after listing on a continuous basis.
(r) The special status of banks is recognized under other statutes including the Sick Industrial Companies Act, 1985,
Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and Securitisation & Reconstruction of
Financial Assets & Enforcement of Security Interest Act, 2002. As a bank, Lord Krishna Bank is entitled to certain
benefits under various statutes including the following:
 The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 provides for establishment of Debt
Recovery Tribunals for expeditious adjudication and recovery of debts due to any bank or Public Financial
Institution or to a consortium of banks and Public Financial Institutions. Under this Act, the procedures for
recoveries of debt have been simplified and time frames been fixed for speedy disposal of cases. Upon
establishment of the Debt Recovery Tribunal, no court or other authority can exercise jurisdiction in relation to
matters covered by this Act, except the higher courts in India in certain circumstances.
 The Sick Industries Companies Act, 1985, provides for reference of sick industrial companies, to the Board for
Industrial and Financial Reconstruction (BIFR). Under the Act, other than the Board of Directors of the Bank, a
scheduled bank (where it has an interest in the sick industrial company by any financial assistance or obligation,
rendered by it or undertaken by it) may refer such company to the BIFR.
 The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
(“SARFAESI Act”) focuses on improving the rights of banks and financial institutions and other specified
secured creditors as well as asset reconstruction companies (ARCs) by providing that such secured
creditors/ARCs can take over management control of a borrower company upon default and/or sell assets
without the intervention of courts, in accordance with the provisions of the SARFAESI Act. Further, the
SARFAESI Act also has related features to enable securitisation of corporate debt, the establishment and
functioning of ARCs and the establishment of a Central Registry.
Inspection by RBI
RBI conducts an annual inspection of the Bank based on the audited accounts. Simultaneously, RBI carries out inspection
of branch/controlling offices on a selective basis. RBI also conducts offsite surveillance of the branches of the Bank on a
quarterly basis. Discussions with the management of the Bank also form a part of the inspection and surveillance process.
An inspection of the Bank under section 35 of the Banking Regulation Act, 1949 was conducted by the Reserve Bank of
India with reference to its position as on 31.03.2003. The Annual Inspection Report of the Reserve Bank of India has
identified certain weaknesses in the system, operational irregularities and other deficiencies in their internal controls.
46
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
The inspection of the Bank by RBI is a regular exercise and is carried out periodically for all the banks and Financial
Institutions. The reports of RBI are strictly confidential and the Bank has informed the RBI about the actions already
taken and measures that are under implementation in respect of observations made by RBI. The issues raised by RBI in
the aforesaid report have been replied to by the Bank.
VII. ORGANISATION STRUCTURE & MANAGEMENT
KEY MANAGERIAL PERSONNEL (as on date)
Name
Age
Date of Designation
(Years)
Joining
Mr. R.M. Nayak
Mr. V.K. Gupta
Mr. S.M. Lal Goel
Mr. R. Venkatraman
Qualification
59
09/01/03
MD& CEO
B.Sc., B.L.,Dip.
Mktg &Advt.
IBSS(USA)
CAIIB
56
21/05/01
Dy. M.D
B.Sc.,
52
16/10/97
General
Manager
56
21/07/00
General
Manager
M.Sc, LLB,
PGDPM & LW
CAIIB
M.Sc, CAIIB
DSM,DIS,DFS
Details of previous
employment
General Manager
Bank of Maharashtra/
Chairman of Marathwada
Grameen Bank Naded
General Manager Oriental
Bank of Commerce/
Executive Director of Lord
Krishna Bank
Work Experience
32 years of Banking
Service
35 years of Banking
Service
Scale V in Bank of
Maharashtra
28 years
Scale V in Bank of
Madura
31 years
CHANGES IN KEY MANAGERIAL PERSONNEL IN LAST 1 YEAR
There has been no change in the key managerial personnel in last one year.
BOARD OF DIRECTORS (as on September 30, 2003)
Sr. Name & Designation
Age Qualification &
Date of
Date of Expiry of Residential Address Particulars of other
(Years)
No.
Experience
Appointment Current Term
Directorships
1. Mr. R. M. Nayak
B.Sc ., B.L.,Dip. 24/12/2002 3 year from date Flat No.8C Peevees None
Managing Director
Mktg &Advt.
of joining
Skyline Flats Marine
&CEO
IBSS(USA)
Drive, Ernakulam
59
CAIIB.
2. Mr. V. K. Gupta
B.Sc.,
21/03/2003
-doFlat No.10D Express None
Deputy Managing
Estate Kaloor, Kochi Director
56
17
3. Mr. A. K. Puri
Graduate
29/09/2000 Retirement by Mohan Exports(I)Ltd (1) Mohan Exports India
Director
rotation
Mohan House
Pvt. Ltd; (2) Mohan
Community Centre investments &
Zamrudpur Kailash Properties Pvt Ltd;(3)
Colony Extn
Pawan Builders Ltd;(4)
New Delhi 100 048 Navarattan Enterprises
Pvt Ltd;(5) Purilon
Ltd;(6) Mohan Modes
Pvt Ltd;(7) Moha holding
Pvt Ltd;(8) Travel Club
(I) Pvt Ltd;(9)
I Independent
invest.Co.;(10) Mohan
leathers Ltd;(11) Fomost
55
Factors Ltd.
4. Mr. R. C. Kapoor
B.Sc., CAIIB
27/12/2001
-doX-9, Hauz Khas, New SBL Pvt Ltd
Director
Delhi –
110 016
69
5.
6.
Mr. S. G. Rajagopala
Prabhu
Director
Mr. R. C. Bhargava
Director
Under Graduate 22/04/1997
-do-
71
M.Sc., MA
70
24/08/2001
-do-
Swargath Madom None
Sringapuram
Kodungallur -680664
220, Sector 15A, (1) ILFS Ltd;(2) Polaris
Noida, UP - 201301 software Lab Ltd;(3)
Machine Basell India
Ltd;(4) RCB Consulting
Pvt Ltd;(5) Grasim
Industries;(6) Roulands
Kodan India Ltd(7)Maruti
Udyog Ltd
47
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
7.
Mr. Karan Anand
Director
8.
Mr. Raj Kumar
Aggarwal
Director
Mr. D. C. Singhania
Director
BA, FCA
29/01/.2000
-do -
B.Com., FCA
08/04/.2003
- do-
BA ., LLB.,
27/07/2001
- do-
M.Sc.,
24/09/2003
- do -
56
9.
48
E – 282,(First Floor) (1) Mohan Exports India
Greater Kailash Part I, Ltd; (2) Formost Factors
New Delhi - 48
Ltd;(3) Flexcel
International Ltd;
3072/41, Gola Market, None
Darya Ganj New Delhi 100002
G-107, Himalaya None
House,23,Kasthurba
Gandhi Marg NewDelhi
-110 001
72
10. Mr. Naresh Chandra
Director
70
11. Mr. Pawan Kumar
Director
M.Tech
56
09/09/03
The directors of the Bank together hold 10026579 shares in the Bank.
- do-
Sector C-4, 4053 (1) Haldia
Vasant Kunj NewDelhi Petrochemicals Ltd;(2)
- 110070
Hindustan Motors Ltd;(3)
BajaJ Auto
Ltd(4)Balrampur Chini
Mill Ltd;(5) Media
content
&Communication
Service Pvt Ltd
Vmoksha Technolo- (1) Vmoksha
gies P Ltd 6th Floor Technologies Pvt Ltd;(2)
Corporate Tower C Vmoksha Technologies
Diamond Dist. Airport (Mouritius Ltd; (3) Jadoo
Road, Bangalore - works Pvt
560008
Ltd;(4)Fortress Network
Security Pvt
Ltd;(5)Adamya
Technologies Pvt Ltd.
The cumulative expenditure on travelling allowance (TA), hotel/halting expenses (HA) and fees for directors in the last one
year is as follows:
Particulars
Amount (Rs. in lacs)
Year ended March 31, 2003
Half Year ended Sept. 30, 2003
Remuneration (Salary)
Sitting Fees paid to Directors
3.59
3.20
Travelling Expenses incurred by Directors
15.93
7.37
Halting Allowance (HA) incurred by Directors
6.09
2.07
Hotel Expenses incurred/ paid to Directors
2.99
0.60
Total
28.61
13.24
COMMITTEES OF THE BOARD OF DIRECTORS
Audit Committee
1.Mr. Raj Kumar Aggarwal
2.Mr. Karan Anand
3.Mr. Rajagopala Prabhu
4.Mr. Pavan Kumar
5.Mr. Naresh Chandra
Chairman
The Audit Committee is constituted of five Independent Directors, besides RBI nominee Director. In the financial year
2002-2003, the audit committee met 7 times as against the mandated number 6 times a year.
Terms of Reference of Audit Committee

Authority to investigate into any matter as specified in section 292A of the Companies Act, 1956 and shall have full
access to information contained in the records of the Bank and to avail external professional advise whenever
required.
 Oversight of the Bank’s financial reporting process and disclosure of its financial information to ensure honest
financial reporting.
 Reviewing of Financial Statements and Inspection Reports, thereby ensuring the compliance with various statutes.

Recommending the appointment and removal of external auditors, fixation of audit fees etc.

Establishment of an appropriate internal control framework.
48
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.




Control of Corporate Risks.
Monitoring of activities of internal audit departments and liaisoning with external auditors.
Reviewing of Long Form Audit Reports and any such special reports.
Provide an open avenue of communication between independent auditor, internal auditor and Board of Directors.
Management /Credit Committee
1.Mr. R.M. Nayak
MD& CEO Chairman
2.Mr. Naresh Chandra
3.Mr. Raj Kumar Agarwal
4.Mr. Pawan Kumar
5.Mr. RBI Nominee director
The Management/Credit Committee of the Board is constituted by the Board of Directors. In the financial year 2002-2003,
the management /Credit committee met 9 times.
Terms of Reference of Management Committee
Sanctioning of high value credit proposals, and deciding on other credit matters
Asset Recovery and Management Committee (ARMC)
1.Mr. Mr. R.M. Nayak
MD& CEO Chairman
2.Mr. V.K. Gupta
Dy. MD
3.Mr. A.K . Puri
4.Mr. D.C. Singhania
5.Mr. R.C. Kapoor
The ARMC Committee of the Board is constituted by the Board of Directors. In the financial year 2002-2003, the
committee met 7 times.
Terms of Reference of NPA Committee

Taking measures for reduction of NPAs.

Giving directions/ guidance wherever found necessary, and monitoring the progress of recovery of NPAs.

Initiate vigorous follow up and recovery drives for effective management of NPAs.

Compromise/ write off proposals,
Other Committees
Besides the above committees, there are various other committees of the Board which also actively assist the Board of
Directors in overseeing the performance in their respective areas of operation.
HUMAN RESOURCES
The total manpower of the Bank as on September 30, 2003 was 1101 comprising 487 officers, 402 clerks and 212 substaff. The manpower position of the Bank for the last five years is as under:
As on
March 31,
March 31,
March 31,
March 31,
March 31,
September
1999
2000
2001
2002
2003
30, 2003
Officer
244
251
351
393
431
487
Award Staff
341
314
353
401
394
402
Sub-Staff
152
156
165
196
206
212
Total Number of Employees
737
721
869
990
1031
1101
The business per employee of the Bank has been on the increasing trend. The employee productivity parameters during
the last five years are depicted in the table below:
(Rs. in lacs)
As on
March 31,
March 31,
March 31,
March 31,
March 31,
1999
2000
2001
2002
2003
Business per Employee
149
200
226
246.41
264.17
Net Profit per Employee
0.18
0.93
0.65
2.09
2.36
Human Resources (HR) Development
Material developments on the front of HR/ IR including staff position:

The industrial relations are quite harmonious.

For enhancing the qualitative aspects of the human resources of the Bank, a special drive has been taken for
improvising and stabilizing the system of “Performance Appraisal”, for which an encouraging feedback is being
received from different quarters.
49
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Information Technology
The technology absorption in the Bank is done at three levels viz Branches, Regional Offices and Head Office.
a.
At Branch Level
The retail banking at branches is done through the following software systems:
ALPM
ISBS
CBS
Manual
8 Branches
31 Branches
17 Branches
45 Branches
ALPM covers savings, current, cash credit and GL functions on stand alone PCs. ISBS is LAN based solution covering
almost all the functions at a branch. CBS covers all the functions of the Branch with a centralized data base of all the
branches and in networked environment facilitating Any Branch Banking.
The SWIFT facility is utilized by 2 FEX business centers including FEX Dealing Room.
The Investment Department handles treasury operations of the Bank from Kochi. It is a member of INFINET and has
implemented PDO-NDS. The International Banking division is functioning at Delhi.
Following activities are in the process of implementation:
CFMS (Centralised Fund Management System)
SFMS (Structural Financial Messaging System)
RTGS (Real Time Gross Settlement)
b.
At Regional Office Level
All the Regional Offices have been provided with computers for various small applications related to various business
segments, staff,
c.
At Head Office Level
The following major activities have been computerized:
Inter Branch Reconciliation
Shares Accounting
Salary & Personnel Inventory
Stationary Accounting
Provident Fund & Pension Fund
Balance Sheet Consolidation
Business Plans & Figures
The following departments are provided with LAN facility:
Commercial & Institutional Credit (C&IC)
Priority
Staff & Personnel and Pension
Planning
Investment
The Bank plans to computerize 100 per cent business by 2005.
VIII. STOCK MARKET DATA OF THE EQUITY SHARES OF THE BANK
Equity shares of the Bank are not listed on any Stock Exchange.
PROMISE V/s. PERFORMANCE
As the Bank has not approached the Capital Markets, with either its equity or debt public issue, the comparison of the
Bank’s performance vis-à-vis projections can not be furnished.
50
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
IX.
MANAGEMENT DISCUSSION & ANALYSIS OF FINANCIAL PERFORMANCE
Financial Highlights of the Bank for the last five financial years as per the audited balance sheets of the Bank are as
given in the following table:
(in Lakhs)
Year/ Period
March 31, March 31, March 31, March 31, March 31, Sept. 30,
%age
%age
%age
ended
1999
2000
2001
2002
2003
2003
change
change
change
from 2001
from 2002
from Sept.
to 2002
to 2003
2002 to
Sept. 2003
Total Income
111.69
116.17
144.48
219.45
222.89
108.73
51.89%
1.57%
9.06%
Interest Income
98.00
97.24
123.44
144.13
155.52
75.71
16.76%
7.32%
2.25%
Other Income
13.69
18.93
21.04
75.32
67.37
33.02
257.98%
-10.55%
48.33%
Total
Expenditure
110.41
109.80
139.47
199.74
199.84
96.48
43.21%
0.05%
6.19%
Interest
Expenditure
84.86
82.66
103.15
130.87
129.18
64.43
26.87%
-1.29%
-6.42%
Operating
Expenditure
18.42
18.93
26.14
38.06
42.35
24.87
45.60%
10.13%
33.71%
Profit Before
Provisions &
Contingencies
8.41
14.58
15.19
50.52
51.36
17.44
230.41%
1.66%
58.61
Provisions &
Contingencies
7.13
8.21
10.18
30.81
28.31
7.18
202.65%
-8.11%
134.64%
Net Profit
1.28
6.37
5.01
19.71
23.05
10.26
293.41%
-16.94%
11.53%
Significant items of income and expenditure for the half year ended September 30, 2003 (Comparison of
financials for the half year ended September 2003 with the corresponding period in the previous year)
Net Profit: Net Profit of the Bank increased from Rs. 9.19 crore in the half year ended September 30, 2002 to Rs 10.26
crore in September 2003 showing a growth of 11.64%.
Interest Income: Total interest income decreased from Rs. 77.44 crore to Rs. 75.71 crore. Of the components of
interest income, income on advances declined from Rs. 41.55 crore in September 2002 to Rs 40.17 crore in September
2003. Global Net Advances of the Bank increased by 10.45 % from Rs. 641.12 crore as on 30-09-2002 to Rs. 708.13
crore as on 30-09-2003.
Other Income: In view of increasing pressure on interest spread, the Bank considers income from non-fund/non interest
business equally important for generating additional income to improve profitability. Other income of the Bank comprises
income from commission, exchange and brokerage, income from investment trading and forex operations, dividend
income and miscellaneous income. These incomes are earned in the normal course of business of the Bank. While the
components of other income like commission and profit on exchange transactions showed rise, the total other income of
the Bank showed decline mainly on account of amortisation of the premium on securities under held to maturity category
and lower profit on sale of investments when compared to the preceding year. Similarly profit on sale of investments
during half year ended September 2003 was higher at Rs. 24.05 crore as against Rs. 14.38 crore in the previous
corresponding period. However, as mentioned earlier, among the individual components of the Bank's other income,
commission, exchange and brokerage showed a rise by Rs. 0.55 crore in the half year ended September 2003. Profit on
exchange transactions (net) increased by Rs. 0.25 crore. Miscellaneous and other non-interest income also improved by
Rs. 0.31 crore.
Interest Expenses: Interest paid on deposits and borrowings decreased from Rs. 68.85 crore in half year ended
September 2002 to Rs. 64.43 crore in half year ended September 2003 with the growth in global deposits from Rs.
1449.60 crore as on September 2002 to Rs. 1790.28 crore as on September 2003.
Operating Expenses: During the Half year ended 30/09/03 the Bank charged to Profit & Loss Account (Rs 0.43 crores)
of retirement benefits of leave encashment under AS 15, issued by Institute of Chartered Accountants of India. However,
the total staff cost increased only by Rs. 1.08 crore. Non-staff operating expenses marginally went up by Rs. 5.19 crore.
Thus the total operating expenditure went up by Rs. 6.27 crore on year to year basis i.e. Setp 2002 to Sept 2003.
Total Income: Total income of the Bank went up by Rs. 9.03 crore from Rs. 99.70 crore in half year ended September
2002 to Rs. 108.73 crore in half year ended September 2003.
Total Expenditure: While the total income of the Bank went up by Rs. 9.03 crore, the total expenditure of the Bank
increased only by Rs.1.85 crore or from Rs. 87.45 crore to Rs. 89.30 crore.
Significant items of income and expenditure during 2002-03 (comparison of financials for the year ended March
2003 with March 2002)
Net Profit: Net Profit of the Bank increased from Rs. 19.71 Crore in 2001-02 to Rs. 23.05 Crore in 2002-03 showing a
growth of 16.94%.
Interest Income: Interest income from advances improved from Rs. 144.13 Crore in 2001-02 to Rs. 155.52 Crore in
2002-03. Gross Advances of the Bank increased by 10.83% from Rs. 849.50 Crore as on 31-03-2002 to Rs. 941.47 Crore
as on 31-03-2003. Gross investments of the Bank increased by 5.74 % from Rs. 630.22 Crore as on 31-03-2002 to Rs.
666.41 Crore as on 31-03-2003.
51
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Interest earned on investment also went up to Rs. 63.75 Crore in 2002-03 from Rs. 62.54 Crore in 2001-02. The net
interest income of the Bank improved from Rs. 144.13 Crore in 2001-02 to Rs. 155.52 Crore in 2002-03.
Other Income: Commission and exchange income of the Bank decreased from Rs. 8.82Crore in 2001-02 to Rs. 8.24
Crore in 2002-03. Profit on sale of investments decreased from Rs. 60.54 Crores in 2001-02 to Rs. 47.96 Crore in 200203. Consequently total other income of the Bank decreased from Rs. 75.32 Crore in 2001-02 to Rs. 67.37 Crore in 200203. The Bank is aware of the need to increase non-fund non-interest income in order to improve overall profitability and is
exploring various avenues to increase fee-based income.
Interest Expenses: Interest paid on deposits increased from Rs. 122.07 Crore in 2001-02 to Rs. 124.72 Crore in 2002-03
due to growth in deposits from Rs. 1502.38 Crore as on 31-03-2002 to Rs. 1663.29 Crore as on 31-03-2003.
Operating Expenses: Staff cost increased by Rs. 1.70 crores while other expenses went up by Rs. 2.59 crores, mainly
on account of increase in infrastructure of branches/expansion activities of the bank .
Other matters relating to the Operations of the Bank
Unusual or Infrequent events and transactions:
No unusual or infrequent events and transactions occurred in the last three years.
Significant economic changes that materially affected or are likely to affect income from continuing operations:
Changes in the interest rate structure that is any upward movement in interest rate, is going to reduce the value of the
investment portfolio.
Future relationship between costs and revenue:
While it is expected that costs and revenues as a percentage would come down simultaneously, the margin would be
under pressure. The net margin may also be affected by increasing operating cost.
Extent of seasonality in the business:
Bank’s business is not likely to be affected by seasonality.
Non-dependence on a few customers:
The Bank has a diversified credit portfolio to prevent any concentration in exposures both industry-wise and clientwise.
The Bank has an adequately designed credit risk policy to ensure the prevention of excess exposure to few customers.
Competitive Conditions:
The Bank has 29 rural branches where it has monopoly in business. The large network of rural and semi-urban branches
ensure that a huge captive business automatically flows in to the bank. In metro centres, the Bank faces a stiff competition
from other Banks. But then, the Bank has been consistently achieving higher growth rates than the industry.
Servicing Behaviour: The Bank has been servicing all its principal and interest liabilities on time and there have been no
defaults.
Material Developments:
In the opinion of the Directors of the Bank, there have been no material developments after the date of the last financial
statements as disclosed in the Information Memorandum, which would materially and adversely affect or are likely to
affect the trading or profitability of the Bank or the value of its assets, or its ability to pay its liabilities within the next twelve
months, other than what has been already set out elsewhere in this Information Memorandum.
Particulars Regarding Listed Companies
There is no other listed company under the same management.
X. BASIS FOR ISSUE PRICE
As per RBI guidelines vide its circular no. DBOD. BP.BC.5/21.01.002/98-99 dated 08-02-1999 for issue of Tier-II Bonds as
amended from time to time, the rate of interest offered on Tier II Bonds should not exceed 200 basis points above the
yield on Government of India securities of equal residual maturity at the time of issuing bonds.
As notified by Fixed Income Money Market & Derivatives Association of India (FIMMDA), the yield on Government of India
Securities of equal residual maturity as on November 17, 2003 (the date of authorisation of the issue by the Board of
Directors of the Bank) was as under:
As on November 17, 2003
Residual Maturity
5-Year (approx)
7-Year (approx)
Annualized Yield on Government of India Securities
5.00%
5.22%
Taking into consideration above rates of yield on Government of India securities of equal residual maturities, the Bank has
fixed the following coupon/ interest rates on these bonds:
Coupon Rate Finalized
Tenure of Bonds
63 Months
87 Months
Coupon/ Interest Rate on Bonds (% p.a., payable annually)
7.00%
7.10%
52
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
XI.OUTSTANDING LITIGATIONS, DEFAULTS AND MATERIAL DEVELOPMENTS
The litigation in which the Bank and or its subsidiaries and sponsored institutions involved are classified into 3 categories:
1.Cases filed against the Bank;
2.Cases filed against the Bank’s subsidiaries, directors, promoters, companies/ firms/ ventures promoted by the
promoters of the Bank;
3.Disputed Tax Liabilities.
1.The details of the cases filed against the Bank as on 30.09.2003 and which are outstanding as on date:
There are 18 cases against the Bank with monitory relief amounting to Rs. 2.06 crores claimed therein against the Bank.
The amount claimed does not exceed Rs.1 Crore, except in 1 case. The details of the case where the amount involved is
more than Rs. 1 crore is as below:
Name of the Branch
Name of the Party
Court in which
Amount
Latest Position/ Remarks
pending and Case Involved
Number
(Rs. in lakhs)
Fort Mumbai
Pannalal kankariya National CDRC
110.00
Alleging that the branch passed cheques
V LKB
unauthorisedly in the account of the
complainant.
2.
Cases filed against the Bank’s subsidiaries, directors, promoters, companies/ firms/ ventures promoted
by the promoters of the Bank and which are outstanding as on date:
Nil
3. Disputed Tax Liability:
As on 30.09.2003, the aggregate amount of income tax and interest tax involved in disputed cases which are at various
stages of appeal, is Rs.14.82 crores. The details are given hereunder :Sr. Date
Assessment Date of
Appeal Pending Major grounds of appeal Disputed
Tax Amount
No.
Year
Appeal
before
Amount
including Interest
(Rs. in crores) (Rs. in crores)
Income Tax Appeals
1.
1995-96
Feb , 2002 ITAT
1.02
0.47
2.
1996-97
27.04.01
ITAT
3.95
2.34
3.
1997-98
30.06.01
ITAT
1.80
0.80
4.
1998-99
16.04.02
CIT (Appeals)
6.51
3.66
5
1999-00
26/04/02
CIT (Appeals)
4.50
1.37
6
2000-01
26.06.03
ITAT
16.62
7.00
Total
34.48
15.64
Interest Tax Appeals
1.
1992-93
1.37
-0.04
2.
1993-94
2002
ITAT
2.12
-0.06
3.
1994-95
2002
ITAT
4.30
-0.13
4.
1995-96
ITAT
0.38
-0.18
5
1996-97
25.03.02
CIIT (A)
0.06
-0.01
6
1997-98
09/07/03
ITAT
0.26
-0.01
7
1998-99
ITAT
3.05
-0.06
8
1999-2000
26/04/02
CIT (A)
3.00
0.09
9
2000-01
29./04/03
CIT (A)
1.13
-0.42
This amount has been included into contingent liability; claims against bank not acknowledged as debt
Except as mentioned above, no proceedings have been launched against the Bank for any of the offences under any
enactment, irrespective of whether specified in Paragraph 1 of Part I of Schedule XIII to the Companies Act. No such
litigation or disputes are pending as on today and there are no defaults or outstanding statutory dues.
The Bank has not defaulted in meeting any statutory dues, Institutional dues and has made all payments/ refunds on
debentures/ fixed deposits. It has not defaulted on dues to holders of other debt instruments and preference shareholders.
The Bank has not defaulted in meeting dues towards payment of interest or principal on due dates to holders of Bonds
and Fixed Deposits.
Other than the above there are no disputes/ litigations towards tax liabilities or any civil or criminal prosecutions against
the Bank, its Directors and its Promoters for any offense, economic or otherwise. There are no pending proceedings
initiated for economic offences. No penalties have been imposed on the Bank by RBI or any other regulatory authority. No
proceedings is known to be contemplated by Governmental authorities except those relating to income tax disputes as
given above. No disciplinary action/ investigation has been taken by the Securities and Exchange Board of India/ Stock
Exchange against the Bank and its Directors.
53
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Other than stated above, there are no disputes/litigations towards tax liabilities or any criminal or civil prosecutions
against the Bank for any offence – economic or otherwise. No criminal proceedings have been launched against the Bank
under any of the enactment irrespective of whether specified in paragraph 1 of part I of Schedule XIII of the Companies
Act.
Interest of Directors of the Bank
The Directors of the Bank are interested to the extent of shares held by them and/or by their friends and relatives or which
may be subscribed by them and/or allotted to them by the Bank.
The Directors of the Bank are interested to the extent of fees, if any, payable to them for attending meetings of the Board
or Committee and reimbursement of travelling and other incidental expenses, if any, for such attendance as per the
Articles of Association of the Bank.
The Directors of the Bank are not interested in the appointment of or acting as Underwriters, Registrars and Bankers to
the Issue or any such intermediary registered with SEBI.
The Directors of the Bank are not interested in any property acquired by the Bank within two years of the date of
Information Memorandum or proposed to be acquired by it.
Save as stated above, no amount or benefit has been paid or given to the Bank’s Directors or Officers since its
incorporation nor is intended to be paid or given to any Directors or Officers of the Bank except the normal remuneration
and/or disbursement for services as Directors, Officers or Employees of the Bank.
XII. INVESTOR GRIEVANCE & REDRESSAL SYSTEM
The Bank has appointed CAMEO Corporate Services Limited (Address: ‘Subramanian Building’, 5th Floor, No. 1, Club
House Road, Chennai – 600 002, Tel No. (044) 28460390, Fax No. (044) 28460129, E-Mail: cameosys@satyam.net.in)
as the Registrars & Transfer Agents.
As per the arrangement with the Registrars, all complaints related to the issue will be handled by the Registrars to the
Issue within 30 days of the receipt of the complaint. The Registrars are required to redress the complaints of the
bondholder(s) in respect of









Transfer of Bonds,
Transmission of Bonds,
Non-credit of demat account on account of letter(s) of allotment,
Non-credit of demat account on account of bond certificate(s),
Dematerialisation and rematerialisation of Bonds,
Non-receipt of refund warrant(s) and/ or interest on application money,
Non-receipt of interest warrant(s),
Non-receipt of redemption warrant(s),
Non-receipt of notice(s) etc.
As on September 30, 2003, there are no complaints pending against the Bank with respect to its shareholders.
The details of the Compliance Officer of the Bank are as follows:
Mr. Rajesh Kurup
Company Secretary
Lord Krishna Bank Limited
Secretarial Department
Registered & Administrative Office,
Indian Express Building,
Kaloor, Kochi - 682 017 (Kerala).
Tel.: Direct - (0484) 2402269, Board - (0484) 2403567
Fax.: (0484) 2405021
E-Mail : compsec@lordsbank.com
The investors can contact the Compliance Officer in case of any pre-issue/ post-issue related problems such as non-credit
of letter(s) of allotment/ bond certificate(s) in the demat account, non-receipt of refund order(s), interest warrant(s)/
cheque(s) etc.
The investors can also contact the Registrars to the Issue, CAMEO Corporate Services Limited, ‘Subramanian Building’,
5th Floor, No. 1, Club House Road, Chennai – 600 002 [Tel No. (044) 28460390, Fax No. (044) 28460129, E-Mail:
cameosys@satyam.net.in] in case of queries/ complaints, if any, regarding this issue.
54
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
PART II
I.
GENERAL INFORMATION
Consents
Consents in writing from the Directors, Registrars, Bankers to the Issue and Trustees to the Issue, Directors, Compliance
Officer & Company Secretary, Sole Arranger to act in their respective capacities have been obtained by the Issuer
Company and such consents have not been withdrawn upto the date of opening of the Issue. M/s. M. R. Narain & Co, the
Auditors of the Bank have given their written consent to the inclusion of their Report in the form and context in which they
appear in the Information Memorandum Such consents and reports have not been withdrawn upto the date of opening of
the issue.
Expert Opinion
Save as stated elsewhere in this Information Memorandum, the Bank has not obtained any other expert opinion.
Changes in Directors during last three years
The changes that took place in the Board of Directors since April 01, 2000 are as follows:
Sr. No. Name
Date of change Reason for change and position held
1.
K.A. George
25.08.00
As per RBI Mandate
RBI Nominee Director
2.
J. Kasiviswanathan
19.04.01
Chairman and Managing Director of the Bank resigned for personal reasons
3.
C. Krishnamoorthy
30.06.01
8 years completed as per BR Act provision
Director
4.
P.M. Abraham
30.06.01
8 years completed as per BR Act provision
Director
5.
D.M. Puri
30.06.01
8 years completed as per BR Act provision
Director
6.
R.P. Gupta
08/06/02
MD & CEO resigned for personal reasons
7.
V.C. Burman
27.12.01
As per RBI Directon (Director MNBFC)
Director
8.
Arun Dugal
08/06/02
Personal Reasons
Director
9.
K. Ramakrishnan
19.07.03
Personal Reasons
Director
10.
C R G Nair
01/03/03
RBI Mandate
RBI Nominee Director
Changes in Auditors during last three years
Given below are the changes in the Bank’s Auditors during the past 3 years.
Sr. No. Name of the Auditor
Year of Change
Added/ Retired
1.
Balan & Company
Sept. 2001
Retired
2.
M.R. Narain & Company
28.09.01
Added
Reason
As per BR Act provision
Authority for the Present Issue
This present issue of Bonds is being made pursuant to the Resolutions passed at the Annual General Meeting held on
05.08.2003 and subsequently the meeting of the Board of Directors held on 17.11.2003.
The present issue of Bonds is being made in accordance with extant RBI guidelines vide its circular no. DBOD.
BP.BC.5/21.01.002/98-99 dated 08-02-1999 for issue of Tier-II Bonds as amended from time to time. The Bank can
undertake the activities proposed by it in view of the present approvals and no further approval from any government
authority(ies)/ Reserve Bank of India (RBI) is required by the Bank to undertake the proposed activities save and except
those approvals which may be required to be taken in the normal course of business from time to time.
Disposal of Applications and Application Money
The Board of Directors/ Committee of Directors of the Bank reserves its full unqualified and absolute discretion without
giving any reason, the right to accept or reject any application in whole or in part. If any application is rejected in full, the
whole of the application money received, and if the application is rejected in part, the excess application money, after
adjustment of allotment money if any, will be refunded to the applicants by registered post only (refund order(s) of value
upto Rs. 1,500/- will be sent under certificate of posting). Adequate funds for the purpose shall be made available by the
Bank to the Registrar to the Issue.
No receipt will be issued by the Bank. However, the nominated branches of the Bankers to the Issue receiving the
application will acknowledge the receipt of the application by stamping and returning the detachable acknowledgement
slip appended to each application form. Refund (if any) will be made by cheque/ demand draft drawn on the Bank at
Mumbai and payable at par at all the places where applications are accepted.
Procedure and Time Schedule for Allotment/ Refund
The beneficiary account of the investor(s) with National Securities Depository Limited (NSDL)/ Central Depository
Services (India) Limited (CDSL)/ Depository Participant will be given initial credit within 15 days from the Deemed Date of
Allotment. The initial credit in the account will be akin to the Letter of Allotment. On completion of all the statutory
formalities, such credit in the account will be akin to a Bond Certificate.
55
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Letter(s) of Regret alongwith Refund Order(s), as the case may be, will be despatched by Registered Post or as per
extant postal rules at the sole risk of the applicant to the sole/ first applicant within 15 days of closer of the Issue. In
accordance with the extant postal rules the Bank will ensure dispatch of refund orders of value upto Rs. 1500/- under
Certificate of Posting and refund orders of value above Rs. 1500/- by Registered Post only. The Bank will provide
adequate funds to the Registrars to the Issue, for the purpose of despatch of Letter(s) of Regret/ Refund Order(s).
Subject to the completion of all legal formalities within 3 months from the Deemed Date of Allotment, or such extended
period as may be approved by the Appropriate Authorities, the initial credit akin to a Letter of Allotment in the Beneficiary
Account of the investor would be replaced with the number of Bonds allotted which will be akin to a Bond Certificate.
In case of joint applications, refund/ pay orders, if any, will be made out in the first name and all communications will be
addressed to the person whose name appears first in the application form.
Oversubscription and Basis of Allotment
The Board of Directors/ Committee of Directors reserves its full, unqualified and absolute right to accept or reject any
application, in part or in full, without assigning any reason thereof. The rejected applicants will be intimated along with the
refund warrant, if applicable, to be sent. Interest on application money will be paid from the date of realisation of the
cheque(s)/ demand drafts(s) till one day prior to the date of refund. The Application Forms that are not complete in all
respects are liable to be rejected and would not be paid any interest on the application money. Application would be liable
to be rejected on one or more technical grounds, including but not restricted to:
a. Number of bonds applied for is less than the minimum application size;
b. Applications exceeding the issue size;
c. Bank account details not given;
d. Details for issue of bonds in electronic/ dematerialised form not given;
e. PAN/GIR and IT Circle/Ward/District not given;
f. In case of applications under Power of Attorney by limited companies, corporate bodies, trusts, etc. relevant
documents not submitted;
g. In the event, if any Bond(s) applied for is/ are not allotted in full, the excess application monies of such Bonds will be
refunded, as may be permitted.
In the event of issue being oversubscribed, the Bank reserves its full, unqualified and absolute right of allotment/ rejection
in full or prorata at its discretion without assigning any reason thereof. However the broad basis to be followed by the
Bank would be as under:
At the end of each banking day during the currency of the issue, a sum of total subscription amount realised and credited
to Issuer Company’s account would be ascertained by the Issuer Company and if the cumulative realised amount upto
that date is less than or equal to Rs. 60 crore, then all the applicant(s) till that date would be given full and firm allotment.
For the amounts credited to the Issuer Company’s account on the day wherein the cumulative credit exceeds Rs. 60
crore, allotment will be made on pro-rata basis based on balance amount available for allotment on that day. The
allotment shall be subject to rounding-off to the nearest multiple of marketable lot (i.e. in multiples of 1 Bond).
Interest on Application Money
Interest at the respective coupon rate (i.e. @ 7.00% p.a. under Option-I and @ 7.10% p.a. under Option-II) (subject to
deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or reenactment thereof, as applicable) will be paid to all the applicants on the application money for the Bonds. Such interest
shall be paid from the date of realisation of cheque(s)/ demand draft(s) upto one day prior to the Deemed Date of
Allotment. The interest on application money will be computed on an Actual/ 365 day basis. Such interest would be paid
on all the valid applications, including the refunds. Where the entire subscription amount has been refunded, the interest
on application money will be paid alongwith the Refund Orders. Where an applicant is allotted lesser number of bonds
than applied for, the excess amount paid on application will be refunded to the applicant alongwith the interest on
refunded money.
The interest cheque(s)/ demand draft(s) for interest on application money (alongwith Refund Orders, in case of refund of
application money, if any) shall be dispatched by the Bank within 15 days from the Deemed Date of Allotment and the
relative interest warrant(s) alongwith the Refund Order(s), as the case may be, will be dispatched by registered post to the
sole/ first applicant, at the sole risk of the applicant.
56
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
STATUTORY AUDITORS
M/s. M. R. Narain & Co.
Chartered Accountants
New No. 5, First Floor,
Club Road, Chetput,
Chennai – 600 031.
Tel No. (044) 28362150,28361556
Fax No. (044) 2871391
E-mail: mrnarainco@eth.net
SOLE ARRANGER TO THE ISSUE
A. K. Capital Services Limited
135 & 136, 13th Floor, Free Press House,
Free Press Journal Marg,
215, Nariman Point,
Mumbai - 400 021.
Tel No. (022) 56349300.
Fax No. (022) 56360977.
E-mail: akcap@bom9.vsnl.net.in
REGISTRAR TO THE ISSUE
CAMEO Corporate Services Limited
‘Subramanian Building’, 5th Floor,
No. 1, Club House Road,
Chennai – 600 002.
Tel No. (044) 28460390.
Fax No. (044) 28460129.
E-Mail: cameosys@satyam.net.in
TRUSTEES FOR THE BONDHOLDERS
The Western India Trustee & Executor Company Limited
161/C, 16th Floor, Mittal Court,
Nariman Point,
Mumbai – 400 021.
Tel No. (022) 22880986, 22880988.
Fax No. (022) 22816477.
E-mail: witco@vsnl.net
BANKERS TO THE ISSUE
Lord Krishna Bank Limited
Registered & Administrative Office,
Indian Express Building,
Kaloor, Kochi - 682 017 (Kerala).
Tel.: (0484) 2403567-70, 2400153
Fax.: (0484) 2403577/2400869
E-Mail : ao@lordsbank.com
COMPLIANCE OFFICER AND COMPANY SECRETARY
Mr. G. Rajesh Kurup
Company Secretary
Lord Krishna Bank Limited
Secretarial Department
Registered & Administrative Office,
Indian Express Building,
Kaloor, Kochi - 682 017 (Kerala).
Tel.: Direct - (0484) 2402269, Board - (0484) 2403567-70
Fax.: (0484) 2405021
E-Mail : compsec@lordsbank.com
BROKERS TO THE ISSUE
Apart from Sole Arranger to the Issue appointed by the Issuer Company, there is/are no other broker(s) appointed by the
Issuer Company for the purpose of marketing the Issue. Therefore no person/ firm/ company other the Sole Arranger to
the Issue, whether member of recognised stock exchange(s) or otherwise, can act as Brokers to the Issue.
57
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
CREDIT RATING AGENCY
Credit Research & Analysis Limited
Kalpataru Point, 2nd Floor, Kamani Marg,
Sion (East), Mumbai – 400 022. India
Tel.: (022) 56602871-75 / 2402 4541-43
Fax: (022) 56602876
E-mail: care@careratings.com
Website: http:www.careratings.com
58
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
II.
FINANCIAL INFORMATION
AUDITOR’S REPORT
To
The Board of Directors
Lord Krishna Bank Limited
Registered & Administrative Office,
Indian Express Building,
Kaloor, Kochi - 682 017 (Kerala).
Dear Sirs,
In terms of our appointment for the purpose of certification of the statement of accounts to be incorporated in the
Information Memorandum proposed to be issued by the Bank in connection with the Private Placement of Unsecured
Redeemable Non-Convertible Non-Cumulative Subordinated Bonds aggregating upto Rs. 50 crores, we state as follows:
a)
We have examined the Audited accounts of the Bank for the five financial years ended on March 31, 2003 being the
last date upto which the accounts of the Bank have been made up and audited by the Auditors of the Bank of those
respective years.
b)
We have also conducted limited review of the financial results of the Bank for the half year ended September 30,
2003 in terms of the Reserve Bank of India circular DBS. ARS. No. BC 13/08.91.001/2000-01 dated May 17, 2001
and DBS. ARS. No. BC. 4/08.91.001/2001-02 dated October 25, 2001.
The aforesaid financial statement for the Half Year ended 30/9/03 incorporate the relevant returns of 7 branches
reviewed by us and unreviewed returns in respect of 91 branches and 3 controlling offices. In conduct of our review,
we have taken note of review reports in respect of the Non-Performing Assets received from the Concurrent Auditors
of 14 branches. These review reports cover 83.26% of the Advances portfolio of the Bank.
c) A review of the financial results consists principally of applying analytical procedures to financial data and making
enquiries of person responsible for financial and accounting matters. It is substantially less in scope of an audit conducted
in accordance with the generally accepted auditing standards, objective of which is an expression of opinion regarding the
financial statements as a whole. Accordingly we have not performed an audit and we have not expressed an audit
opinion.
1. We further report as follows:
1.1 The Profit & Loss of Lord Krishna Bank Limited for the half year ended September 30, 2003 (reviewed) and each
of the five financial years ended on March 31, 2003 (audited) are as set out in Part I enclosed.
1.2 The Assets and Liabilities of Lord Krishna Bank Limited as at September 30, 2003 (based on the Balance Sheet as
approved by the Management) which have not been audited and for each of the five financial years ended March
31, 2003 (audited) are as set out in Part II enclosed.
1.3. The aforesaid statements of Profit & Loss and Assets & Liabilities:
(ii) read together with Significant Accounting Policies and Significant Changes in Accounting Policies as set out in
Part-III, Material Notes on Accounts and Notes on Adjustments as set out in Part IV and subject to auditor’s
qualifications for which no adjustments could be carried out, as set out in Part V, have been drawn after giving
effect to adjustments and regrouping as and where, in our opinion, considered appropriate and
(iii) have been prepared by the Bank in accordance with the guidelines issued by the Reserve Bank of India from
time to time and subject to the limitations of disclosures required under the Banking Companies (Acquisition &
Transfer of Undertakings) Act, 1980.
2. Lord Krishna Bank Limited has no subsidiary and therefore there is no provision of providing data regarding the
statements of Profit & Loss, Assets and Liabilities of the subsidiary/ co-promoted company of the Lord Krishna Bank
for each of the five financial years ended on March 31, 2003 and for the half year ended September 30, 2003 or
Significant Accounting Policies, Changes in Accounting Policies, Material Notes & subject to Notes on Adjustments
and Qualifications of the auditors for which no adjustments could be carried out etc. Further as there is no subsidiary
of the Lord Krishna Bank there is no data to be provided against the amount of dividend transferred to the
shareholders by Lord Krishna Bank Limited and the dividend cleared by its subsidiary.
for and on behalf of
M/s. M. R. Narain & Co.
Chartered Accountants
sd/(P. Anand)
Partner
Place: Chennai
Date: February 04, 2004.
59
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
PART I – STATEMENT OF PROFIT AND LOSS
For the Year/ Period ended
INCOME
1. Interest Earned
1.1
Interest/ Discount on Advances/ Bills
1.2
Income on Investments
1.3
Interest on Balances with RBI and other Inter-Bank Funds
1.4
Interest on Income Tax
1.5
Others
Other
2
Income
2.1
Commission, Exchange & Brokerage
2.2
Profit on Sale of Investments (Net)
2.3
Profit on Revaluation of Investments (Net)
2.4
Profit on Sale of Land, Buildings & Other Assets (Net)
2.5
Profit on Exchange Transactions (Net)
2.6
Income from Dividends
2.7
Miscellaneous Income
Total Income
EXPENDITURE
1. Interest Expended
1.1
Interest on Deposits
1.2
Income on Balances with RBI/ Inter-Bank Borrowings
1.3
Interest on Tier-II Bonds
1.4
Others
2. Operating Expenses
2.1
Payment to and Provisions for Employees
2.2
Rent, Taxes & Lighting
2.3
Printing & Stationery
2.4
Advertisements & Publicity
2.5
Depreciation on Bank’s Properties
Less Transfer from Revaluation Reserve
2.6
Directors’ Fees, Allowances and Expenses
2.7
Auditor’s Fees and Expenses
2.8
Law Charges
2.9
Postage, Telegrams and Telephones
2.10 Repairs and Maintenance
2.11 Insurance
2.12 Other Expenditure
Total Expenditure
Gross Profit Before Provision for Tax & Extraordinary Items
Less : Extraordinary Items
Gross Profit Before Provision for Tax
Provisions & Contingencies *
Net Profit/ (Loss) For The Year
Add: Balance of Profit/ (Loss) Brought Forward
Less: Floating Provision for NPA
Prior Period Adjustment
Profit Available for Appropriation
APPROPRIATIONS
Transfer to Statutory Reserve
Transfer to Capital Reserve
Transfer to/ (from) Investment Fluctuation Reserve
Other reserves
Proposed Dividend
Tax on Dividend
Balance Carried Over to Balance Sheet
(Rs. in Crores)
March 31, March 31,
2002
2003
March 31,
1999
March 31,
2000
March 31,
2001
61.86
34.66
1.48
Nil
---
58.44
37.49
1.32
Nil
---
75.66
45.19
1.4
Nil
1.19
75.74
62.53
5.24
Nil
0.61
86.22
63.75
5.33
Nil
0.21
40.17
32.01
3.29
Nil
0.25
5.22
2.41
--------6.06
111.69
5.76
9.62
--------3.54
116.17
10.58
5.58
--0.05
----4.83
144.48
8.82
60.54
----1.81
--4.15
219.44
8.24
47.96
--0.01
2.58
--8.59
222.89
4.54
24.05
----1.36
--3.06
108.73
76.07
0.03
--8.76
75.69
0.04
--6.93
95.68
2.52
--4.96
122.07
2.41
--6.38
124.72
0.81
--3.64
62.5
0.12
--1.81
9.44
3.17
0.21
0.1
2.76
--0.06
0.02
0.07
0.50
0.07
0.34
1.69
103.28
8.41
Nil
8.41
7.13
1.28
0.40
--0.40
2.08
10.68
2.74
0.18
0.13
1.73
--0.06
0.03
--0.46
0.04
0.38
2.50
101.59
14.58
Nil
14.58
8.21
6.37
0.09
--Nil
6.46
13.81
3.66
0.44
1.37
1.55
--0.1
0.04
0.07
0.70
0.13
0.51
3.76
129.30
15.18
Nil
15.18
10.17
5.01
1.76
--0.36
7.13
16.4
7.27
0.79
1.16
2.76
--0.02
0.11
0.08
1.07
0.39
0.36
7.66
168.93
50.51
Nil
50.51
30.8
19.71
1.66
--Nil
21.37
18.09
8
0.97
1.16
4.06
--0.03
0.2
0.08
1.10
0.54
0.84
7.29
171.53
51.36
Nil
51.36
28.31
23.05
1.5
_ 0.80
0.06
23.81
9.97
4.3
0.27
0.84
2.32
--0.03
0.07
0.04
0.84
0.35
0.37
5.47
89.30
17.43
Nil
17.43
7.18
10.25
0.70
--1.99
12.94
0.78
------1.11
0.11
0.08
1.75
----0.16
2.29
0.5
1.76
1.5
----1
2.69
0.27
1.67
6.0
1.1
6.3
1.0
5.48
--1.5
4.61
2.3
4.7
--10.19
1.31
0.7
1.15
--1.99
------9.80
*Details of provisions and contingencies debited to profit and loss account during the said years:
For the Year/ Period ended
March 31,
1999
March 31,
2000
March 31,
2001
March 31,
2002
Sept. 30,
2003
Rs in Crore
March 31,
Sept. 30,
2003
2003
60
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Bad & Doubtful Debts
Depreciation on Investment/ (Written Back)
Gratuity
Legal Expenses
Stationery Wastage
Fraud & Forgery
Wealth Tax
Intangible Assets
Debit Note Receivable
Pension
Leave encashment
Interest Tax
Income Tax
Deferred Tax Asset
Deferred Tax Liabilities
Revenue Suspense
Standard Advances
Staggered provision on Standard Assets
Staff Welfare Fund
General Provisions
Other Assets
R&D Fund
Wage Arrears
Restructured Accounts
Total
4.36
0.12
---------------------------1.12
1.1
---------------------0.43
---------7.13
5.84
------------------------------1.2
0.97
---------------------0.2
---------8.21
8.66
0.69
---------------------------------0.02
---------------------0.81
---------10.18
26.25
-0.67
---------------------------------3.2
---------------------2.03
---------30.81
14.47
3.2
---------------------------------5.9
---------------------4.74
---------28.31
5.67
-1.99
---------------------1
0.43
------2
---------0.07
---------0
---------7.18
61
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
PART II – STATEMENTS OF ASSETS AND LIABILITIES
As on
A Assets
1.
Cash in Hand
2.
Balance with RBI
3.
Balances with Bank in India
Balances with Bank outside India
4.
Money at Call & Short Notice
5.
Investments in India
Investments outside India
Total Investments
Advances
6.
Advances in India
Advances outside India
Total Advances
7.
Fixed Assets
8.
Other Assets
TOTAL (A)
B Liabilities
1.
Demand Deposits
From Banks
From Others
2.
Savings Deposits
3.
Term Deposits
From Banks
From Others
Total Deposits (1+2+3)
4.
Borrowings
In India
Outside India
Total Borrowings
5.
Other Liabilities & Provisions
Other Liabilities & Provisions
Subordinate Debts
Sub-total
TOTAL (B)
C NET ASSETS (C = A–B)
Represented by:
D Share Capital
E Reserve & Surplus
1.
Share premium
2.
Statutory Reserve
3.
Capital Reserve
4.
Investment Fluctuation Reserve
5.
Revenue & other Reserves
6.
Balance of Profit and Loss Account (Adjusted)
TOTAL (E)
F TOTAL (D+E)
G Contingent Liabilities
Claims against the Bank not acknowledged as debts
Liability for partly paid Investments
Liability on account of forward exchange contracts
Guarantees given on behalf of constituents
Acceptances, endorsements and other obligations
Other items for which the Bank is contingently liable
Total (G)
BILLS FOR COLLECTION
(Rs. in Crore)
March 31,
1999
March 31,
2000
March 31,
2001
March 31,
2002
March 31,
2003
Sept. 30,
2003
7.04
106.29
21.87
---10.00
246.85
------367.64
---------9.88
22.12
791.69
10.58
52.99
48.79
---20.13
364.5
------485.52
---------7.82
47.01
1037.34
16.02
60.63
42.03
26.46
58
546.76
------585.52
---------11.34
63.52
1410.28
9.62
87.23
34.8
39.85
10.00
629.41
------826.17
---------16.86
70.94
1724.88
14.48
115.55
72.21
11.98
0
662.68
------915.04
---------16.78
48.95
1857.67
13.32
154.48
73.38
5.84
0
962.96
------708.13
---------19.62
58.63
1996.36
3.21
42.22
59.58
0.69
62.78
76.43
2.52
61.21
89.45
---82.56
99.99
0.09
87.02
110.32
0.03
75.21
118.62
10.49
552.27
----
33.84
708.27
----
70.53
1003.47
----
70.53
1249.5
----
109.15
1356.71
----
107.72
1488.7
----
32.39
-------
19.58
-------
31.15
-------
4.63
-------
1.93
-------
0.74
1.79
----
31.68
20.00
---751.84
39.85
65.50
20.00
---987.09
50.25
49.11
44.38
---1351.87
58.41
65.02
44.38
---1616.41
108.47
48.79
24.38
---1738.39
119.28
47.65
24.38
---1864.84
131.52
19.47
23.48
26.86
56.69
56.69
56.69
5.22
8.17
0.17
---6.74
0.08
20.38
39.85
8.03
9.92
0.17
---6.90
1.75
26.77
50.25
10.4
11.42
0.17
---7.9
1.66
31.55
58.41
16.39
17.42
1.27
6.3
8.9
1.5
51.77
108.47
16.39
22.03
3.57
11
8.9
0.7
62.59
119.28
16.39
23.18
3.57
12.99
8.9
9.8
74.83
131.52
1.77
------77.43
17.53
---96.73
----
6.12
------87.46
10.14
---103.72
----
9.5
------90.43
57.94
---157.87
----
11.11
---110.70
110.05
74.29
---306.15
----
18.8
---100.81
143.27
69.11
---332
----
17.46
---99.84
135.38
69..69
---322.37
----
PART III
SIGNIFICANT CHANGES IN ACCOUNTING POLICIES BETWEEN 01.04.1998 AND 30.09.2003
 The financial results are based on the same set of Accounting Policies followed for the annual accounts for the year ended March
31, 2003.
 Provisions for NPA and taxation for the Half year ended Sept 2003 and year to date September 30, 2003 are considered on
estimation basis.
 Appropriation of profits towards Investment Fluctuation Reserve (including Rs. 198.91 lacs being excess depreciation on
“Available for Sale” category of investment withdrawn and credited to Provisions and Contingencies Account) is not considered in
the Financial results
 This being the first year of half yearly review, amounts for corresponding half-year for the previous year ended 30.09.02 furnished
are unaudited.
 As a prudential measures, with a view to build up additional provision in respect of Non-Performing Advances, the Bank has
made a provision of Rs. 30 lacs in excess of the minimum provision prescribed by the Reserve Bank of India. The same has been
considered as a part of provision for computing Net NPA and Net NPA percentages.
62
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.

Qualificiations of auditors in financial statements which have bearing on the profits for the year ended 31.03.03 and treatment of
the same in the financial results for the quarter ended 30.09.03 (year to date 30.09.03) are as follows:
Auditors remarks for the year ended 31.03.03
Treatment / Position for the half year ended 30.09.2003
a. Financia;l effect on accounts arising out of unreconciled and With reference to position as on 31.03.03 except two debit entries
outstanding items of Inter Branch accounts, Deman Draft
aggregating to Rs. 2590/- only there are no debit outstanding
Accounts etc. are not ascertainable
entries without corresponding credit entry. As such there is no
impact on the profit figure with reference to position as on
31.03.03. IBR reconciliation has been completed upto 31.07.03.
b. Short provision of gratuity liability amounting to Rs. 110.50
GRATUITY:
lakhs and short provision of pension liability amounting to Rs.
The gratuity fund has increased on account of interest accrued to
618.28 lakhs and consequent effect on liabilities and profit to
an extant of Rs. 8.62 lakhs during the Half year ended 30.09.03.
that extent. Accounting Policy No. 7 is not in line with AS – 15
The current liability of Rs. 17.17 lacs has been met on cash basis.
on “Accounting for Retirement Benefits” issued by the ICAI
The shortfall in the gratuity fund compared to the acturial valuation
will be bridged by way of additional contribution during the year
and meeting out the current liability/payment on cash basis.
PENSION:
The Bank has made following contribution/provision towards
pension fund during the Half year ended 30.09.03.
i) Additional Provision : Rs. 100.00 lacs
ii) Contribution
: Rs. 34.59 lacs
iii) Interest accrued for
Half year
: Rs. 29.51 lacs
--------------------------Total
: Rs. 164.10 lacs
iv) The current liability of Rs. 31.68 lacs has been met on cash
basis. The short fall in pension fund compared to the acturial
valuation will be met by way of additional contributions to pension
fund and meeting the current laibility / payment on cash basis.
c. Accounting policy No. 6 regarding accounting of foregin
The Bank follows FEDAI guidelines as permitted by RBI
exchange transactions is not in line with AS – 11 on “Accounting
for Foreign Exchange Transactions” issued by the ICAI
The Bank has followed consistently the Accounting policies same
d. Recognition of some items of income and expenditure on
as previous years and there is no change.
cash basis as referred to in Accounting Policy No. 8 are not in
line with AS – 9 on “Revenue Recognition” issued by the ICAI.
The quantum is not ascertainable.
Accounting Policy referred to above:
Revenue Expenditure:
a. Income is generally accounted on accrual basis except in
the case of Non – performing assets where income is
recognized on realisation as per the guidelines of RBI.
b. Recoveries in Non-performing advances are appropriated
first towards arrears of instalments in term loans and principal
irregularity in other accounts.
c. Fees, Commissions, Exchanges / Discounts, Brokerage,
Locker Rent etc. are normally recognised as income on
realization.
7.The Income Tax Assessments upto AY 2000 – 01 have been completed. The Interest Tax Assessments are up to date.
Provision has been made for all the admitted demands abd to the extant considered necessary taking into account the
favourable decisions of judicial / appellate authorities. Disputed Income Tax / Interest Tax demands to the extant of
Rs. 1536.26 lacs relating to previous years not accepted by the Bank and against which its appeals are pending and in
respect of which the Bank is expecting favourable decisions from appellate authorities, gave been treated as Contingent
Liabilities not provided for.
PART IV
A. MATERIAL NOTES ON ACCOUNTS
1.Confirmation/ Reconciliation and clearance of outstanding entries in Inter Branch adjustments, Demand Draft Accounts
and balance with other banks are in progress in certain Branches/ Departments. Initial processing of transactions
between Head Office and Branches and Inter Branch transactions upto 30.09.2003 has been completed. Pending
final clearance/ adjustment in respect thereof the overall financial effect on the accounts not ascertainable at this
stage. Balancing of subsidiary ledgers are uptodate in all branches.
2. Demand of Income Tax and Interest Tax amounting to Rs. 2060.32 lakhs as on 31/03/03 for the various earlier years
have been disputed by the Bank before appellate authorities. As per expert opinion the decisions will be in favour of
the Bank. As the final liability is unascertainable at this stage, no provision has been made for the same. This
amount has reduced to Rs.1576 lacs on 30.09.2003.
63
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
3.
4.
5.
6.
Liability towards gratuity based on actuarial calculations as on 31.03.2003 amounts to Rs. 455.10 lacs. The Bank
has been meeting the commitment year to year on cash basis besides making annual provision on this account and
the cumulative balance as on 31.03.2003 in the gratuity fund is Rs.344.60 lacs which was increased to Rs.353.22
lacs as on 30.09.2003.
Liability towards Pension payment on actuarial calculation as on 31.03.2003 amounts to Rs. 1504.35 lacs. The Bank
has been meeting the commitment year to year on cash basis besides making annual provisions on this account and
the cumulative balance as on 31.03.2003 in the pension account is Rs. 886.07 lacs. Additional provisions as on
30.09.03 amounting to Rs. 100.00 lacs.
Liability towards leave encashment on acturial calculation as on 31.03.03 amounts to Rs. 200.47 lacs against which
provision has been made as on 30.09.03 amounting to Rs. 43.00 lacs.
Capital Adequacy
as on 30.09.2003
as on 31.03.2003
a.Capital to Risk Assets Ratio (CRAR)
15.75%
b.Tier I Capital to Risk Asset Ratio
12.75%
c.Tier II Capital to Risk Asset Ratio
3.00%
Ratios are worked out on the basis of Reserve Bank of India Guidelines.
12.82%
10.03%
2.79%
As on Sept. 30, 2003 As on March 31,
2003
7. Additional Disclosures
a.
Net NPAs as percentage to Net Advances
9.88%
b.
Provisions & Contingencies in Profit & Loss A/c
i.
Provisions made towards NPAs
56700
ii.
Provision for Depreciation in Investments
-------iii. Provisions for Taxation
20000
iv. Bad Debts written off
-------v.
Investments written off
-------vi. Lease Assets/ Accounts written off
-------vii. Other Provisions & Contingencies
15000
Viii. Less: Excess Provision on Investment written back
-19900
ix. Less: Excess Provision on others written back
-------TOTAL (i to ix)
71800
Provision for Deferred Tax Liability
-------c.
Sub-ordinated debt raised as Tier II Capital
243770
d.
Business Ratios
i.
Interest Income as a percentage to average working funds
(Annualised)
8.34%
ii.
Non-interest Income as a percentage to average working
funds
3.64%
iii. Net Interest Income (i.e. Interest Income minus interest
expenditure) as a percentage to average working funds
1.24%
iv. Operating Profit as a percentage to average working
funds(Annualised)
2.14%
v.
Return on Assets (Annualised)
1.34%
vi. Return on Equity (Annualised)
16.34%
vii. Business (Deposits and Advances) per Employee
22692
viii. Profit Per Employee
186
8. Lending to Sensitive Sectors
September 30, 2003
Amount
As % Advance
(Rs. in crore)
i.
Capital Market Sector
9.5
0.99
ii.
Real Estate Sector
13.4
1.39
iii.
Commodities Sector
--------------9. Investment in Capital Market
i.
ii.
Iii.
Iv.
Equity Shares
Preference Shares
Convertible Debentures
Equity Oriented Mutual Funds
Amount
(Rs. in crore)
6.81
--------------1
(Rs. 000’ omitted)
As on March, 31,
2002
6.33%
9.85%
31000
32008
59000
113727
2750
23024
38133
(2750)
(13795)
283097
8000
243770
--32000
262452
--21842
(6709)
(1500)
308085
-443770
9.50%
9.19%
4.12%
4.80%
1.61%
0.85%
3.14%
3.22%
1.77%
1.26%
20.24%
23.63%
26417
24641
236
209
March 31, 2003
Amount
As % Advance
(Rs. in crore)
10.02
1.10%
23.35
2.55%
8.72
0.95%
March 31, 2003
Amount
(Rs. in crore)
0.46
0.00
0.00
0.80
64
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
10. Movements of NPAs
Amount
(Rs. in crore)
A i.
ii.
Iii.
Iv.
B i.
ii.
iii.
iv.
v.
C i.
ii.
Amount
(Rs. in crore)
Gross NPAs as at beginning of the period
Add: New Accretion to NPAs during the
period
Less: Reduction (due to upgradation/
closure/ compromise/ written off)
Gross NPAs as at end of the period (i+ii-iii)
84.36
104.70
28.5
28.13
10.82
48.47
84.36
102.04
----------------------------32.1
57.93
69.94
Provision as on beginning of period
Add: During the period
Less: Amount recovered/ written off
Net addition during the period (ii-iii)
Provision as on end of period (i+iv)
Net NPA as on beginning of period
Net NPA as at end of period
23.33
19.19
16.09
3.10
26.43
81.37
57.93
11. Movement of Provisions held towards depreciation on Investments
i.
Provisions as on beginning of period
ii.
Add: Provisions made during the period
iii.
Less: Write off/ write back of excess provisions during the period
iv.
Provision as on end of period (i+ii-iii)
September 30, 2003
3.73
-------1.99
1.74
March 31, 2003
0.81
3.20
0.28
3.73
12. Maturity pattern of Assets and Liabilities
Maturity Pattern
1 to 14 days
15 to 28 days
29 days to 3 months
> 3 months to 6 months
> 6 months to 1 year
> 1 year to 3 years
> 3 years to 5 years
> 5 years
TOTAL
Deposits
Sept 19, March 31,
2003
2003
163.21
124.85
26.1
38.79
194.8
208.24
176.82
140.18
332.98
330.14
372.31
400.50
250.86
215.38
221.17
205.21
1738.25
1663.29
Advances
Sept 19, March 31,
2003
2003
16.23
76.17
20.32
121.73
109.96
123.68
61.03
46.58
109.19
138.01
251.8
276.62
63.64
46.85
80.13
85.40
712
915.04
Investments
Sept 19, March 31,
2003
2003
42.25
8.02
44.1
8.02
42.68
11.57
2.66
1.20
35.68
38.97
32.91
51.47
62.95
25.63
732.48
517.79
985.71
662.67
Foreign Assets
Sept. 30, March 31,
2003
2003
--------1.90
--------10.08
--------0.00
--------0.00
--------0.00
--------0.00
--------0.00
--------0.00
--------11.98
Current Liabilities
Sept. 30, March 31,
2003
2003
--------0.00
--------0.02
--------0.52
--------0.36
--------2.42
--------5.15
--------0.00
--------0.00
--------8.47
Borrowings
Sept. 30, March 31,
2003
2003
--------0.93
--------0.00
0.04
0.04
0.14
0.22
0.25
0.19
0.3
0.25
--------0.30
--------0.00
--------1.93
Note:
a.The maturity profile has been derived from ALM statement prepared for 30.09.2003 and for 31.03.2003
b.The data obtained from computerised branches have been extrapolated for the Bank as a whole. 88% of the business of the Bank is
through computerised systems.
c.The Balance under Savings, Current, Over Draft and Cash Credit have been distributed as per RBI guidelines for ALM statements.
13. Performance on Business Segments
Part A: Business Segments
Particulars
Revenue
Result
Unallocated Expenses
Operating Profit
Income Taxes
Extraordinary Profit/ Loss
Net Profit
Other Information
Segment Assets
Unallocated Assets
Total Assets
Segment Liabilities
Unallocated Liabilities
Total Liabilities
Treasury
(Rs. in crore)
March 31, 2003
119.84
45.84
Other Banking
Operations
March 31, 2003
102.97
39.22
Residual
operations
March 31, 2003
0.08
0.08
0.00
0.00
0.00
748.76
934.04
0.07
665.98
854.06
1.21
Total
March 31, 2003
222.89
85.14
56.19
28.95
5.90
0.00
23.05
1682.87
174.80
1857.67
1521.25
217.14
1738.39
65
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
14.
Related party transactions as per Accounting Standard – 18 (AS-18) issued by the Institute of Chartered
Accountants of India are as follows:
(Rs.
000’ omitted)
(i) Associates
Mohan Exports (Inda) Pvt. Ltd.
(ii) Key Management Personnel
Name
Mr. R. M Nayak
Mr. V. K. Gupta
Designation
Managing Director & CEO
Dy. Managing Director
Payment for rendering services
411
23
Borrowings:
Maximum during the year As on 31.03.2003
-457
As on 31.03.2003
-348
As on 30.09.2003
------------15. Restructured/ Rescheduled Loans
Particulars
a. Total amount of loan assets subjected to restructure during the year
b. Amount of Standard Assets included in (a) above
c. Amount of substandard Assets included in (a) above
(Rs. 000’ omitted)
March 31, 2003
102098
101268
830
16. Information on Earnings per Share
Particulars
Sept. 30, 2003
Earning for the year (Rs. in thousands)
102564
Number of Shares (in thousands)
56629
Basic & Diluted EPS (Annualised)
3.62
17. The Statement of Principal Accounting Policies form an integral part of these accounts.
18. Previous Year’s Figures have been regrouped or rearranged wherever necessary.
March 31, 2003
230530
56629
4.07
B. NOTES ON ADJUSTMENTS ( 31.03.2003)
1. Confirmation / Reconciliation and clearance of outstanding entries in Inter branch adjustments, Demand Draft
accounts and balance with other banks are in progress in certain Branches / Departments. Initial processing of
transactions between Head Office and Branches and Inter Branch transactions upto 31.03.2003 has been
completed. Pending final clearance / adjustment in respect there of the overall financial effect on the accounts not
ascertainable at this stage. Balancing of subsidiary ledgers are uptodate in all branches.
2. Demand of Income Tax and Interest Tax amounting to Rs. 2060. 32 lakhs for the various earlier years have been
disputed by the Bank before appellate authorities. As per extant opinion the decisions will be in favour of the Bank.
As the final liability is unascertainable at this stage, no provisions has been made for the same.
3.
Liability towards gratuity based acturial calculations as on 31.03.2003 amounts to Rs. 455.10 lacs. The Bank has
been meeting the commitment year to year on cash basis besides making annual provision on this account and the
cumulative balance as on 31.03.2003 in the gratuity fund is Rs. 344.60 lacs.
4. Liability towards Pension payment on actuarial calculation as on 31.03.2003 amounts to Rs. 1504.35 lacs. The
Bank has been meeting the commitment year to year on cash basis besides making annual provisions on this
account and the cumulative balance as on 31.03.2003 in the pension account is Rs. 886.07 lacs.
NOTES ON ADJUSTMENTS (30.09.2003)
1. The financial results are based on the same set of Accounting policies followed for the annual accounts for the year
ended March 31st, 2003.
2. Provisions for NPA and taxation for the half year ended September 30, 2003 and year to date September 30, 2003 are
considered on estimation basis.
3. Approtionment of profits towards Investment Fluctuation Reserve (including Rs. 198.91 lakhs being excess depreciation
on “ Available for Sale” category of investment withdrawn and credited to provisions and Contigencies Account) is not
considered in the financial results.
4. This being the first year of half-yearly review, amounts for corresponding half-year for the previous year ended 30.09.02
furnished are unaudited.
5. As a prudential measure, with a view to build up additional provision in respect of Non Performing Advances, the Bank
has made a provision of Rs. 30 lakhs in excess of the minimum provision prescribed by the Reserve bank of India. The
same has been considered as a part of provision for computing Net NPA and Net NPA percentages.
6. Qualifications of auditors in financial statements which have bearing on the profits for the year ended 31.03.2003 and
treatment of the same in the financial results for the quarter ended on 30.09.2003 (year to date 30.09.03) are as
follows.
PART V
66
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
AUDITORS QUALIFICATIONS FOR WHICH ADJUSTMENTS COULD NOT BE CARRIED OUT
1. The financial effect, if any, on the accounts arising out of unreconciled and outstanding items of Inter Branch
Accounts,Demand Draft Account etc. which is not ascertainable.
2. Under provision of liability towards Gratuity amounting to Rs. 259.83 lacs and under provision of liability towards
Pension amounting to Rs. 241.23 lacs being difference between acturial valuation and the provision made in the
accounts and the consequent effect on liabilities and profit to that extent.
3. Accounting Policy No: 6 regarding accounting of foreign exchange transactions as per FEDAI guidelines in preference
to the Accounting Standard 11 issued by the Institute of Chartered Accountants in India
4. Accounting Policy No: 7 (a), (b) and (c) regarding accounting for Retirement benefits viz. Gratuity Pension and Leave
encashment which is not in accordance with Accounting Standard 15 issued by the Institute of Chartered Accountants
of India.
5. Accounting Policy No: 8 (c) regarding accounting of certain items of income on cash basis, which is not in accordance
with Accounting Standard 9 issued by The Institute of Chartered Accountants of India.
6. Capital to Risk Assets Ratio and other ratios stated are subject to the observation (a) to (e) above, give a true and fair
view in conformity with the accounting principles generally accepted in India.
a. In the case of Balance Sheet, of the State of affairs of the Bank as at 31 March 2002 and
b. In the case of the Profit and Loss Account, of the profit of the Bank for the year ended on that date.
67
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Key Accounting Ratios
For the Year/ Half Year ended
Earnings per Share (EPS) (Rs.)
Cash Earnings per Share (Rs.)
Book Value per Share/ Net Asset value per share (Rs.)
Return on Net worth (%) (Annualised)
OTHER RATIOS
Net NPA to Net Advances Ratio (%)
Interest Income/ Working Funds (%) (Annualised)
Non-Interest Income/ Working Funds (%)
(Annualised)
Return on Assets (%) (Annualised)
Net Profit/ Working Funds (%)
Business per Employee (Rs. in lacs)
Net Profit per Employee (Rs. in lacs)
Capital Adequacy Ratio (%)
Tier I
Tier II
Credit/ Deposit Ratio (%) (net)
Interest Spread/ Average Working Funds (%)
Gross Profit/ Average Working Funds (%)
(Annualised)
Operating Expenses/ Average Working Funds (%)
Return on Average Networth (%) (Annualised)
Yield on Advances (%)
Yield on Investments (%)
Cost of Deposits (%)
Cost of Borrowings (%)
Gross Profit per Employee (Rs. in lacs)
Business per Branch (Rs. in lacs)
Gross profit per Branch (Rs. in lacs)
Definitions of Key Ratios:
Earnings per Share (EPS) (Rs.)
Cash Earnings per Share (Rs.)
Book Value per Share/ Net Asset value
per share (Rs.)
Return on Net worth (%)
Net NPA to Net Advances Ratio (%)
Interest Income/ Working Funds (%)
March 31,
1999
0.66
2.07
20.44
3.75
March 31,
2000
2.71
3.45
21.39
14.14
March 31,
2001
1.86
2.44
21.71
9.21
March 31,
2002
3.48
3.97
19.15
23.64
March 31,
2003
4.07
4.79
21.06
20.24
Sept. 30,
2003
3.62
4.44
23.23
16.34
20.6
12.23
13.94
10.74
12.92
10.09
9.85
9.19
4.8
6.33
8.66
9.88
8.34
1.73
0.16
0.16
149.00
0.18
11.85
9.11
2.74
55.05
1.65
2.09
0.7
0.7
200.00
0.93
11.25
9.70
1.55
57.20
1.59
1.72
0.41
0.41
226.00
0.65
12.90
8.60
4.30
47.77
1.66
1.26
1.26
246.41
2.09
16.50
12.75
3.75
57.70
0.87
3.75
1.28
1.41
264.17
2.36
12.82
10.03
2.79
55.01
1.61
3.64
1.34
1.13
226.92
1.86
15.75
12.75
3.00
41.35
1.24
0.91
2.31
3.76
14.92
13.02
11.89
9.82
1.14
1381
11.22
1.61
2.07
14.14
13.7
11.28
10.93
9.71
2.02
1823
1945
1.24
2.14
9.21
13.86
11.25
10.29
9.94
1.75
2243
17.89
3.23
2.7
23.64
11.52
10.22
9.94
7.03
5.59
2559
57.89
3.14
2.86
20.24
12.17
8.92
8.85
6.98
4.98
2637
52.41
2.14
2.14
16.34
10.35
7.95
7.74
6.74
3.53
2549
39.65
Profit After Tax/ No. of Equity Shares
(Profit After Tax + Depreciation)/ No. of Equity Shares
Networth at year end/ No. of Equity Shares
Net Profit/ Average Equity
Net NPAs/ Net Advances
Interest Income/ Average Working Funds (Total Average of monthly total assets as per
Form X)
Non-Interest Income/ Working Funds (%) Non-Interest Income/ Average Working Funds (Total Average of monthly total assets as
per Form X)
Return on Assets (%)
Net Profit/ Average Total Assets
Net Profit/ Working Funds (%)
Net Profit/ Average Working Funds (Total Average of monthly total assets as per Form X)
Business per Employee (Rs. in lacs)
(Deposit + Advances)/ No. of Employees
Net Profit per Employee (Rs. in lacs)
Net Profit/ No. of Employees
Capital Adequacy Ratio (%)
Tier I
Tier I Capital/ Risk Weighted Assets
Tier II
Tier II Capital/ Risk Weighted Assets
Credit/ Deposit Ratio (%) (net)
Total Advances/ Total Deposits
Interest Spread/ Average Working Funds Net Interest Earned/ Average Working Funds (Total Average of monthly total assets as per
(%)
Form X)
Gross Profit/ Average Working Funds Gross Profit (Profit prior to Provisions & Contingencies)/ Average Working Funds (Total
(%)
Average of monthly total assets as per Form X)
Operating Expenses/ Average Working Operating Expenses (Non-Interest Expenditure)/ Average Working Funds (Total Average
Funds (%)
of monthly total assets as per Form X)
Yield on Advances (%)
Interest Earned on Advances/ Average Advances as per Form X
Yield on Investments (%)
Interest Earned on Investments/ Average Investments as per Form X
Cost of Deposits (%)
Interest Expended (Interest paid on Deposits)/ Average Deposits as per Form X
Cost of Borrowings (%)
Interest on Borrowings/ Average Borrowings as per Form X
Gross Profit per Employee (Rs. in lacs)
Gross Profit (Profit prior to Provisions & Contingencies)/ No. of Employees
Business per Branch (Rs. in lacs)
(Total Deposit + Total Advances)/ No. of Branches
Gross profit per Branch (Rs. in lacs)
Gross Profit (Profit prior to Provisions & Contingencies)/ No. of Branches
68
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
All the Financial Ratios/ Capital Adequacy Ratios as specified in the offer document and the disclosures regarding NPA’s
conform to the norms as specified by RBI
Capitalisation Statement as at September 30, 2003
Particulars
Loan Funds
Long Term
Short Term
Total Debt
Shareholders’ Funds
Share Capital
Reserves and Surplus
Total Equity
Long Term Debt/ Equity Ratio
---24.38
---24.38
---56.69
74.84
131.53
1:4
Details of Outstanding Unsecured Liabilities
As on
Demand Deposits from Banks
Demand Deposits from Others
Saving Bank Deposits
Term Deposits from Banks
Term Deposits from Others
Unsecured Subordinated Bonds
Unsecured Subordinated Bonds
Borrowings from Reserve Bank of India
Borrowings from Other Banks
Borrowings from Other Institutions & Agencies
Others/ Miscellaneous
Total
(Rs. in crore)
Post Issue as adjusted for the proposed
Issue of Bonds of Rs. 50 crore
---74.38
---74.38
---56.69
86.65
143.34
1:2
Pre Issue
March 31, 2003
0
Tax Shelter
For the Year/ Half Year ended
Tax Rate
Tax at actual rate on profit
Adjustments
Permanent Differences
i)
Interest on Tax free bonds
ii)
Dividend (exempt from tax)
iii)
Interest Income from Infrastructure Project
Timing Difference
i)
Difference between both Depreciation IT
Depreciation on Fixed Assets
ii)
Provision for bad and doubtful debts/ bad debts
written off
iii)
Brought forward Losses
iv)
Other Adjustments
v)
VRS Expenditure
Net Adjustments
Tax Saving thereon
Total Taxation
Adhoc Provisions u/s 14A for F.Y. 1998-99 to 2002-03
and half year ended 30.09.2003
Total Taxation
0
3.5
6.25-12.00
4.25 – 12.00
13.00
12.20
----------------
Interest Rate
Sept. 30, 2003
0
0
3.5
4.75-12.00
4.00-12.00
13.00
12.20
----------------
(Rs. in crore)
Repayment Date/ Schedule
March 31, 2003
Sept. 30, 2003
------------------------------29.10.2007
29.10.2007
30.06.2006
30.06.2006
-------------------------------
March 31,
1999
-------------------------------------------------------------------------------------------
March 31,
2000
-------------------------------------------------------------------------------------------
March 31,
2001
----------0.00
--------------------5.91
1.19
--------------------0.65
March 31,
2002
38.50
3.11
--------------------5.19
0.63
--------------------1.13
(Rs. in crore)
March 31,
2003
38.50
6.12
--------------------5.10
0.21
--------------------0.33
Sept. 30,
2003
-------------------------------------------------------------------------------------------
-----------
-----------
-4.89
-13.31
-13.98
-----------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
------------------------------2.86
--------------------------------
-------------------------------6.36
----------3.11
-----------
-------------------------------8.34
----------6.12
-----------
-----------------------------------------------------------------------
-----------
-----------
-----------
3.11
6.12
-----------
Note
The Income Tax liability for the five financial years ended March 31, 2003 has been computed as per the relevant Income
Tax returns/ communications sent to the Assessing Officer. The tax liability for 6 months ended 30.09.2003 is calculated on
the estimated basis.
69
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Contingent Liabilities
1.The Bank has following contingent liabilities for which no provisions have been made in the books of accounts of the
Bank for the year ended March 31, 2003 and half year ended September 30, 2003:
Sr.
Particulars
Amount (Rs. in crore)
No.
Sept 30,2003
March 31 2003
1.
Claims against the Bank not acknowledged as debts
17.46
18.81
-------------------2.
Liability for partly paid investments
3.
Outstanding forward exchange contracts
99.84
100.81
4.
Guarantees given on behalf of customers
----------In India
135.38
143.27
Outside India
--------------------5.
Acceptances, Endorsements and Other Obligations
69.69
69.11
6.
Estimated amounts of contracts remaining to be executed on Capital Accounts
--------------------7.
Disputed Income Tax Liabilities
--------------------8.
Others
--------------------Total
322.37
332.00
2. We have examined all the contracts, claims and litigations against the Bank and have analysed the likely impact of the
same as indicated above. We certify that apart from the contingent liabilities indicated above, the Bank does not have any
other contingent liabilities.
70
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
II.
STATUTORY AND OTHER INFORMATION
Minimum Subscription
As the Issue of Bonds is being made on private placement basis, the requirement of minimum subscription shall not be
applicable.
Expenses of the Issue
The expenses of the Issue payable by the Bank such as fees to the sole arranger, fees, reimbursement of expenses and
payments to the Registrars to the Issue, printing expenses, listing fees, fees of the Trustees for the Bondholders, stamp
duty and other expenses will be met out of the proceeds of the Issue.
Fees Payable to the Intermediaries
The fees payable and the terms of appointment of intermediaries such as sole arranger to the issue, legal advisors to the
issue, tax consultants, registrars to the issue, trustees for the bondholders, credit rating agency(ies) etc are set out in the
relevant appointment letters, copies of which are kept open for inspection at the Registered Office of the Bank.
Underwriting and Procurement Commission/ Brokerage
The issue is not underwritten and hence no underwriting commission is payable. As the Bank shall not be appointing any
Broker other than the sole arranger to the issue, no procurement commission/ brokerage shall be payable to any other
broker in addition.
Previous Issues by the Bank
The Bank has not gone for seeking public subscription for either its equity shares/ bonds/ debentures/ preference shares
etc through Prospectus and thus the Bank is a unlisted company within the meaning of SEBI Disclosure & Investor
Protection Guidelines 2000. The shares of the bank are therefore not listed on any Stock Exchange.
However the Bank has raised Tier II Capital by way of private placement of unsecured subordinated bonds to augment
capital adequacy as under:
Issue
Year of Deemed Date Issue Amount
Tenure
Credit Coupon Rate (% Redemption
Remarks
Series
Placement
of Allotment (Rs. in crores) (in months)
Rating
p.a., annually)
Date
I
1997
31/05/97
20.00
60
Unrated
16.50%
31/05/02
Redeemed
II
2000
29/07/00
12.20
87
Unrated
13.00%
29/10/07
-III
30/06/01
Unrated
30/06/06
-2001
12.18
60
12.50%
Except as stated elsewhere in the Information Memorandum, the Bank has not issued any shares/ debentures/ bonds or
agreed to issue any shares/ debentures/ bonds for cash or otherwise within the two years preceding the date of this
Information Memorandum.
Offer Otherwise than for Cash
There have not been any issues for consideration other than cash, save as except stated elsewhere in the Information
Memorandum.
Option to Subscribe
Save as otherwise stated in the Information Memorandum, the Bank has not given any person nor does it propose to give
any person any option to subscribe to the shares/ debentures/ bonds of the Bank.
Undertaking regarding purchase of property
There is no property which the Bank has purchased or acquired or proposes to purchase or acquire, which is to be paid
for, wholly or partly, out of the proceeds of the present Issue or the purchase or acquisition of which has not been
completed on the date of issue of this Information Memorandum, other than the property as given hereunder:
a. the contracts for the purchase or acquisition whereof were entered into, or may be entered into, in the ordinary course
of the Bank’s business, such contracts not being made in contemplation of the Issue or in consequence of the
contract; or
b. in respect of which the amount of the purchase consideration is not material.
The Bank has not purchased any property in which any of its directors had or have any direct or indirect interest or in
respect of any payment thereof. The Bank has no plans, at present, to acquire any running business out of the proceeds
of the Issue.
Terms of Appointment of Chairman and Chief Executive Officer
In exercise of the powers conferred by section 10 B of the Banking Regulation Act, 1949, the Board of Directors of the
Bank, after consultation with the Reserve Bank of India, has appointed Mr. R. M. Nayak as the Managing Director and
Chief Executive Officer of the Bank upto 09.01.2006 vide resolution no. 367/2002-03 dated 24.12.2002. His compensation
details are as follows:
Salary
:
Rs. 150000/- per month in the scale of Rs. 150000/- Fixed Salary with effect from 09.01.2003.
Other benefit :
Allowances and Perquisites such as dearness allowance, city compensatory allowance, housing,
Leave Travel Allowance, Contribution to Provident Fund, Gratuity, Superannuation, Reimbursement
of medical expenses, entertainment expenses and others.
71
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Terms of Appointment Dy. Managing Director
In exercise of the powers conferred by section 10 B of the Banking Regulation Act, 1949, the Board of Directors of the
Bank, after consultation with the Reserve Bank of India, has appointed Mr. V. K. Gupta as Dy. Managing Director of the
Bank upto 24.3.2006 vide resolution no. 586/2002-03 dated 21.03.03. His compensation details are as follows:
Salary
:
Rs. 100000/- per month in the scale of Rs.100000/- Fixed Salary with effect from 24.3.2003.
Other benefit
:
Allowances and Perquisites such as dearness allowance, city compensatory allowance, housing,
Leave Travel Allowance, Contribution to Provident Fund, Gratuity, Superannuation, Reimbursement
of medical expenses, entertainment expenses and others.
Payment or Benefit to the Directors and Officers of the Bank
Except the benefits as provided under the relevant rules framed by the Board of Directors of the Bank and the Reserve
Bank of India from time to time, the directors of the Bank are not eligible to any additional benefits upon termination of
employment.
The Key Managerial Personnel are entitled to the compensation & benefits as applicable to all the permanent employees
of the Bank. All the Key Managerial Personnel, except the MD & CEO and Dy.MD, are of General Manager and ruler
grade and hence their compensation falls in the scale of Rs. 7100-19340 The other benefit includes the festival loan
housing loan reimbursement of certain expenses etc. as per employees’ service rules.
Nature and Interest of Directors
No Director of the Bank is interested in the appointment of any of the intermediaries to the issue such as sole arranger,
registrars, bankers, trustees, rating agency(ies) etc. No Director of the Bank is interested in any property acquired by the
Bank within two years of the date of the Information Memorandum or proposed to be acquired by it.
The Directors are not interested in any loan or advance given by the Bank to any person(s)/ Company(ies) nor is any
beneficiary of such loan or advance related to any of the Directors of the Bank.
Capitalisation of Reserves or Profits
The Bank has not capitalised its Reserves during the last 5 years.
IV.
MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION
The main provisions of the Articles of Association of the Bank (hereinafter referred to as the Article(s) are reproduced
below.
Allotment of Shares (Articles 6)
6. Conditions of Issue of New Shares: Subject to the provisions if any, in the Memorandum of Association of the Bank
and without prejudice to the provisions of the Banking Regulations Act, new shares may be issued on such terms and
conditions which the bank may from time to time by special resolution determine.
Certificates (Articles 14(1) & 14(2))
Members right to shares Certificate:
14 (1) Share certificates shall be issued in market lots nd no fee shall be charged for the same.
14 (2) Every person whose name is entered as a member in the register of members shall be entitled to receive within
three months after allotment or within two months after the application for registration of transfer ( or within such other
period as the conditions of issue provide)
(a) One or more certificates for all his shares without payment subject to Clause (1) above.
(b) Several certificates each for one or more of his shares upon request without making any charge fo9r such
splitting or consolidation into market units of trading.
(c) Every certificate shall be under the seal and shall specify the shares to which its relates and the amount paid
thereon.
(d) In respect of any share or shares held by jointly or several persons, the Bank shall not bound to issue
certificates separately to each one of the joint holders and delivery of one or more certificates as the case may be
for shares to any one or several joint holders shall be sufficient delivery to all such shareholders.
Provided that in the issue of share certificates the Board shall comply with the provisions of the Companies (
Issue of share certificate ) Rules, 1960 or any statutory modifications thereof.
72
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
Forfeiture and Lien (Articles 22,23,24,25,26,27,28)
22: Company’s lien: The company shall have first and paramount lien upon all the shares (other than fully paid-up
shares) registered in the name of each member (whether solely or jointly with others) and upon the proceeds of sale
thereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares and
no equitable interest in any share shares be created except upon the footing and condition that Article 13 hereof will have
full effect. And such lien shall extend to all dividends and bonuses from time to time declared in respect of such shares.
Unless otherwise agreed the registration of a transfer of shares shall operate as a waiver of the Company's lien if any, on
such shares. The Directors may at any time declare any shares wholly or in part to be exempt from the provisions of this
clause.
23. If a member fails to pay any call, or instalment of a call on the day appointed for payment thereof, the Board may, at
any time thereafter during such time as any part of the call or instalment remains unpaid, serve notice on him requiring
payment of amounts of the call or instalment as is unpaid, together with any interest which may have accrued.
24. The notice afore said shall (a) name a further day (not being earlier than the expiry of fourteen days from the date of
service of notice) on or before which the payment required by notice is to be made, and (b) state that in the event of
non-payment on or before the day so named, the shares in respect of which the call was made will be liable to be
forfeited.
25
(1) A forfeited share may be sold or otherwise disposed off on such terms and in such manner as the Board thinks
off.
(2) At any time before a sale or disposal as aforesaid, the Board may cancel the forfeiture on such terms as it
thinks fit.
26 (1) A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but
shall, notwithstanding the forfeiture, remain liable to pay to the company ass moneys which at date of forfeiture, were
presently payable by him to the company in respect of the shares.
(2) The liability of such person shall cease if and when the company shall have received payment in full of all such
moneys in respect of the shares.
27. Evidence of forfeiture:
(1) A duly verified declaration in writing that the declarent is a Director or Secretary of the company and that a share in
the company has been duly forfeited on a date stated in the declaration shall be conclusive evidence of the facts
therein stated as against all persons claiming to be entitled to the share.
(2) The company may receive the consideration if any, given for the shares on any sale or disposal thereof and may
execute a transfer of the shares in favour of the person to whom the share is sold or disposed of.
(3) The transferee shall thereupon be registered as the holder of the share.
(4) The transferee shall not be bound to see to the application of the purchase money if any, nor shall his title to the
share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of
the share.
a)The provisions of these regulations as to forfeiture shall apply in case of non-payment of any such sums which, by
terms of issue of a share, becomes payable at a fixed time, whether in account of the nominal value of the share or
by way of premium, as if the same had been payable by virtue of a call duly made and notified.
Transfer and Transmission (Articles 29, 30, 30A, 32(1), 32(2), 33(1), 33(2), 33(3),
A.
Register of Transfer:
The company shall keep a book called the “Register of Transfers” and therein shall be
entered the particulars of every transfer or transmission of any share in the company in accordance with the
regulations applicable from time to time, provided however the Bank shall be entitled to keep and maintain such
registers through electronic media in accordance with law. Subject to the provisions of the Companies Act, the
register of members may be closed for any period not exceeding in the aggregate 45 days in a year but not
exceeding in the aggregate 45 days in a year but not exceeding 30 days at any one time.
B.
Execution of Transfers:
(1) Subject to the provisions of the Companies Act, 1956 the instrument of transfer of any share in the Company shall
be executed by or on behalf of both the transferor and transferee in such form as may be prescribed by the relevant
statutory provisions.
(2) the transferor shall be deemed to be the holder until the name of the transferee is entered in the register of
members in respect thereof.
30 A. The transfer of shares which results in acquisition of shares by a person/group which would take his/its holding to
a level of 5% or more of the total issued capital of the Bank, (or such other percentage as may be prescribed by the
Reserve Bank of India, from time to time), shall be with the prior approval of the Reserve Bank of India.
73
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
32. Title of shares of deceased members.
(1) On the death of a member the survivor or survivors where the member was a joint holder and his legal
representatives where he was a sole holder shall be the only persons recognised by the company as having any
title to his interest in the shares
(2) Nothing in Clause(1) shall release the estate of deceased joint holder from any liability in respect of any share
which had been jointly held by him with other persons.
33. Registration in case of transfer by operation of law
(1) Any person becoming entitled to a share in consequence of the death or insolvency of a member may, upon such
evidence being produced as may from time to time properly be required by the Board as subject to hereinafter
provided, elect, either.
(a) to be registered himself as a holder of the shares or
(b) to make such transfer of the shares as the deceased or insolvent member could have made.
(2) The Board shall in either case have the same right to decline or suspend registration as it would have had the
deceased or insolvent member had transferred the share before his death or insolvency.
(3) In case of the death of a joint holder, his name shall be deleted from the register of members on production of proof
to the satisfaction of the Board.
Sub-division and Consolidation of Shares (Articles 10)
10. Sub division and consolidation of capital: The Bank may, by ordinary resolution, from time to time, subdivide or
consolidate the shares in the Bank into shares of smaller or larger nominal amount than is fixed by the
Memorandum of Association, provided that the same proportionate liability shall continue on the shares so reduced
or increased as existed on the original shares before such subdivison or consolidation.
Modification of Rights (Articles 6,7,8)
6. Conditions of Issue of New Shares: Subject to the provisions if any, in the Memorandum of Association of the Bank
and without prejudice to the provisions of the Banking Regulations Act, new shares may be issued on such terms
and conditions which the bank may from time to time by special resolution determine.
7. New Shares How to be disposed off: All further issue of shares shall be in accordance with the provisions of the
Companies Act and other applicable provisions of the law.
8.
New shares subject to these articles: Subject to any special rights, previleges, or advantages which may be
attached to any new shares under the powers herein before contained, any capital raised by the creation of new
shares shall be considered as part of the orginal capital, and such new shares shall be subject to the same
provisions with reference to payment of calls, forfeiture, transmission, lien, surrender or otherwise and shall confer
such rights and privileges as to voting qualifications as if they had formed part of the Original capital.
Borrowing Powers (Articles Powers and Duties of Directors – VI)
Subject to the provisions of the companies Act 1956 and Banking Regulation Act 1949, to raise to borrow money from
time to time by bonds, debentures or promissory notes or by any such instruments which may emerge in the financial
market from time to time or by opening current account or by reserving advances with or without security or by
mortgaging any lands, buildings, machinery, goods or other property of the Bank or by such other means that the Board
may deem expedient.
Votes of Members (Articles 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61)
51. Votes: Subject to any rights or restrictions for the time being attached to any class or classes of shares(a) on a show of hands, every member present in person shall have one vote;
(b) on a poll, the voting rights of members shall be as laid down in the Companies Act, 1956 subject to the provisions
of Banking regulations Act, 1949 and other applicable statutory regulations.
52. Disqualification of Vote: No member shall be entitled to be present or vote either personally or by proxy upon a
poll, or be reckoned in a quorum at any general meeting or exercise any previlege as a member unless all calls or
other money due and payable in respect of any share of which he is the holder, have been paid.
53. Vote by Joint holders: In case of joint holders the vote of the senior who tenders the vote, whether in person or
by proxy shall be accepted to the exclusion of the votes of the other joint holders. For this purpose seniority shall
be determined by the order in which the names stand in the register of members.
54. Lunatics' votes: A member of unsound mind or in respect of whom order has been made by any court having
jurisdiction in luancy may vote whether on show of hands or on a poll by his committee or other legal guardian and
any such committee or guardian may on a poll, vote as proxy.
74
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
55. No voting by proxy on show of hands: No member not personally present shall be entitled to vote on a show
of hands unless such member is a corporation present by a representative duly authorised under section 187 of
the Companies Act, 1956 in which case such proxy or representative may vote on the show of hands as if he were
a member of the company.
56. Proxies permitted:
Votes may be given either personally or proxy or in the case of a company by a
representative duly authorised as aforesaid.
57. Instrument appointing proxy to be in writing: The instrument appointing a proxy shall be in writing under the
hand of the appointer or by his attorney duly authorised in writing or if such appointer is a corporation under its
common seal or the hands of its attorney.
58. Deposit of proxy and Power of Attorney:
The instrument appointing a proxy shall be deposited at the
registered office of the company not less than 48 hours before the time for holding the meeting and in default the
instrument of proxy shall not be treated as valid.
59. Objection to the qualification of the voter
(a) No objection shall be raised to the qualification of any vote except at the meeting or adjourned meeting at which
the vote objected to is given or tendered and every vote not disallowed at such meeting shall be valid for all
purposes.
(b) Any such objection made in due time shall be referred for the Chairman of the meting whose decision shall be final
and conclusive.
60. When vote by proxy valid through authority revoked.
A vote given in accordance with the terms of the instrument of proxy shall be valid notwithstanding the previous
death or insanity of the principal or revocation of the proxy or transfer of the shares in respect of which vote is given
provided no intimation in writing of the death, insanity, revocation or transfer shall have been received at the
registered office of the Bank or by Chairman of the meeting before the vote is given.
61. Form of proxy
An instrument appointing a proxy shall be either of the forms in scheduled IX of the Companies Act, 1956 or a form
as nearer thereto as circumstances admit.
Directors (Articles 62, 63, 64, 65, 66, 67, 68, 69)
62. No. of Directors: The number of Directors shall be less than three and more than twelve, until otherwise resolved
by the company in General Meeting. Not less than fifty one percent of the total number of Directors shall be
persons laid down in Section 10 A of the Banking Regulations Act 1949.
63. Term of Directors:
(a) Two thirds of the total number of Directors shall be persons whose period of office is liable to determination by
retirement by rotation and shall be elected by the company in General Meeting.
(b)
The remaining Directors shall be appointed by the Board of Directors and shall not be liable to retirement by
rotation nor taken into consideration in determining the retirement of Directors by rotation. The Directors so
appointed by the Board shall be persons who possess one or more of the qualifications specified in Section 10 A
(2) of the Banking Regulation Act, 1949. Their period of office shall be determined by the Board.
64. Remuneration of Directors: The remuneration of a Director per Board Meeting / Committee Meeting attended by
him shall be such amount as may be fixed by the Board with the approval of Reserve Bank of India from time to time in
accordance with the provisions of the Banking Regulation Act, 1949. The directors shall be in addition to the above
sitting fee be entitled to all reasonable out of pocket expenses incurred by them for each such meeting and allowances
in lieu of travelling and staying expenses subject to the provisions of Section 309 of the Companies Act, 1956 and
Section 35(B) of Banking Regulation Act, 1949.
65. Special Remuneration: If any Director devotes to the business of the company either his whole time and
attention or more of his attention and time than in the opinion of the Board would usually be so devoted by a
person holding such office or shall undertake and perform any duties or services other than those which in the
opinion of the Board would usually be undertaken or performed by a person holding such office, then such
Director may be remunerated either by a fixed sum or by way of salary as may be determined by the General
Body, subject to the applicable statutory provisions.
75
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
66. Qualification of Director: The qualification of a Director shall be the holding of atleast 40 shares of bank
registered in his name provided that the Chairman of the Board of Directors and or persons, who owing to their
special knowledge of practical experience in accountancy, law, banking, agriculture and rural economy, cooperation, economics, finance, small scale industry or any other matter of special knowledge or practical
experience which would in the opinion of the reserve Bank be useful to the Bank are appointed Directors by the
other Directors of the Bank shall be entitled to hold office even if he or they does or do not hold any share in the
capital of the Bank.
67. Filling up a casual vacancy : Any casual vacancy occurring in the Board of Directors may be filled up by the
Board but the person so chosen shall be subject to retirement at the same time as if he had become a Director on
the day on which the Director in whose place he is appointed was last elected as a Director.
68. Vacancy in Board: The continuing Directors may act notwithstanding any vacancy in the Board, but, if and so
long as their number is reduced below the quorum fixed by the Act for a meeting of Board, the continuing Directors
or Director may act for the purpose of increasing the number of Directors to that fixed for the quorum or of
summoning a General Meeting of the company, but for no other purpose.
69. Register of Directors: The Directors shall comply with the provisions of Section 303 of the Companies Act,
1956 in regard to keeping a register of Directors or managers.
Rotation of Directors (Articles 63)
63. Term of Directors:
(a) Two thirds of the total number of Directors shall be persons whose period of office is liable to determination by
retirement by rotation and shall be elected by the company in General Meeting.
(b)
The remaining Directors shall be appointed by the Board of Directors and shall not be liable to retirement by
rotation nor taken into consideration in determining the retirement of Directors by rotation. The Directors so
appointed by the Board shall be persons who possess one or more of the qualifications specified in Section 10 A
(2) of the Banking Regulation Act, 1949. Their period of office shall be determined by the Board.
Chairman/ Managing Director/ Executive Director/ Chief Executive Officer (Articles 84, 85)
84 (1) Chairman on Part-time/Chairman on whole-time basis or Managing Director: The Board may, from time
to time, appoint or reappoint one of its members who satisfies conditions prescribed under the provisions of the
Banking Regulation Act, 1949 as chairman of its Board of Directors on a whole-time or part-time basis and if
appointed on a whole-time basis, he shall be entrusted with the management of the whole of the affairs of the
Bank. Provided that the Chairman shall exercise his powers subject to the superintendence, control and directions
of the Board of Directors.
(2) Where a Chairman is appointed on a part-time basis:
(i) Such appointment shall be with the previous approval of Reserve Bank of India and be subject to conditions as the
Reserve Bank of India may specify while giving such approval.
(ii) The management of the whole of the affairs of the Bank shall be entrusted to a Managing Director who shall
exercise his powers subject to superintendence, control and direction of Board of Directors.
(3) Notwithstanding anything contained in Article 84 (1&2), the Board may, from time to time, appoint or re-appoint one
of its members as Whole-time Director, in addition to the Chairman/Managing Director and Chief Executive Officer
of the Bank who shall not be liable to retire by rotation, and may confer such duties and responsibilities as deemed
fit and whose powers shall not exceed those of the Chairman/Managing Director and Chief Executive Officer, and
shall report to the Chairman/Managing Director and Chief Executive Officer of the Bank.
(4) “The whole time Director appointed under Clause(3) of Article 84 shall perform such duties and responsibilities as
may be conferred by the Board from time to time”.
85. Chairman on whole-time basis or Managing Director be entrusted with the Management: The Chairman on
a whole-time basis or Managing Director shall be entrusted with the management of the whole of the affairs of the
Bank and shall be in whole-time employment of the Bank.
Proceedings of Directors (Articles 71, 72, 73, 74, 75, 76, 77, 78)
71. Meeting of Directors: The Board may meet for the dispatch of business, adjourn or otherwise regulate its
meetings and proceedings as it thinks fit.
72. Quorum: Subject to the provisiond of Section 287 of the Companies Act, 1956:One third of the total strength of the Board of Idrectors or two Directors whichever is higher shall form a quorum.
73. Meeting how called: The Chairman may at any time at his discretion summon a meeting of the Board. A Director
may and the managaing Director or Secretary on requisition of a Director shall at any time summon a meeting of
the Board.
76
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
74. Questions how decided:
(1) Save as otherwise expressly provided in the Act, questions arising at any meeting of the Baord shall be decided
by a majority of vote.
(2)
In case of equality of votes, the Chairman of the Board shall have a second or casting vote.
75. Who shall preside over Board Meetings: The Chairman of the Board shall preside over the meeting. If the
Chairman is not present within thirty minutes after the time appointed for holding the meeting the Directors present
may choose one of their member to be the Chairman of the meeting.
76. Power of Quorum: A meeting of the Board of Directors for the time being at which a quorum is present shall be
competent to exercise all or any of the authorities and powers vested in or exercisable by the Board generally.
77. Power to appoint committee: the Board of Directors may delegate any of its powers to the Chairman or to the
committees consisting of such number of members of their body as it thinks fit, and may from time to time revoke
such delegation. Any committee so formed shall in the exercise of the powers so delegated, confirm to any
regulations that mayfrom time to time be imposed upon it by the Board. The meeting and proceedings of any such
committee for which the quorum shall be two shall be governed by the provisions herein contained for regulating
the meetings and proceedings of the Directors, so far as the same are applicable thereto and are not superseded
by any regulation made by the Directors under this clause.
78. Resolution by circulation: Save as otherwise expressly provided in the Companies Act, 1956, a resolution in
writing circulated in draft together with necessary papers, if any, to all the Directors or to all the members of the
Committee then in India (not being less in umber than the quorum fixed for the meeting of the Board or of the
Committee as the case may be) and to all other Directors or members at their usual addresses in India and
approved by such of the Directors as are then in India or by a majority of such of them as are entitiled to vote on the
resolution shall be valid and effectual as if it has been a resolution duly passed at a meeting of the Board or
Committee duly convened and held.
Powers of Directors (Articles 81, 82, 83)
81. The business of the Bank shall be managed by the Board of Directors who may exercise all such powers of the
Bank as are not by the Companies Act, 1956 or by these articles required to be exercised by the Company in
General Meeting subject to nevertheless to any regulations of these articles, to the provisions of the said Act, and
to such regulations being not inconsistent with the aforesaid regulations or provisions as may be prescribed by the
Bank in General Meeting, but no regulations made by the Bank in general Meeting shall invalidate any prior act of
the Directors which would have been valid if that regulation had not been made.
82. Without prejudice to the general powers conferred by the last preceding clause and the other powers conferred by
these presents it is hereby expressly declared that the Board shall have the following powers, that is to say
power:(i) To Acquire Property: To purchase or otherwise acquire for the bank and / or to sell any property, rights, privileges
which the Bank is authorised to acquire at such price and generally on such terms and conditions, as they think fit.
(ii) To pay for property in Debenture etc. As its discretion, to pay for any property, rights or privileges acquired by or
service redndered to the bank wholly or partially in cash or in shares, bonds, debentures or other securities of the
Company and any such shares may be issued either as fully paid up or with such amount credited as paid up there
on as may be agreed upon and any such bonds, debentures or other securities may either specifically charged
upon all or any part of the property of the Bank or not so charged.
(iii) To secure contracts by mortgage: To secure the fulfilment of any contracts or engagements entered into by the
bank by mortgage or charge of all or any of the property of the Bank for the time being or in such other manner as
they think fit.
(iv) To authorise managers: To authorise or empower the Managers or other officers for time being of the bank to
exercise and perform all or any of the powers, authorities and duties conferred or imposed upon the Board by the
Memorandum or Articles of Association subject to such restrictions and conditions if any, as the Board may think
proper.
(v) To appoint and remove Managers etc:- From time to time nominate and appoint if necessary to remove or suspend
as the Directors deem best for management of the business of the Bank, managers, officers, clerks, workmen and
all other employees of the company and to fix the remuneration, salaries and wages to be paid by the Bank to
officers of the Bank and other employees generally.
(vi) To Borrow money: Subject to the provisions of the Companies Act, 1956 and Banking Regulations Act 1949, to
raise or borrow money from time to time by bonds, debentures or promisory notes or by any such instruments
which may emerge in the financial market from time to time or by opening current account or by reserving advances
with or without security or by mortgaging any lands, buildings, machinery, goods or other property of the Bank or by
such other means that the Board may deem expedient.
77
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
(vii) To draw Bills of exchange: To draw, accept, endorse, negotiable, buy/or sell bills of exchange and other negotiable
instruments with or without security.
(viii) To pay rent: To undertake on behalf of the Bank, the payment of all rent and the performance of all covenants,
conditions and agreements contained in or reserved by lease that may be granted or assigned to or otherwise
acquired by the Bank.
(ix) To insure: To insure or keep insured if deemed expedient or any of the buildings, goods, stores other property or
any securities of the Bank, either separately or conjointly for such period and such extent as the Directors may think
proper and to sell, assign, surrender or discontinue any policies of assurance effected in pursuance of this power.
(x) To purchase reversion in land: To purchase the reversion or reversions and otherwise acquire the free-hold or fee
simple of all or any of the lands of the Bank for the time being held under lease for an estate less than a freehold
estate by the Bank.
(xi) To accept surrender of Shares: To accept from any member on such terms and conditions as shall be agreed, a
surrender of his shares or any part thereof if permissible as per the regulations in force.
(xii) To bring and defend actions etc: To institute, conduct, defend, compound or abandon any legal proceedings by or
against the Bank, or its officers or otherwise concerning the affairs of the Bank and also to compound and allow
time for payment for satisfaction of any debt sue and of any claims or demands by or against the Bank.
(xiii) To refer to Arbitration To refer any claims or demands by or against the Bank to arbitration and observe and
perform the awards subject to judicial review of such final awards.
(xiv) To give receipts:To make and give receipts, releases and other discharges for money payable to the Bank and for
the claims and demands of the Bank.
(xv) To authorise acceptance To authorise officers or other persons to sign on the Bank's behalf, bills, notes, receipts,
acceptances, endorsements, cheques, releases, contracts and documents.
(xvi) To appoint Attorneys: From time to time to provide for the management of the affairs of the Bank in all its
branches in such manner as the Directors thinks fit and in particular appoint any person to be the attorneys or
agents of the bank with powers (including power to sub-delegate) and upon such terms as may be thought fit.
(xvii) To appoint Legal advisors: To appoint one or more qualified men as legal advisors, whose duties shall be to give
opinions on questions referred to them, and to give notices and to conduct and defend suits on behalf of the Bank
and to do all that may be done by them in the interest of the Bank and in their capacity as such advisors.
(xviii) The Directors may appoint any qualified person as legal advisor and remuneration may be fixed by the Direcors.
The Directors shall have also power to replace any legal advisor by another at any time they think fit.
(xix) To invest moneys: To invest and deal with any of the moneys of the Company upon such shares and securities
(not being shares in this company) and in such manner as they may think fit, and from time to time vary or realise
such investments in accordance with the enabling statutory regulations.
(xx) To give security by way of indemenity: To execute in the name and on behlaf of the Bank in favour of any Director
or other person who may incur or be about to incur any personal liability for the benefit of the Bank such mortgages
of the bank's property as they think fit and any such mortgage may contain a power of sale and such other powers,
covenants and provisions as shall be agreed on.
(xxi) May make Bye-laws: from time to time to make, vary, repeat bye-laws for the regulation of the business of the
Bank, its Officers and servants and provident fund, pension funds and any other welfare funds.
(xxii) May make contracts: To enter into all such negotitations and contracts, and rescind and vary all such contracts
and execute and do all such acts, deeds, and things in the name and on behalf of the company as the Board may
consider expedient for or in relation to any of the matters aforesaid or otherwise for the purpose of the company.
(xxiii) Branch register:From time to time to decide and cause to be kept at any of its branches, a branch register of
members or a copy of its register of its members and make such regulations as they think fit regarding the keeping
or discontinuance of such registers.
(xxiv) General Powers: Subject to the Provisions of Companies act, 1956 and banking regulation Act, 1949 to appoint
a whole-time Director or Executive Director or any such managerial personnel by whatever name called on such
terms and conditions and for such purposes as the Board may decide from time to time.
78
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
(xxv) And generally to do, sanction and authorise all such matters and things as may be necessary to be done
authorised or sanctioned in or about the general business and affairs of the Company or in or about the execution
of all or any of the powers hereinbefore conferred on the Board.
83. Comply with Statutes: The directors shall comply with the provisions of Banking Regulation Act, 1949 and its
subsequent amendments as well as the provisions of the Companies Act, 1956 or other statutes relating to
companies as to registration and keeping the copies of the mortgages and charges and keeping the register of the
members and sending to the Registrar of Companies the annual list of members and summary notices as to the
increase of capital, returns of allotments and contracts relating thereto, copies of special resolutions and other
particulars connected with the above.
Notices (Articles 41, 42, 43)
41. The Board may, whenever it thinks fit, convene a general meeting and it shall, on the requisition of the holders of
share representing not less than one tenth of the issued share capital of the company up on which all calls or
other sums then due have been paid, or upon the requisition of not less than 20 members who among themselves
hold shares of not less than one twentieth of the issued share capital upon which all calls or other sums then due
hae been paid, forthwith proceed to convene a general meeting of the company. In case of such requisition the
following provisions shall have effect.
(a) The requisition must state the object of the meeting and must be signed by the requisitionist and deposited at the
office and may consist of several documents in like form each signed by one or more of the requisitionists.
(b) If the Board does not, within twenty one days from the date of the requisition being so deposited, proceed to
convene a meeting not later than 45 days from the date of deposit of the requisition, the requisitionist or majority of
them in regard to the paid up capital may themselves convene the meeting but in either case any meeting so
convened shall not be held after three months from the date of such deposit.
(c) In case of a meeting at which a resolution is to be proposed as special resolution, the Board shall be deemed not
to have duly convened the meeting if they do not give such notice as required by Section 171 of the Companies
Act, 1956.
(d) Any meeting convened under this clause by the requisitionist shall be convened in the same manner s nearly
possible as that in which meetings are to be convened by the Board.
(e) The provisions of Section 170 to 186 of the Companies Act, 1956 shall apply to the meetings called either by the
Board or by the requisitionists or by the Company Law Board.
42. Notice: Where it is proposed to pass a special resolution, not less than twenty one clear days notice and in other
cases not less than fourteen clear days notice specifying the place, day and hour of meeting and in case of special
business general nature of such business shall be given to the members in the manner hereinafter provided.
43. As to the omission to give notice: The accidental omission to give notice of any meeting to or the non-receipt
of any such notice by any of the members shall not invalidate any resolution passed at any such meeting.
Winding Up (Articles -Table A, 1st Schedule of Companies Act 1956)
Indemnity (Articles 105)
105. Indemnity to Directors and Officers: Every officer or Manager for the timebeing of the Bank shall be
indemnifies out of the assets of the Bank against his liability incurred byhim in defending any proceedings whether
civil or criminal in which judgement is given in his favour or in which he is acquitted or in connection with any
applications under Section 633 of the Companies Act, 1956, in which relief is granted to him by the Court.
79
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
V.
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
The contracts referred to in Para (A) below (not being contracts entered into in the ordinary course of the business
carried on by the Bank or entered into more than 2 years before the date of the Information Memorandum) which are or
may be deemed to be material have been entered into by the Bank. Copies of these contracts together with the copies
of documents referred to in Para (B) below have been attached to the copy of the Information Memorandum and the
same may be inspected at the Registered Office of the Bank between 10:00 am and 12:00 noon on any working day
until the closing of the subscription list.
A.
1
2
3
Material Contracts
Copy of letter dated AO/GM/SML/GEN/186/2003 dated 15/12/2003 appointing A. K. Capital Services Limited as
the Sole Arranger to the issue.
Copy of agreement dated 22.01.2003 for appointing CAMEO Corporate Services Limited as Registrar and
Transfer Agents.
Copy of letter dated 04/02/04 appointing The Western India Trustee & Executor Company Limited (WITECO) as
Trustees to the Bondholders.
1.
1.
2.
3.
4.
5.
6.
Documents
Memorandum and Articles of Association of the Bank.
Certificate of Incorporation dated 22.04.1940.
Certificate of commencement of business dated 07.05.1940
Copy of the AGM Resolution dated 05.08.2003 authorising the issue of Bonds.
Copy of the Resolution of Board of Directors dated 17.11.2003 authorising the current issue of Bonds.
Auditors Report dated 04/02/04 referred to in the Information Memorandum and their consent dated 04/0/2/04 to
include the same in the Information Memorandum.
7.
Consent from the Legal Advisors, Directors, Auditors, Trustees to the Bondholders, Bankers to the Company,
Sole Arranger to the Issue, Registrars to the Issue referred to in this Information Memorandum to act in their
respective capacities.
8.
Copies of the initial listing application dated 03.02.2004 made to The Stock Exchange, Mumbai.
9.
Annual Reports of the Bank for Financial Years 1998-1999, 1999-2000, 2000-2001, 2001-2002 and 2002-2003.
10. Letter no. List/Debt/Sym/Pg/2004 dated 05/02/2004 received from The Stock Exchange, Mumbai conveying the
in-principle approval for listing of the Bonds.
11. Letter no. Nil dated 08.01.2004 from Credit Analysis and Research Limited (CARE) conveying the credit rating
for the Bonds of the Bank and the rating rationale pertaining thereto.
12. Tripartite Agreement dated 31.07.2003 between the Bank, National Securities Depository Limited (NSDL) and
CAMEO Corporate Services Limited for issue of bonds in dematerialised form.
80
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
PART III
DECLARATION
All the relevant provisions of the Companies Act, 1956, the Banking Regulation Act, 1949, Securities and Exchange
Board of India, the guidelines issued by the Government and any other competent authority have been complied with
and no statement made in this Information Memorandum is contrary to the provisions of the Companies Act, 1956 and
rules framed thereunder. All the legal requirements applicable till the date of this Information Memorandum have been
complied with. Further it is certified that, all disclosures made in this Information Memorandum are true and correct.
The Issuer Company accepts no responsibility for the statements made otherwise than in this Information
Memorandum or any other material issued by or at the instance of the issuer and that any one placing reliance on any
other source of information would be doing so at his own risk.
Signed by Mr. R. M. Nayak pursuant to the authority granted by the Board of Directors of the Bank at their meeting held
on 17.11.2003:
(R. M. Nayak)
Managing Director & Chief Executive Officer
Dated: February 05, 2004
Place: Kochi, Kerala.
81
(R. M. Nayak)
Managing Director & Chief Executive Officer
CREDIT ANALYSIS &
RESEARCH LTD.
2-B, Wellington Plaza, 3rd Floor,
90, Anna Salai, Chennai 600 002
Tel/Fax 2860 0876, 2860 0811, 2860 7812
Mr. R. M. Nayak
Managing Director & Chief Executive Officer
Lord Krishna Bank Limited
Regd. & Admn. Office
Indian Express Building, Kaloor
Cochin - 682017
January 8, 2004
Confidential
Dear Sir,
Credit Rating for your proposed Tier-II Subordinated Bond Issue for Rs.60 cr
(including a greenshoe option of Rs.10cr)
Please refer to your letter of request dated, January 7, 2004 for Credit rating of the above bond issue.
2.
Our Rating Committee has assigned a ‘CARE A [Single A]’ rating to the above Bond issue. The
bonds would have a maximum coupon rate of 200 basis points over GoI security of equivalent
tenure and would be redeemed at par at the end of 87 th month from the date of allotment.
Instruments with this rating are considered upper medium grade instruments and have many
favorable investment attributes. Safety for principal & interest are considered adequate.
Assumptions that do not materialise may have a greater impact as compared to the instruments
rated higher.
3.
Our rating symbols for various ratings for long and medium term instruments and explanatory
notes thereon are in Annexure. The rationale for the above rating will be communicated
separately.
4.
Please arrange to get the rating revalidated, in case the proposed long term bond issue is not
made within six months from the date of this letter.
5.
In order to enable you to use the ratings, please send us your acceptance in writing within two
weeks of this letter. Unless accepted the rating cannot be used in any manner whatsoever.
6.
In case there is any change in the size or terms of the proposed issue, please have the rating
revalidated.
7.
Please inform us the details of the issue (date/s of issue, name of investor/s, amount/s issued,
interest rate/s, date/s of payment of interest, date/s and amount/s of repayment/s etc) as soon as it
has been placed.
8.
CARE reserves the right to suspend/withdraw/revise the rating assigned on the basis of new
information or in the event of failure on the part of the bank to furnish such information,
material or clarifications as may be required by CARE. CARE shall also be entitled to publicise/
disseminate such suspension/ withdrawal/ revision in the assigned rating in any manner
considered appropriate by it, without reference to you.
9.
CARE ratings are not recommendations to buy, sell, or hold any security.
If you need any clarifications, you are welcome to approach us in this regard.
Thanking you,
Yours faithfully,
sd/[T.N. Arun Kumar]
Dy. General Manager
Head Office: Kalpataru Point, 2nd Floor, Kamani Marg, Sion (East), Mumbai 400 022. INDIA Tel.:(022)56602871/72/73, 24024541/42/43 Fax: 56602876
LORD KRISHNA BANK LTD.
THE WESTERN INDIA TRUSTEE
AND EXECUTOR CO. LTD.
( Subsidiary of The United Western Bank Ltd.)
161/C, 16th Floor, Mittal Court, Nariman Point, Mumbai – 400 021.
Tel. : 22812883, 22880988 / 86 Fax : 22816477 E-mail : witco@vsnl.net
WITCO/04/SGM/238
Lord Krishna Bank Limited
Indian Express Building,
Kaloor,
Kochi – 682 017.
4th February, 2004
Kind Attn: Mr. S. M. Goyal
Dear Sir,
Re: - Bond Trusteeship Business amounting to Rs. 50 crores
We refer to our letter No. WITCO/04/VGP/199 dated 29th January, 2004
conveying quote for your captioned Bond Issue and your subsequent
discussions with us in the matter.
In this context, we confirm to act as Trustee for your above Bond Issue.
Yours faithfully,
sd/Vice President
Regd. Office : Vishwastha Bhavan, 218, Pratapganj Peth, Satara. Tel.: (02162) 280075, 284002 Fax: (02162) 284686 E-mail:str_ssk80075@sancharnet.in
Pune Office : Sadhana Apartment, 2076, Sadashivpeth, Pune – 411 030. Tel.: (020) 4321626 Fax: (020) 4321627
83
(R. M. Nayak)
Managing Director & Chief Executive Officer
LORD KRISHNA BANK LTD.
ADDRESSES OF COLLECTING BRANCHES OF THE BANK
Lord Krishna Bank Limited
Registered & Administrative Office: Indian Express Building, Kaloor, Kochi - 682 017 (Kerala).
Tel.: (0484) 2043567, 2403568, 2403569,2403570 Fax.: (0484) 2405021, 2403577
Center
Address
Chennai
Precision Plaza, Ground Floor, 281, Mount Road,
Teynampet, Chennai -600 018
Ground Floor And First Floor Samskruthi Chambers,
No.103, K.H.Road,
Bangalore – 560 027
TSR Towers, Raj Bhavan Road,
Somajiguda, Hyderabad - 82
GF, Pancharatna Building,
Panchavati Circle,
C.G. Road, Ahmedabad – 380 006
K-2 Chaudhary Buildings, Middle Circle, Connaught
Place, New Delhi – 110 001
BNG House, I Floor, 201, Dr. D.N. Road,
Fort, Mumbai – 400 001
Ground Floor, Prabhu Towers,
M G Road, Kochi – 682 035
Bangalore
Hyderabad
Ahmedabad
Delhi
Mumbai
Kochi
STD
Code
044
080
040
079
011
022
0484
Telephone Number(s) Fax
Number(s)
24320557, 24320394
24339323
24313342, 24335982
2211979, 2215731
2242642
2290508
23372303, 55631379
98850 22256
6442444, 6442888
98253 07030
23371646
51513167, 23415336
23412160, 51513168
22695329, 22618715
22695325,
2352131, 2381112
23417754
22618731
2353344
ADDRESSES OF SOLE ARRANGER TO THE ISSUE
A. K. Capital Services Limited
Centre
Address
Contact Person
Mumbai
135/136, Free Press House,
13th Floor, Free Press Journal
Marg, Nariman Point,
Mumbai – 400 021.
Flat No. ‘N’,
Sagar Apartments,
6, Tilak Marg,
New Delhi - 110 001.
Office No. 711, 7th Floor,
Brigade Tower, No-135,
Brigade Road,
Bangalore - 560 025.
211, Shail Complex, IInd Floor, Opp.
Madusudan House, Shilp Char
Rasta, C.G. Road, Navrangpura,
Ahmedabad – 380 009.
3D, Ali Towers,
22, Greams Road,
Chennai - 600 006.
Oswal Chambers,
5th Floor, 2, Church Lane,
Kolkata - 700 001
5-9-93/1, Shakti Sai Complex, 2/7,
2nd Floor, Chapel Road,
Hyderabad – 500 001.
Mr. Vikas Jain/
Mr. Vibhu Agarwal/
Ms. Apoorva Srivastava
New Delhi
Bangalore
Ahmedabad
Chennai
Kolkata
Hyderabad
STD
Code
022
Telephone
No.
56349300
Fax No.
Ms. Neetan Singh/
Mr. Sarvesh Sharma/
Mr. Ajeet Chauhan/
Ms. Jyoti Soneja
Mr. Kishore Sheshadri/
Mr. Mahesh Chopra
011
23385704,
23382380,
23388235
23385189
080
2292770,
2223404,
2077119
2292770
Mr. Jinesh Shah
079
30910590
30910590
Mr. A. George
044
28295339,
28293345
28290341
Mr. Premanshu Sharma/
Mr. Vikramjit Sarkar
033
22428023,
22428024
22428023,
22428024
Ms. Neetu Rai/
Mr. Rajesh Pathania
040
55638862
55638862
56360977
84
(R. M. Nayak)
Managing Director & Chief Executive Officer