1 Capital
The Banks Capital to Weighted Risk Assets Ratio (CRAR) has been worked
out as per Reserve Bank of India guidelines. The ratios as at 31st
March 2011 are:
2 Investments
2.1 In view of the guidelines of the Reserve Bank of India,
a) Premium of Rs.47.71 crore (previous year Rs. 68.16 crore) has been
amortized in respect of securities under Held to Maturity category.
b) Depreciation of Rs.72.22 crore (previous year Rs.61.74 crore) has been
provided for investments under Available for Sale category.
c) Depreciation of Rs.7.49 crore (previous year Rs.0.14 crore) has been
provided for investments under Held for Trading category.
d) During the year, the Bank as a one-time measure, transferred
securities of book value of Rs.1893.38 crore (Previous year Rs. 2,382.51
crore) from Available for Sale category to Held to Maturity and
also transferred securities of book value of Rs.1064.61 crore (Previous
year Rs.756.60 crore) from Held to Maturity to Available for Sale
category.
e) Pursuant to the guidelines contained in Reserve Bank of India
communication vide DBOD.BP.BC.
No.133/21.04.018/2008-09 dated May 11, 2009, the Bank has recognized as
income Rs.nil(previous year Rs.0.51 crore) representing unreconciled credit
entries in Nostro Mirror Accounts and earlier parked in blocked
account.
f) Pursuant to change in the Accounting Policy as furnished in para
4.5(iv) of Schedule 17, Profit on sale of investments (net) includes
Rs.148.55 crore being income from Liquid Funds (in the previous year the
said income of Rs.306.92 crore was included under schedule 13 Interest
Earned). However there is no impact on the Profits of the Bank.
Investments includes securities of the face value of Rs.122 crores
(Previous year Rs.92 crore), pledged/transferred to CCIL/ MCX/NSE/USE for
availing various facilities. It also includes securities of the face
value of Rs.3200 crore (Previous year Rs.550 crore) transferred in the name
of Reserve Bank of India out of which securities of the face value of
Rs.2100 crore (Previous year Rs. 367.50 crore) encumbered for borrowing
under LAF-Repo as on 31.3.2011.
The Bank has not contracted any exchange traded interest rate
derivatives during the year.
3.3 Disclosure on Risk Exposure in Derivatives:
Qualitative Disclosure:
1. The Banks Derivative Policy as approved by Board permits Bank to
undertake deals in over-the-counter (OTC) as well as exchange traded
(ET) interest rate and currency derivatives. The policy permits the
offering of the products to the customer to manage their foreign
currency exposures, which are to be covered on Back-to-Back basis in
the interbank market. Derivatives can also be used by the Bank both for
trading as well as hedging on-balance sheet items. In the current
financial year Bank has entered into derivative deals involving forwards
and currency futures.
2. The Asset Liability Management Committee (ALCO) of the Bank
overseas management of these risks. The Banks Integrated Risk
Management Department (IRMD), independently identifes, measures and
monitors market risk associated with derivative transactions, assists
ALCO in controlling and managing these risks and reports compliance
with policy prescriptions to the Risk Management Committee of the Board
(RMCB) at regular intervals.
3. Derivative transactions carry market risk i.e. the probable loss
the Bank may incur as a result of adverse movements in interest rates /
exchange rates and credit risk i.e. the probable loss the Bank may
incur if the counterparties fail to meet their obligations. The Banks
Derivative Policy approved by the Board prescribes the market risk
parameters as well as Customer Appropriateness policy for entering into
derivative transactions. Credit risk is controlled by entering into
derivative transactions only with counterparties in respect of whom
appropriate credit limits are sanctioned taking into account their
ability to honour obligations. The Bank enters into International Swap
Dealers Association (ISDA) agreements with each counterparty.
4. The accounting policy for derivatives as stated in Signifcant
Accounting Policies, has been drawn-up in accordance with RBI
guidelines and revenues are recognized accordingly.
5. Asset Quality 5.1 Advances
a) In the case of unaudited branches, the classifcation of advances, as
certifed by the Branch Managers has been incorporated.
b) As against total provision of Rs.363.05 crore (previous year Rs.426.48
crore) required for NPAs in line with RBI guidelines as of 31.03.2011,
provision of Rs.547.76 crore (previous year Rs.345.25 crore) has been made
during the year.
c) Provision on standard advances amounting to Rs.375.75 crore (including
Rs.285.76 crore created in earlier years) is shown as per RBI guidelines,
under Other Liabilities and Provisions others in Schedule No. 5 of
the Ba1ance Sheet.
10. Risk Category wise Country Exposure
The following are the banks countrywise net risk exposure based on the
Country risk classifcation provided by the Export Credit Guarantee
Corporation (ECGC).
11. Details of Single Borrower Limit (SBL), Group Borrower Limit (GBL)
exceeded by the bank.
During the year ended 31.03.2011, the Bank has not exceeded the
exposure ceiling* fxed by RBI to individual borrower / Group except in
the following cases, which have been approved by the Board:
16. Disclosure of Penalties imposed by RBI
During the financial year 2010-11, the Bank has not been subjected to
any penalty for contravention or non-compliance with any requirement of
the Banking Regulation Act, 1949, or any order/ rules or conditions
specifed by the Reserve Bank of India under the said Act.
17. INTER BRANCH TRANSACTIONS
Reconciliation of transactions between Branches, Controlling offces and
Head offce has been done. All inter branch transactions upto 15.03.2011
stand adjusted as at 31.3.2011.
18. BALANCING OF BOOKS
a) Books of account have been balanced and tallied up to 31st March
2011.
b) Other Assets and Other Liabilities and accounts with other
banks/institutions include a few old entries pending reconciliation and
adjustment having no material impact on the Profit & Loss and Balance
Sheet of the Bank.
19. FIXED ASSETS
a) Premises include properties costing Rs. 12.30 crore (previous year
Rs.0.43 crore) for which registration formalities are pending.
b) Fixed Assets include Rs.2.05 crore (previous year Rs.1.75 crore) in
respect of Capital Work in Progress-Premises.
c) During the year 2010-11 cost of software acquired is Rs.10.13 crore
(previous year Rs.6.36 crore) and the amount amortised till 2010-11 is
Rs.6.18 crore (previous year Rs.6.05 crore).
d) Premises include buildings of Rs.3.59 crore (previous year Rs.3.59
crore) which are subject to previous owners right of redemption.
e) Contracts pending execution on Capital account and not provided for
is Rs.6.03 crore (previous Year Rs. 20.26 crore).
20. CASH FLOW STATEMENT (AS 3)
The Cash Flow statement for the year is given separately.
21. EMPLOYEE BENEFITS
21.1 The Bank has accounted for Employee Benefts as per Accounting
Standard 15 issued by the Institute of Chartered Accountants of India.
21.2 A reconciliation of Opening and Closing Balances of the present
value of the defned beneft obligation and the effects during the period
attributable to each of the following is as under:
21.7 During the year, Bank has incurred an incremental liability
towards contribution to gratuity fund to the extent of Rs.78.10 crores
including due to the amendment made in Payment of Gratuity Act, 1972
with regard to enhancement in gratuity limit which has been charged to
Profit & Loss Account.
Further the Bank reopened the pension option for such of its employees
who has not opted for pension scheme earlier. As a result of exercise
of which by 4457 serving employees, the Bank has incurred a liability
of Rs.891.2 crores. In terms of RBI circular
no:DBOD.BP.BC.80/21.04.018/2010-11 dated 9th February 2011, after
reckoning the available pension fund balance of Rs.338.67 crore, the net
incremental liability of Rs.552.53 crore is being amortised over a period
of fve years. Accordingly a sum of Rs.110.51 crore (representing one-ffth
of Rs.552.53 crore) has been charged to the Profit and Loss Account. The
net liability relating to serving employees being carried forward in
terms of the requirements of the aforesaid circular amounts to Rs. 442.02
crores.
An amount of Rs. 74.25 crores being liability arising out of exercising
of reopened pension option by separated/ retired employees has been
charged to Profit & loss account in terms of said circular issued by
RBI.
Had such a Accounting treatment not been made by the Bank the Profit of
the Bank would have been lower by Rs.442.02cror pursuant to application
of the requirements of AS-15.
22. SEGMENT REPORTING
In terms of AS 17 - Segment Reporting, issued by the Institut of
Chartered Accountants of India, the Segment Report ha been given for
the Consolidated Financial Statements.
23. RELATED PARTY DISCLOSURE
In compliance with Accounting Standard 18 - Related Party Disclosures,
issued by the Institute of Chartered Accountant of India read along
with the Reserve Bank of India guidelines the details pertaining to
Related Party transactions are disclosed as under:
Names of Related Party and their Relationship with the Bank:
Subsidiaries: - Corpbank Securities Ltd
Associate (RRB): - Chikmagalur Kodagu
Grameena Bank
(Chiko Bank)
Key Management Personnel: - Mr.Ramnath Pradeep
Chairman & Managing Director
(From 01.09.2010)
- Mr.J.M.Garg Chairman & Managing
Director
(From 01.04.2010 to 31.07.2010)
Mr.Narendra Singh
Executive Director
Mr.Ashwani Kumar
(From 01.12.2010)
Mr.Asit Pal
Executive Director
(From 01.04.2010 to 30.11.2010)
Since, the Bank and its Subsidiary are state controlled, no disclosures
are made pertaining to the transactions with them in accordance with
the requirements of the Accounting Standard 18 issued by the Institute
of Chartered Accountants of India. Accordingly, no disclosure has also
been made in respect of the Rural Regional Bank (RRB) sponsored by the
Bank.
24. Earnings Per Share
a) Basic: Rs. 98.50 per share
b) Diluted: Not applicable as there are no dilutive potential equity
shares.
b) Contingent Liability:
i) Claims against the Bank not acknowledged as debts:
(Rs. in Crore)
Particulars No of Gross Net
claim Claim Claim
Total Claims outstanding
as on 102 38.24 30.27
01/04/2010
Less: Claims deleted/revised 34 5.26 3.88
during the period from
01/04/2010 to 31/03/2011
Add : New Claims added
during the period from 38 270.88 270.43
01/04/2010 to 31/03/2011
Total Claims outstanding as on 106 303.86 296.82
31/03/2011
Subject wise classifcation of the claims outstanding as on March 31,
2011:
(Rs. in Crore)
No. of Gross Net
Particulars Claims Claim Claim
Bank Guarantee 3 0.16 0.01
Cheques/DD/PO etc., 11 0.24 0.05
collection
Credit Portfolio 23 19.55 18.62
Deposits Portfolio 13 0.65 0.13
Vigilance Transactions 21 6.23 2.15
Miscellaneous [Including 35 277.02 275.86
claims on account of
Income Tax & Interest
Tax Demands]
Total 106 303.84 296.82
Contingent Liabilities include Disputed Income tax and interest tax of
Rs. 273.18 crore (previous year Rs. 7.18 crore) for which the Bank has gone
in appeal.
27. Income Tax and Wealth Tax
c) Tax paid in advance and tax deducted at source appearing under
Other Assets includes Rs.286.97crore (previous year Rs.190.17 crore) paid
on account of demands disputed by the Bank, against which the Bank
holds a provision of Rs.76.90crore. The Bank has gone on appeal and no
additional provision is considered necessary in view of favourable
judicial prouncements in similar cases.
28. Drawn Down from Reserves : NIL (Previous Year Nil)
29. Complaints / unimplemented awards of Banking Ombudsmen
30. Letter of Comforts (LOCs) issued by the Bank (other than for
Buyers Credit) during the year is Nil (Previous Year Nil)
31. The Bank raised Upper Tier-II Bonds of Rs.550 crore during the year
in April 2010.
32. a) During the quarter the Bank has issued and allotted
46,92,554 equity shares to Government of India on
preferential basis at a price of Rs.658.49 per Equity share (i.e Rs.10/-
face value and Rs.648.49 towards premium per share) on 29th March 2011.
b) The Issued and Subscribed Capital of the Bank has been raised from
14,34,40,000 to 14,81,32,554 Equity Shares due to allotment of
46,92,554 Equity Shares to Government of India (i.e in the name of ‘
President of India) on a Preferential allotment basis on 29.03.2011.
c) The paid-up Capital of the Bank has been increased from
Rs.143,43,80,500 to Rs.148,13,06,040 due to receipt of calls in arrears for
200 equity shares and allotment money for 46,92,554 Equity Shares
allotted to Government of India on Preferential basis on 29th March
2011.
33. Provisioning coverage ratio of the Bank as on 31.03.2011 is
74.70%.
34. During the year ended 31st March 2011, Bank has received
fee/remuneration of Rs. 7.68 crore from Bancassurance business.
35. The Bank has recommended a dividend of 200% i.e. Rs. 20 per share of
the face value of Rs.10/- each, which is subject to approval of Govt. of
India.
36. Previous years figures have been regrouped/rearranged wherever
necessary. |