Bank of Rajasthan

1.  Fixed Assets :
 
 1.1 The immovable properties owned by the bank (Premises & Land -
 referred to as immovable properties) other than properties
 purchased/acquired after I* April 2007 have been revalued on 31 March
 2008. The said revaluation has been carried out in accordance with the
 policy laid down by the Board. Accordingly, the value of all such
 immovable properties owned by the bank, (excluding properties where
 there are certain claims by third parties in regard to the said
 property) has been taken as valued by independent valuers as at 31 of
 March 2008. The net appreciation in value Rs.387.56 crores as
 determined by the valuers has been credited to Capital Reserves
 (Revaluation Reserve).
 
 1.2 In accordance with the Guidance note on treatment of Reserves
 created on revaluation of fixed assets issued by the Institute of
 Chartered Accountants of India, the additional depreciation relatable
 to revaluation amounting to Rs.6.95 crores is adjusted against
 Revaluation Reserve by transfer to Profit & Loss account.
 
 1.3 As a result of changes in the rates of depreciation of revalued
 immovable properties over their remaining estimated useful lives as
 stated in Schedule 17, additional depreciation of Rs.0.15 crores as
 compared to earlier accounting periods has been charged to the Profit &
 Loss account.
 
 1.4 Registration formalities are pending in respect of properties
 valuing Rs.4.97 crores (previous year Rs.4.97 crores)
 
 2.  Intangible Assets :
 
 2.1 In accordance with Accounting Standard (AS) 26 on Intangible
 Assets issued by the Central Government under the Companies
 (Accounting Standards) Rules 2006, operating and banking software,
 integral to banking business having book value of Rs.1.86 crores
 (previous year Rs.0.28 crores) is capitalized to computers subjected to
 depreciation and other software of non-integral nature amounting to
 Rs.0.14 crores (previous year Rs.0.04 crores) is charged off to Profit
 & Loss A/c.
 
 3.  Employee benefits :
 
 In pursuance of AS 15 on Employee Benefits, issued by the Central
 Government under the Companies (Accounting Standards) Rules 2006, the
 following disclosures have been made:
 
 4.  Contingent Liabilities :
 
 4.1 Contingent Liability of Rs.1358.13 crores (previous year Rs.
 1335.86 crores) disclosed in Schedule 12 includes disputed tax
 liability of Rs.2.05 crores (previous year Rs.0.09 crores).
 
 4.2 In accordance with Accounting Standard 29 on Provisions, Contingent
 Liabilities and Contingent Assets issued by the Central Government
 under the Companies (Accounting Standards) Rules 2006, the Bank has
 carried out financial assessment of the contingent liabilities and
 determination of provision for probable losses. The amount of losses
 estimated were Rs.0.03 crores (previous year Rs.0.16 crores) which have
 been charged to Profit & Loss Account.
 
 Disclosures in terms of accounting standard on provisions, contingent
 liabilities and contingent assets.  (a) Movement of provisions for
 liabilities*
 
 						  (Rs. in crores)
 
 Particulars                             Legal cases/ contingencies
 	
 					    31.3.2009 31.3.2008
 
 Balance at the beginning of the year             1.20   1.04
 
 Provided during the year                         0.11   0.16
 
 Amounts used during the year                      Nil    Nil
 
 Reversed during the year                         0.08    Nil
 
 Balance at the end of the year                   1.23   1.20
 
 Timing of outflow/ uncertainties Out flow on settlement/ crystalisation
 	
 *excluding provisions for others
 
 (b) Refer Schedule - 12 on Contingent Liabilities
 
 Such liabilities at S.No. (I), (II), (III), (IV) and (V) are dependent
 upon, the outcome of court / arbitration / out of court settlement,
 disposal of appeals, the amount being called up, the terms of
 contractual obligations, development and raising of demand by concerned
 parties, respectively.  No reimbursement is expected in such cases.
 
 Income / Expenditure
 
 The Bank recognized interest on matured term deposits at the time of
 renewal / withdrawal of the same. In pursuance of RBI circular
 DBOD.No.Leg.BC.34/09.07. 005/2008-09, the Bank has provided interest on
 outstanding matured term deposits as on 31 March 2009 at the savings
 bank rate of 3.50% for the year. As a result of this change, the profit
 for the year is lower by Rs.0.11 crores.
 
 There are no material amounts of expenditure / income required to be
 disclosed as Prior Period items as per AS - 5 on Net Profit or Loss
 for the period, Prior Period Items & Changes in Accounting Policies
 read with RBI guidelines.
 
 B.  DISCLOSURE IN TERMS OF RESERVE BANK OF INDIA REQUIREMENTS
 
 5.  Equity Capital
 
 In terms of Section 12 of the Banking Regulation Act, the Reserve Bank
 of India has directed the Bank to increase its paid-up equity capital
 or reduce its authorized capital. Application for extension of time
 upto June 2008 for compliance with the above had been made to the RBI.
 Pursuant to the resolution passed by the Extraordinary General meeting
 of the members on 30,h May 2008, the Authorised Capital of the Bank has
 been reduced to Rs.265 crores.
 
 6.1 Investments include application money in Mewar Aanchalik Gramin
 Bank, a Regional Rural Bank (RRB) amount to Rs.5.42 crores (previous
 year Rs.4.73 crores). Out of this, Rs.0.35 crores (previous year
 Rs.0.35 crores) is included in Investments under Held to Maturity
 category and balance of Rs.5.07 crores (previous year Rs.4.38 crores)
 pending allotment of shares is included under Other Assets. As per
 Reserve Bank of India (RBI) guidelines, no provision towards diminution
 in the value of Investment in RRB has been made in the accounts.
 
 6.2 The Bank transfers securities, in respect of which, principal
 amount is due for redemption to overdue Investments.  In case where
 principal / interest is overdue for more than 90 days, Investments is
 treated as NPA and provision for depreciation has been made in line
 with prudential norms of RBI (refer note 12.21 below).
 
 6.3 The Bank in the past had contributed to a trust as senior
 contributor for purchase of beneficial interest in secured home loan
 receivables (mortgage backed receivables) originated by another bank.
 The above are continued to be redeemed and are included in Investments
 under Available For Sale category. The said amount is Rs.35.02 crores
 (previous year Rs.45.65 crores).
 
 6.4 As per RBI guidelines, an amount of Rs.25.14 crores (previous year
 Rs.0.08 crores) being profit on sale of securities classified under
 Held to maturity category has been transferred to Capital Reserves.
 
 7.  Advances
 
 Advances given to units which have become sick, including those under
 nursing/ rehabilitation/ restructuring program, and other advances
 classified as doubtful or loss, have been considered secured/
 recoverable to the extent of the estimated/ realizable value of
 security carrying first/ second charge based on assessment of value of
 properties/assets mortgaged and other data available with the Bank.
 
 8.  Additional Disclosures
 
 8.1 Other income includes fees for services amounting to Rs.3.37
 crores rendered to M/s Aviva Life Insurance Co.  Ltd. which was
 apportioned and considered as not accrued during the year 2008-09
 though the same was received during the year 2008-09.
 
 8.2 The Bank has entered into an agreement with M/s Aviva Life
 Insurance Co. Ltd. on 5th March 2009 for the purpose of soliciting,
 promoting, marketing and selling the insurance products being sold by
 the company. The Bank is in the process of acquiring the requisite
 License to act as Corporate Agent of the insurance company. Pending
 necessary clearances from the Regulators, Aviva has agreed to
 compensate the Bank as per the terms of the understanding reached in
 this regard. In accordance with the same during the financial year, the
 Bank has received Rs.2.53 crores from the said insurance company for
 services rendered. This amount has been recognised as income for the
 year 2008-09 and included in Other Income.
 
 8.3 During the year, the Bank has issued 26899574 equity shares of
 Rs.10/- each as fully paid up bonus shares by way of capitalization of
 share premium and general reserves. Due to this, paid up capital of the
 Bank has increased from Rs.134.46 crores to Rs.161.35 crores as on 31
 March 2009 and Reserves & Surplus has decreased by equivalent amount.
 The issue of 7892 shares out of the present bonus issue (being the
 shares relatable to 39,457 shares earlier kept in abeyance) has also
 been kept in abeyance.
 
 9.  Balancing of Books and Reconciliation :
 
 Reconciliation of transactions in interbranch accounts is completed
 upto 31.3.2009 and adjustment of outstanding entries is in progress.
 Sundry and Suspense Accounts contain entries pending adjustment to
 appropriate head of accounts.
 
 10.  All the Accounting Standards referred to in Section 211(3C) of the
 Companies Act, 1956 to the extent applicable to the Bank and mandatorv
 in nature have been comnlied with.