Dena Bank

1 a. Initial matching of entries in respect of Inter Branch
 transactions has been done up to February 2009 for the purpose of
 reconciliation, which is an ongoing process.
 
 b.  Balancing of subsidiary ledgers/registers and reconciliation with
 general ledgers are in progress at some branches.  Outstanding entries
 in some heads of account including demand drafts payable, drafts paid
 ex-advice, suspense accounts, dividend/ interest warrants, refund
 orders paid and clearing adjustments between service branches and
 participating branches in clearing are in the process of
 reconciliation/ adjustments.
 
 c.  Balances with Reserve Bank of India/ other banks have been
 reconciled except certain entries under process of reconciliation.
 
 d.  The consequential impact on the accounts of all as stated above [in
 a., b., c] is not ascertainable pending reconciliation / balancing /
 adjustment.
 
 2 Provision on standard assets has been given effect in the accounts
 according to revised RBI guidelines as under:
 
 a.  0.25% on direct advances to Agriculture and SME
 
 b.  0.40% on other Standard Advances
 
 3 The classification of advances and provisioning there- against in
 case of 245 un-audited branches has been incorporated as certified by
 the branch mangers.
 
 4 The Bank has transferred Rs. 126.80 Crores (Previous year Rs.
 107.94 Crores) to Statutory Reserve out of profit of Rs.  422.66 Crores
 for the year (Previous year Rs. 359.79 Crores) & Rs. 26.13 Crores to
 Capital Reserve (Net of taxes and Transfer to Statutory Reserve)
 (Previous year Rs. 14.46 Crores) from the profit on sale of investments
 held under HTM Category.  The Bank has transferred Rs. 20.00 Crores in
 Special Reserve created u/s 36 (1) (viii) of the Income Tax Act, 1961
 (Previous Year Rs. 25.00 Crores). The Bank has also transferred Rs.
 209.47 Crores to Revenue Reserve (Previous Year Rs. 178.83 Crores)
 after proposed dividend (inclusive of dividend tax) of Rs.  40.27
 Crores (Previous Year Rs. 33.56 Crores).
 
 5 Non-banking asset (land) acquired in satisfaction of claim
 amounting to Rs. 9.86 crores (Previous Year. Rs. 9.86 crores) is
 pending for registration.
 
 v. The Bank has amortized Rs. 30.26 crores during the year (Previous
 year Rs. 34.15 crores) for securities classified under Held to
 Maturity category, in terms of accounting policy 17.2 and the amount
 has been charged to Profit and Loss Account by reducing value of the
 respective securities to that extent.
 
 vi. In accordance with the guidelines issued by RBI, the bank has
 shifted securities within the categories during the year.  The
 consequential depreciation amounting to Rs. 7.81 crores (previous year
 Rs. 57.15 crores) on account of shifting securities from Available for
 Sale category to Held to Maturity category has been charged to
 Profit & Loss Account by reducing book value of these securities.
 
 vii. The Bank has investment of Rs 21.72 crores (Previous year Rs 21.72
 crores) in two Regional Rural Banks (RRBs) sponsored by the Bank. This
 includes Investment of Rs. 20.32 crores (Previous Year Rs 20.32 crores)
 by way of Share Capital deposits, towards recapitalisation of the RRBs.
 Diminution in value of Investment in one of the RRB has not been
 recognized as the said investment has been valued at cost in accordance
 with the RBI guidelines.
 
 c.  Disclosures on risk exposure in derivatives:
 
 i. Qualitative disclosure
 
 One overnight interest rate swap (OIS) transaction of Rs. 25 crores was
 undertaken by the bank during the year.
 
 Risk Category wise country exposure:
 
 a. In respect of Foreign Exchange transactions, where the Banks net
 funded exposure computed as per the guidelines of the RBI with each
 country exceeded 1% of the total assets of the Bank, the required
 provision.  Since, Banks net funded exposure in any country does not
 exceed 1 % of total assets, no provision (Previous year Nil) is made.
 
 b.  Single Borrower Limit (SGL), Group Borrower Limit (GBL) exceeded by
 the Bank
 
 During the year the Bank has not exceeded the prudential credit
 exposure limit in respect of any Group account / single borrower.
 
 6 The Bank was not subjected to any penalty by Reserve Bank of
 India during the year.
 
 7 Details of Provisions and Contingencies debited to the Profit and
 Loss Account during the year:
 
                                                  (Rs. in crores)
 
 Particulars                                2008-09             2007-08
 
 (i)  Provision for Non Performing Assets    199-44              264.00
 (ii) Provision for Income Tax               243.91           (-) 41.25
 (iii)Deferred Tax Liability (Net)       (-) 127.92            (-) 2.89
 (iv) Provision for Fringe Benefit Tax         2.78                1.89
 (v)  Provision for Standard Assets 
 including interet sacrifice on
 restructured accounts                    (-) 54.78               78.18
 (vi) Provision for Depreciation on           21.05               27.58
 Investments
 (vii) Contingent liabilities                 18.84                1.39
 (viii)Others                                  0.38            (-) 2.25
 Total                                       303.70              326.65
 
 - Rs. 3. 21 crore pertains to previous years.  18.15
 
 Provision for Income Tax:
 
 a. During the year, pursuant to various assessments / appellate /
 rectification orders, excess provision for Income Tax pertaining to
 earlier years, no longer required, has been written back to the tune of
 Rs. 38.53 crores (previous year Rs. 140.64 crores) and included in the
 net profit for the year.
 
 8 The advances covered by Bank/ Govt. Guarantee [shown in Schedule
 - 9 Para B (ii)] includes Rs. 2362.56 crores [Previous Year Rs 1709.20
 crores] guaranteed by various State Governments.
 
 9 DISCLOSURE AS PER ACCOUNTING STANDARDS (AS):
 
 a.  Disclosure as per AS 5:
 
 In compliance with the guidelines issued on 22-08-2008 by Reserve Bank
 of India, the bank has changed its accounting policy so as to provide
 interest on the matured deposits unpaid/unclaimed. Accordingly,
 interest at savings bank rate has been provided on estimated basis on
 such deposits w.e.f. the said date. As a result of this change, current
 years profit is decreased by Rs. 7.65 crore with a consequential
 impact on other liabilities.
 
 b.  Disclosure as per AS 10:
 
 Two plots of land at Gandhidham, which were in the possession of the
 bank since long but in regard to which legal formalities for
 registration were not complete, have been included in the value of
 premises at their present market value (based on valuation reports
 obtained). The net amount added to the premises Rs. 1.57 Crores has
 been credited to Capital Reserves (Revaluation Reserve).  No other
 assets in this block have been revalued during the year.
 
 c.  Disclosure as per AS 11:
 
 Net income on account of exchange differences credited in the Profit
 and Loss account for the year is Rs. 43.86 crores (previous year: Rs.
 42.03 crores).
 
 h.  Taxes on Income - Accounting Standard 22:
 
 The Bank has complied with requirements of AS 22 on Accounting for
 Taxes on Income issued by ICAI and accordingly, deferred tax assets
 and liabilities are recognized.
 
 i. Discontinuing Activities - Accounting Standard 24: During the year,
 Bank has closed down its own credit card business. Value of assets and
 liabilities from said business is negligible. Hence not reported
 separately.
 
 j. Accounting Standard 28: In the opinion of the Management, there is
 no impairment to its assets, to which Accounting Standard- 28 is
 applicable.
 
 k. Disclosure in terms of Accounting Standard 29 on provisions,
 contingent liabilities and contingent assets.
 
 During the year, Bank has made adhoc provision of Rs. 70 crore for
 proposed wage revision on estimated basis, which will be crystallized
 on signing the agreement between IBA and employee unions.
 
 ii. Item Nos (I) to (V) of the Schedule 12 of the balance sheet on
 contingent liabilities, reflect the various types of contingent
 liabilities categorized according to their nature.  These amounts are
 estimated on the basis of documents related to the basic contracts or
 claims made. Outflow on account of these contingent liabilities would
 depend upon the outcome of disposal of litigations by the respective
 judicial authorities, execution of contracts, invocation of guarantees,
 devolvement of LCs, settlement of claims etc. The possibility of any
 reimbursement in such cases is not ascertainable at this stage.
 
 10 Previous years figures have been regrouped/
 reclassified/re-arranged, wherever necessary, to make them comparable
 with the current years figures.