Canara Bank
BSE: 532483 | NSE: CANBK | ISIN: INE476A01014 | Banks - Public Sector
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Notes to Accounts | Year End : Mar '09 |
1 Investments:
The percentage of investments under Held to Maturity category – SLR
as on 31.03.2009 was 20.43% of Demand and Time Liability of the Bank
(Previous year 16.04%), which is within the permissible limit as per
RBI guidelines.
2 Inter-Branch Transactions:
The initial matching of entries received at Head Office for the purpose
of reconciliation under Inter-Branch transactions up to 31.03.2009 has
been done. Bank is continuing its efforts to reconcile and reduce the
remaining outstanding entries.
3 Premises:
Premises include certain properties of Rs.196.31Crore in respect of
which conveyance deeds are pending execution.
Certain properties of the bank are stated at revalued amounts. The
gross amount of revaluation is Rs. 2310.91. Crore (Previous year
Rs.2310.91 Crore) and net of depreciation is Rs.2168.16 Crore (Previous
year Rs. 2204.85 Crore).
4. Risk exposure in derivatives:
INTEGRATED TREASURY - Qualitative Disclosures
The Treasury Risk Management Policy, approved by the Board of
Directors, on the use of derivative instruments to hedge /trade is in
place.
a) The Investment Portfolio of the Bank consists of assets with
characteristics such as fixed interest rate, zero coupon and floating
interest rates and is subject to interest rate risk. The Bank also has
Tier II bonds hedged for interest rate swaps which do not have exit
option. The policy permits hedging the interest rate risk on this
liability as well.
Bank is permitted to use FRA and IRS and only plain vanilla
transactions are permitted. These instruments are used not only for
hedging the interest rate risk in the investment portfolio but also for
market making.
Bank has been undertaking derivatives trades like IRS, FRAs, etc for
the purpose of hedging FC liabilities also. Options and swaps are also
undertaken on behalf of clients on back to back basis. Bank is yet to
start Option book running.
b) The risk management policies and major control limits like stop loss
limits, counterparty exposure limits, PV01,etc approved by the Board Of
Directors are in place. These risk limits are monitored and reviewed
regularly. MIS/Reports are submitted periodically to Risk Management
Committee. The hedge effectiveness of the outstanding derivative deals
are monitored in relation to the underlying asset/liability on an
ongoing basis.
c) Accounting Policy
Hedge Positions
Accrual on account of interest expenses/ income on the IRS are
accounted and recognized as income/expense.
Hedge effectiveness of the outstanding derivative deals are monitored
in relation to the fair value of the swap and underlying
asset/liability. Bank has used the FIMMDA pricing method ie. relevant G
SEC yield + Corporate bonds spread for arriving at the fair value of
the underlying Assest/Liability. If the hedge is not effective, hedge
swaps is accounted as trading swaps. If swap is terminated before
maturity, the MTM loss/gain and accruals till such date are accounted
as expense/income under Interest Paid/Received on IRS.
Trading Positions
Trading swaps are marked to market at frequent intervals and changes
are recorded in the income statements.
Accrual on account of interest expenses/ income on the IRS are
accounted and recognized as expense/income.
Gains or losses on termination of swaps are recorded as immediate
income or expenses under the above head.
5. Related Party Disclosures – Accounting Standard-18:
Names of Related parties and their relationship with the Bank-
6 Key Management Personnel
i) Shri A .C .Mahajan, Chairman & Managing Director (from 01/07/2008)
ii) Shri M B N Rao, Chairman & Managing Director ( upto 30/06/2008)
iii) Shri Jagadish Pai. K.L, Executive Director (from 04/02/2009)
iv) Shri H. S. Upendra Kamath, Executive Director (from 26/03/2009)
v) Shri D L Rawal, Executive Director (upto 31/12/2008)
vi) Shri G S Vedi, Executive Director ( upto 15/10/2008)
7 Subsidiaries
i) Canbank Financial Services Ltd.
ii) Canbank Venture Capital Fund Ltd.
iii) Canbank Factors Ltd.
iv) Canara Robecco Asset Management Company Ltd.
v) Canbank Computer Services Ltd.
vi) Canara Bank Securities Ltd. (formerly GILT Securities Trading
Corpn.Ltd)
vii) Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd
8 Joint Ventures
i) Commercial Bank of India LLC., Moscow
9 Associates
i) Canfin Homes Ltd.
ii) Commonwealth Trust (India) Ltd.
iii) CARE Ltd
iv) Regional Rural Banks sponsored by the Bank
a) Pragati Gramin Bank
b) South Malabar Gramin Bank
c) Shreyas Gramin Bank
10 Disclosure about transactions with Key Management Personnel is as
under:
Remuneration to Key Management Personnel Rs.31,34,164.41
(Previous Year: Rs. 35,80,511.17)
11 Financial Reporting of Interests in Joint Ventures – Accounting
Standard 27
Investments include Rs.31.53 Crore (at the exchange rate of the
transaction date) in the Commercial Bank of India LLC (Incorporated in
Russia) wherein the Bank owns 40% of the equity.
12 Contingent Liabilities:
Contingent liabilities as mentioned in Schedule No. 12 are dependent
upon, the outcome of court, arbitration, out of court settlement,
disposal of appeals, the amount being called up, terms of contractual
obligations, devolvement and raising of demand by concerned parties
respectively. No reimbursement is expected in such cases.
13. Issuance of Letters of Comfort/Guarantee regarding their
subsidiaries:
Bank has issued letter of Guarantee to China Banking Regulatory
Commission, China while opening of the Shanghai branch.
14. Disclosures as per Basel II norms enclosed herewith will form part
of the Notes on accounts.
15. Figures of the previous year have been regrouped / rearranged /
reclassified wherever necessary. |
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| Source : Religare Technova | |
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