IndusInd Bank

1.  Capital Adequacy Ratio:
 
 In terms of its guidelines for implementation of new capital adequacy
 framework issued on 27th April 2007, RBI has directed banks not having
 operational presence outside India to migrate to the revised frame work
 for capital computation (under Basel II) with effect from March 31,
 2009. The migration is proposed in phased manner over a three-year
 period during which banks are required to compute their capital
 requirements in terms of both Basel I and Basel II. The minimum capital
 to be maintained by Bank under the revised frame work is subject to a
 prudential floor of 100%, 90% and 80% of the capital requirement under
 Basel I over the year March 2009, 2010 and 2011 respectively.
 
 2.1 Exchange Traded Interest Rate Derivatives:
 
 The Bank has not undertaken exchange traded interest rate derivative
 transactions during the year.
 
 2.2 Disclosures on Risk Exposure in Derivatives
 
 Qualitative disclosure
 
 The Bank has entered into interest rate swap contracts to hedge
 on-balance sheet assets & liabilities and for trading purposes. The
 Bank has also offered currency option contracts, interest rate swaps
 and forward rate agreements to customers and covered it on back-to-back
 basis.
 
 - The Bank’s Funds & Investments Policy and Market Risk Management
 Policy, approved by the Board, provides for using derivative products
 in an efficient manner as tools for mitigating market risk. The
 Policies cover dealing guidelines and prescribes exposure limits for
 derivative products.
 
 - Risk Management Department independently monitors the derivative
 position of the Bank, and reports Marked to Market position of
 Derivative Portfolio to top management on a daily basis.
 
 - The Basis Present Value (PV01) of the derivative portfolio is also
 computed on a daily basis and reported to top management.
 
 Derivative contracts transacted during the current year were in
 accordance with the prescribed Market Risk Policy and the Funds &
 Investment Policy approved by the Board.
 
 3.1 Single borrower limit and Group Borrower Limit:
 
 During the year the Bank has not exceeded the prudential credit
 exposure limit in respect of Single Borrower and Group Borrowers.
 
 4.1 Disclosure of penalties imposed by RBI :
 
 The Reserve Bank of India has not imposed any penalty on the Bank u/s
 46(4) of the Banking Regulation Act, 1949.
 
 4.2 Fixed Assets :
 
 Cost of premises includes Rs.4.02 crores (previous year Rs.4.02 crores)
 in respect of properties for which execution of documents and
 registration formalities are in progress. Of these properties, the Bank
 has not obtained full possession of one property having WDV of Rs.1.85
 crores (previous year Rs.1.89 crores) and has filed a suit for the
 same.
 
 4.3 Other Assets:
 
 i) ‘Non-banking assets acquired in satisfaction of claims’ includes
 vehicles repossessed by the Bank, which are readily saleable,
 aggregating to Rs.60.13 crores (previous year Rs.56.54 crores).
 
 ii) Other assets include cash collateral (including liquidity facility)
 of Rs.98.36 crores (previous year Rs.210.08 crores) and stock of gold
 on consignment basis of Rs.32.27 crores (previous year Rs.28.97
 crores).
 
 4.4 Other Liabilities and Provisions:
 
 Included in ‘Other Liabilities – Others’ are credit balances in nostro
 accounts aggregating Rs.113.85 crores (previous year Rs.59.04 crores).
 
 4.5 Contingent Liabilities:
 
 Claims against the Bank not acknowledged as debts comprise tax demands
 in respect of which the Bank is in appeal of Rs.167.53 crores (previous
 year Rs.148.07 crores) and the cases sub-judice Rs.80.23 crores
 (previous year Rs.88.55 crores). The above are based on the
 management’s estimate, and no significant liability is expected to
 arise out of the same.
 
 4.6 Other Income
 
 4.6.1 Commission, Exchange and Brokerage includes commission on
 insurance business of Rs.63.84 crores (previous year Rs.38.62 crores).
 
 4.6.2 Miscellaneous income includes recovery from bad debts written off
 Rs.28.89 crores (previous year Rs.42.30 crores), lease rentals Rs.18.80
 crores (previous year Rs.19.69 crores) and others (processing charges,
 cheque return charges and depository services charges, etc.) Rs.103.78
 crores (previous year Rs.86.57 crores).
 
 5.  Disclosures - Accounting Standards :
 
 5.1 Net Profit or Loss for the period, prior period items and changes
 in accounting policies (AS-5) :
 
 There has been no material change in Accounting Policies adopted during
 the year ended March 31, 2009 from those followed for the year ended
 March 31, 2008.
 
 5.2 Employee Benefits (AS-15):
 
 Gratuity:
 
 The benefit of Gratuity is funded defined benefit plan. For this
 purpose the company has obtained a qualifying insurance policy from LIC
 of India (for Consumer Finance Division (CFD)) and Aviva Life Insurance
 Company India Limited (other than CFD) on the basis of actuarial
 valuation as at the balance sheet date.
 
 5.3 Consolidated Financial Statements – Subsidiary(AS 21):
 
 ALF Insurance Services Pvt. Ltd., subsidiary of the Bank, is yet to
 commence operations for want of necessary regulatory approvals.
 Accordingly, no consolidated financial statements have been drawn up as
 per AS-21 “Consolidated Financial Statements”.
 
 5.4 Taxation (AS 22):
 
 (a).  Provision for tax has been made after considering contingency
 provision as admissible deduction.
 
 6.1 Letters of Comfort
 
 Bank has not issued any letter of comfort during the year.
 
 7.  Bank does not carry any floating provision in the books.
 
 8.  Suppliers / service providers covered under Micro, Small, Medium
 Enterprises Development Act, 2006, have not furnished the information
 regarding filing of necessary memorandum with the appropriate
 authority. Hence, information required to be disclosed under section 22
 of the said Act is not given.
 
 9.  Previous year’s figures have been regrouped/ reclassified wherever
 necessary.