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State Bank of Bikaner and Jaipur
BSE: 501061|NSE: SBBJ|ISIN: INE648A01026|SECTOR: Banks - Public Sector
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Mar 12
Notes to Accounts Year End : Mar '13
1.  Investments amounting to Rs. 5400.00 crores (previous year Rs.
 4940.00 crores) are kept as margin with the Reserve Bank of
 India/Clearing Corporation of India Limited towards Real Time Gross
 Settlement (RTGS)/REPO/CBLO transactions.
 
 2.  (a) In respect of premises having gross value of Rs. 0.42 crore
 (Previous year: Rs. 0.42 crore) pending completion of certain legal
 formalities/ procedural actions, title deeds are yet to be executed/
 registered in favour of the Bank
 
 (b) Fixed Assets : Gross Value of fixed assets ( other than premises)
 includes Rs.. 71.58 crores (previous year Rs..  70.64 crores )
 representing 10% of Bank''s share jointly owned by State Bank of India
 and other Associate Bank''s amounts to Rs.. 715.81 Crores (previous year
 Rs.. 706.47 crores)
 
 3.  (a) In terms of the RBI guidelines on provision for the sacrifice
 amount on restructured / rescheduled advances, erosion in fair value of
 advances has been provided amounting to Rs. 127.03 crores (previous
 year Rs. 36.13 crores).
 
 (b) In case of restructured loans as standard asset, classification of
 advances and consequent income recognition have been done based on
 major compliances of terms and conditions of restructured package.
 
 (c) The classification of advances in respect of unaudited branches
 having substantial agriculture loans has been done as per certificate
 of the branch manager. In the opinion of the management there is no
 material impact on the accounts.
 
 4.  The Board of Directors have declared a interim dividend of 161%
 i.e. Rs.. 16.10 per share ( face value of share Rs.. 10/- per share)
 during the FY 2012-13.
 
 5.  Unamortised Pension and Gratuity Liabilities
 
 During the FY 2010-11, the Bank has incurred a liability amounting Rs.
 384.45 Crores on account of reopening of pension option Rs. 234.45
 Crores and enhancement of Gratuity Ceiling Rs.. 150.00 crores. The Bank
 has amortised the said liability over a period of five years commencing
 from FY 2010-11 in terms of RBI circular no. DBOD.
 BP.BC.80/21.04.018/2010-11 dated 9th February 2011. Accordingly, Rs.
 76.89 Crores (Representing one fifth of Rs.  384.45 Crores) has been
 charged to Profit & Loss Account during the current FY 2012-13. The
 detailed break-up is as under:-
 
 DISCLOSURES REQUIRED AS PER RBI GUIDELINES
 
 6.  Capital
 
 a) Capital adequacy
 
 The Bank''s Capital to Risk-weighted Asset Ratio (''Capital Adequacy
 Ratio'') is calculated in accordance with the RBI''s ''Prudential
 Guidelines on Capital Adequacy and Market Discipline - Implementation
 of the New Capital Adequacy Framework'' (''Basel II''). Under the
 Basel II framework, the Bank is required to maintain a minimum capital
 adequacy ratio of 9% on an ongoing basis for credit risk, market risk
 and operational risk, with a minimum Tier I capital ratio of 6%. The
 Prudential Floor is higher of minimum capital is required to be
 maintained as per BASEL - II framework or as a percentage (prescribed
 as 80% for the financial year ending 31st March 2013) of minimum
 capital requirement computed as per BASEL - I framework for credit
 and market risks.
 
 The Bank''s capital adequacy ratio, calculated in accordance with the
 RBI guidelines under both Basel I and Basel II frameworks, is as
 follows :
 
 The Bank''s capital funds as on March 31, 2013 are higher than the
 minimum required under the Basel I and Basel II framework.
 
 The difference between risk weighted assets under the Basel I and Basel
 II framework is a net impact of the following key changes :
 
 Under the Basel II framework, risk weights are applicable to claims on
 corporates corresponding to their external rating or in the absence of
 it ranging from 20% to 150%, compared to a uniform 100% under Basel I.
 
 Exposures qualifying for inclusion in the regulatory retail portfolio
 under Basel II framework attracts a risk weight of 75%, against 100%
 under Basel I.
 
 The Basel II framework recognises risk mitigation techniques in the
 form of eligible financial collaterals such as cash margins, deposits,
 bonds, gold, debt mutual funds, etc., whilst under Basel I only cash
 margins and deposits are considered as eligible financial collateral.
 
 Restructured assets attract a risk weight of 125% under the Basel II
 framework compared to 100% under Basel I. Operational risk is subject
 to a capital charge under the Basel II framework.
 
 Under the Basel II framework, capital is subjected to a charge for
 valuation adjustment for illiquid position of derivative and non
 derivative portfolio.
 
 iii. The value of sales and transfer of securities to/from HTM category
 does not exceeds 5% of the book value of Investments held in HTM
 category at the beginning of the year.
 
 7.  DERIVATIVES
 
 Qualitative Disclosure
 
 a.  The Bank has well defined structure and organization for management
 of risk in derivatives, with clear role of Front, Mid and Back office
 for Risk Management.
 
 b.  For risk measurement and monitoring, Integrated Risk Management
 Department is periodically monitoring risk on account of outstanding
 forward contracts and outstanding forward contracts of top 20 borrower
 account is advised to the user department.
 
 c.  Bank is not undertaking Exchange Traded Interest Rate Derivatives ,
 Forward Rate Agreement, Interest Rate Swaps and Credit Default Swaps.
 
 d.  Bank is not undertaking any trading in derivative transaction in
 its own account. The Bank undertakes Forward contracts with counter
 parties only on behalf of its constituents in order to hedge their on
 balance-sheet/ off-balance- sheet assets and liabilities as per the RBI
 directives.
 
 e.  Forward contracts so booked are covered back to back with counter
 parties.
 
 f.  All outstanding forward contracts are marked to market as per the
 RBI directives and are shown in the balance-sheet as contingent
 liabilities.
 
 ii) Provisioning Coverage Ratio
 
 Provisioning to Gross Non-Performing Assets of the Bank as on 31st
 March, 2013 is 58.64%. (prev. year 58.26%), including AUCA.
 
 8.  Details of Single Borrower Limit (SBL), Group Borrower Limit (GBL)
 exceeded by the bank
 
 The Bank has not exceeded the Single Borrower Limit and Group Borrower
 Limit during the year.
 
 9. Disclosure of Penalties Imposed by RBI
 
 No penalty was imposed during the year as per section 46(4) of the
 Banking Regulation Act 1949 for contraventions of any of the provisions
 of the Act or non compliance with any other requirement of the Banking
 Regulation Act 1949.
 
 10. Draw Down from Reserves
 
 There has been a draw down of Rs.2.29 crores (previous year Rs.11.12
 crores) from Investment Reserve during the year.
 
 11.  AS-5 ( Net Profit or Loss for the period, prior period items and
 changes in accounting policies)
 
 There are no material prior period income/expenditure items require
 disclosure under AS-5.
 
 12.  AS- 9 Revenue Recognition
 
 In line with the Accounting Policy followed, items of income /
 expenditure accounted on cash basis are considered not material, in
 terms of RBI guidelines, hence do not require disclosure.
 
 13.  AS - 15 Employee Benefits (Revised 2005)
 
 The Bank has adopted Accounting Standard 15(R) - Employee Benefits,
 issued by the Institute of Chartered Accountants of India (ICAI), with
 effect from 1st April 2007.
 
 The Bank recognizes in its books of accounts the liability arising out
 of Employee Benefits as the sum of the present value of obligation as
 reduced by fair value of plan assets on the Balance Sheet date.
 
 In case of Other Long term employee benefits (LFC, Sick leave, etc.)
 the transitional liability outstanding for these benefits as on
 31.03.2013 was Rs. 178.76 crores.
 
 14.  AS-17 : Segmental Reporting
 
 In terms of RBI Cir. No. BP.BC.81/21.04.018/2006-07 dated 18th April
 2007, the Bank has identified following segments as Primary / Business
 Segment:
 
 (a) Treasury Operations
 
 (b) Corporate/Wholesale Banking
 
 (c) Retail Banking
 
 (d) Other Banking Operations
 
 Pricing of Inter-segmental transfers:
 
 The Corporate / wholesale Banking and Retail Banking Operations are the
 primary resource mobilizing unit. The treasury segment receives funds
 from the other two Banking Operations unit at a cost, which is computed
 on cost of deposits of Other Banking Operations plus operating expense
 incurred for mobilizing funds.
 
 Allocation of Income and Expenses and Assets/Liabilities:
 
 a) Income and Expenses and Assets/Liabilities directly attributed to
 particular segment are allocated to the relative segment.
 
 b) Items that are not directly attributable to segments are allocated
 to retail and wholesale segments in proportion to the business managed
 / ratio of number of employees/ ratio of directly attributable income.
 
 The bank has certain common assets /liabilities and income / expense
 that cannot be attributed to any particular segment and hence the same
 are treated as unallocated.
 
 PART B: GEOGRAPHIC SEGMENT
 
 The entire Indian Operations are being treated as a single reportable
 segment and hence secondary / geographic segment is not considered
 necessary.
 
 15.  AS-18 : Related party disclosures
 
 As per para 9 of the Accounting Standard 18 issued by the ICAI on
 Related party disclosures the Bank, being a state controlled
 enterprise is not required to make disclosures of related party
 relationships with other state controlled enterprises and transactions
 with such enterprises. However, the Bank has considered the following
 as related parties for the purpose of disclosure under AS-18 issued by
 the ICAI:
 
 16.  AS-19: Leases:
 
 The company''s significant leasing arrangements are in respect of
 operating leases for premises like operational units, offices,
 residences etc. These leases, which are not non-cancelable are
 generally for more than one year or for longer periods (except expired
 leases) and are usually renewable by mutual consent on mutually
 agreeable terms. The aggregate lease rentals payable are charged as
 rent to P&L accounts.
 
 17.  AS-21: Consolidated Financial Statement
 
 Bank has no Subsidiary/Associates hence the information in this regard
 is ''NIL''.
 
 18.  AS-22: Deferred Taxes
 
 The components of deferred tax asset/liability as on 31.03.2013 are as
 under:
 
 19.  AS-23 : Accounting for Investments in Associates in consolidated
 Financial Statements Bank has no Subsidiary/Associates hence the
 information in this regard is ''NIL''.
 
 20.  AS-24: Discontinuing Operations
 
 There has been no discontinuation of operations that has resulted in
 shedding of liability and realization of the assets by the Bank or
 decision to discontinue an operation, which will have the above effect,
 has been finalized by the Bank.
 
 21.  AS-26: Intangible Assets
 
 There are no intangible assets except Software forming integral part of
 hardware included under Fixed Assets amounting to Rs.. 0.56 crore (
 prev. Year Rs.. 0.97 crore)
 
 22.  AS-28: Impairment of Assets
 
 In the opinion of the Management, there is no impairment to the assets
 during the year to which Accounting Standard 28 - Impairment of
 Assets applies.
 
 b) Under Schedule 12 on Contingent Liabilities
 
 Such liabilities are dependent upon the outcome of
 Court/arbitration/out of Court settlement, disposal of appeals and the
 amount being called up, terms of contractual obligations, development
 and raising of demand by concerned parties.
 
 23. Previous year''s figures have been regrouped and reclassified
 wherever necessary to make these comparable with the current year''s
 figures.
Source : Dion Global Solutions Limited
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