APSFC net zooms 328% in 2003-04

The Andhra Pradesh State Finance Commission (APSFC) reported a 328 per cent increase in net profit at Rs 10.10 crore for the financial year ended on March 31, 2004 as compared to Rs 2.36 crore it achieved during the previous financial year.

Addressing a press conference, APSFC chairman M Gopalakrishna said: "The corporation retained the lead position among the other SFCs in the country for the third year in succession by achieving the highest sanctions, disbursements and percentage of recovery."

APSFC surpassed the targets set by the Small Industries Development Bank of India (Sidbi) in the business plan and recourse forecast for the financial year 2003-04.

APSFC sanctioned Rs 431 crore as against its sanction target of Rs 419 crore and disbursed Rs 283 crore as against the target of Rs 275 crore.

APSFC has also achieved the highest recovery rate ever of Rs 451 crore as against the target of Rs 430 crore for the financial year ended on March 31, 2004.

The corporation hopes to sanction Rs 500 crore, disburse Rs 350 crore and recover Rs 475 crore during the current financial year.

According to Gopalakrishna, the tripartite MoU that the corporation signed with Sidbi and the state government in November 2003 helped it reduce the lending rates by two per cent and also restructure the loans up to 10 years.

He said that APSFC received Rs 2 crore towards equity contribution from the state government. Gopalakrishna also said that the government had agreed to extend state guarantees to the loans raised by the corporation.

The cumulative non-performing assets of the corporation came down from Rs 169.87 crore to Rs 165.43 crore. While the gross NPAs were contained at 37.09 per cent as on March 31, 2004 as compared to 38.23 per cent last year. The net NPAs were brought down to 25.83 per cent from 27.25 per cent.

"Though the overall net NPAs have reduced by only 1.42 per cent, there was substantial reduction in doubtful category assets resulting in the decrease of the aggregate provision to Rs 4.43 crore for the financial year end," Gopalakrishna said.

Gopalakrishna said that for the financial year 2004-05, the corporation hopes to lower the cost of borrowing through prepayment or reduction in rates of relatively high cost statutory liquidity requirement (SLR) borrowing.

"The corporation has already approached some of the bond holders to accept prepayment of the high cost SLR bonds and ask the government to reduce interest rates," he said.