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IDBI Bank

BSE: 500116|NSE: IDBI|ISIN: INE008A01015|SECTOR: Banks - Public Sector
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Notes to Accounts Year End : Mar '19

# Government of India infused Rs. 7881 crore on March 28, 2018 through Recapitalization Bonds and the same has not been allotted and shown as ''Equity Share Application Money'' as at March 31, 2018. On the basis of RBI letter dated April 23, 2018, the Bank has considered such ''Equity Share Application Money'' as a part of Common Equity Tier 1 (CET1) Capital as at March 31, 2018.

** Includes Share Capital of Rs. 3555 crore (Rs. 778 crore ) and Share Premium of Rs. 18069 crore (Rs.4206 crore)

RBI vide circular no DBR.No.BP.BC.83/21.06.201/2015/16 dated 1st March,2016 has given discretion to banks to consider Revaluation reserve / DTA for purpose of computation of capital Adequacy as CET-1 capital ratio. The bank has exercised the option in the above computation.

I. RBI vide its circular dated April 2, 2018 and June 15, 2018 permitted banks an option to spread provisioning for Mark to Market (MTM) losses on investments in AFS and HFT categories for the quarters ended December 31, 2017, March 31, 2018 and June 30, 2018 equally over the four quarters commencing with the quarter in which losses were incurred. The Bank has availed the benefit of spreading of MTM losses and an amount of Rs. 383.63 crore was unamortised as on 31.03.2018. the said amount along with spreading benefits availed during FY 2018-19 has been amortised fully during the current year and there are no further unamortised MTM losses as on march 31, 2019. Investment Fluctuation Reserve (IFR) : In view of the losses for the current FY 2018-19, the bank has not created IFR.

a. During the year ended March 31, 2019, the value of sales and transfers of securities to/from HTM category (excluding onetime transfer to/from HTM category with the approval of Board of Directors permitted to be undertaken by banks at the beginning of the accounting year and sale to RBI under pre-announced Open Market Operation (OMO) auctions) has not exceeded 5% of the book value of the investments held in HTM category at the beginning of the year. The same is in regard to RBI extant guidelines for compliance with SLR requirements.

1. Disclosures on risk exposure in derivatives- Qualitative disclosures

(i) The Bank uses derivatives for Hedging its own balance sheet items as well as for Trading purposes. The use of such derivatives gives rise to various risks like credit risk, market risk, operational risk, legal risk etc.

(ii)The Bank has a well defined structure to manage these risks, consisting of risk policy, risk management organization, risk measurement and monitoring process, limit structure and system infrastructure. The Bank has an independent Risk Management Department, headed by a Chief General Manager designated also as Chief Risk Officer. The Risk Management Group is functionally responsible for measurement, monitoring and reporting of risks in accordance with the policies, processes, parameters and limits defined by the Board as well as the applicable regulatory guidelines. Risk is managed under the overall supervision of Asset Liability Management Committee with regular reporting to Risk Management Committee of the Board as well as to the Board.

(iii) Risk exposures in derivatives transactions are measured/ assessed, in both quantitative and qualitative terms, to capture credit risk, market risk and operational & legal risk. Prior to the execution of derivative transaction, it is ensured that credit risk exposure to the client/counterparty, measured in terms of Loan Equivalent Risk (LER), is within the approved limit and the client/counterparty has the necessary understanding of the transaction. Market risk exposure is measured and managed in terms of positions, duration or tenor, sensitivities to market rates, gaps, greeks, stop loss etc. Operational risks are addressed by having adequate system infrastructure and control mechanism in place. Legal risks are taken care of by execution of necessary legal agreements and documentation.

(iv) The accounting policy for derivatives has been drawn up in accordance with RBI guidelines, the details of which are contained in Schedule No.17 “Significant Accounting Policies of the Bank”.

2. The Bank has Board approved limit for Net Overnight Open Position (NOOP) fixed at Rs. 400 crore w.e.f from November 01, 2017. During the year the open position was within the approved limit and the average utilization was Rs. 298.22 crore. The maximum utilization during the year was at Rs. 368.41 crore on December 10, 2018.

Credit Default Swaps

The Bank is using standard model for marking to market the CDS contracts as per FIMMDA published daily CDS curve and day count convention to value their CDS positions. FIMMDA is publishing the CDS curves for this purpose on daily basis.

3. As per RBI Circular RBI/2015-16/423 DBR.No.BPBC.102/21.04.048/2015-16 dated June 13, 2016 Bank has made the following disclosure in Notes to Accounts with regard to the quantum of provision made during the year to meet the shortfall in sale of NPAs to SCs/RCs and the quantum of unamortised provision debited to ‘other reserves’ as at the end of the year.

a) quantum of provision made during the year to meet the shortfall in sale of NPAs to SCs/RCs- Nil

b) quantum of unamortised provision debited to ‘other reserves’ as at the end of the year.- Nil

4. Prudential Exposure Limits

During the Year ended March 31, 2019, the Bank''s exposure to single borrowers and group borrowers were within the prudential exposure limits prescribed by RBI, where single borrower limit of 15% & 20% (for Infrastructure) of TCF was exceeded and Group borrower limit of 40% of TCF (Quarterly breach mentioned below). In respect of these cases, the sanctioned limits and outstanding as % of capital funds (including non-funded exposure) were as follows:

* In case of multiple breaches observed during the year, the maximum breach observed and corresponding outstanding percentage have been reported.

Note : During the year, the Bank has revised its Capital Fund calculation methodology & the regulatory capital calculated as per Basel III is now considered as Capital fund which includes deduction of losses on quarterly basis. Consequently the above breaches are observed due to change in capital position.

* Other Provision and Contingencies inter alia includes provision for Non Banking Assets acquired in satisfaction of claims of Rs. 713.60 crore (Rs.NIL), provision for uncollected/unrealised charges of Rs. 253.05 crore (Rs.121 crore), provision for revaluation loss on accumulated unremitted profit/loss of Overseas branches on account of accumulated net provisions of Rs. 294.15 crore (Rs.NIL).

Total amount of unsecured advances for which intangible securities such as charge over the rights, licenses, authority etc. has been taken is Rs.NIL (Rs.NIL) and the estimated value of intangible security as on March 31, 2019 is Rs.. Nil (Rs.NIL).

I. Unhedged Foreign Currency Exposure

The Bank, as detailed in its Credit Policy, monitors the Unhedged Foreign Currency Exposure of its borrower and pursues its clients to hedge their forex exposure to minimize the losses due to adverse exchange rate fluctuation.

The Bank obtains information on Un-hedged Foreign Currency Exposure from its customers on a periodic basis and maintains the same in an internally developed system and follows the methodology for computation of likely loss on account of exchange rate movement. The incremental provisioning for the year ending 31-03-2019 towards this exposure worked out to write back of Rs 19 crore (write back of Rs. 205.62 crore) and capital held towards the risk stood at Rs. 46.25 crore (Rs. 96.83 crore) as on 31-03-2019.

* The average weighted and un-weighted amounts are calculated taking daily simple average from 1st April, 2018 to 31st March, 2019 for working days.

Qualitative disclosure around Liquidity Coverage Ratio ( LCR ) :

In the backdrop of the global financial crisis that started in 2007 the Basel Committee on Banking Supervision (BCBS) proposed certain reforms to strengthen global capital and liquidity regulations with the objective of promoting a more resilient banking sector. In this direction BCBS published guidelines on ‘Basel III: The Liquidity Coverage Ratio and liquidity risk monitoring tools’ in January 2013 and the ‘Liquidity Coverage Ratio Disclosure Standards’ in January 2014. Accordingly, Reserve Bank of India, vide its circular dated June 09, 2014, issued guidelines on Liquidity Coverage Ratio (LCR).

5. The LCR promotes short-term resilience of banks to potential liquidity disruptions by ensuring that they have sufficient high quality liquid assets (HQLAs) to survive an acute stress scenario lasting for 30 days. The LCR standard aims to ensure that a bank maintains an adequate level of unencumbered HQLAs that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario specified by supervisors.

The LCR requirements are binding on banks from January 1, 2015. However, with a view to provide a transition time for banks, the requirement is minimum 60% for the calendar year 2015 i.e. with effect from January 1, 2015, and rise in equal steps of 10% over a period of 4 years to reach the minimum required level of 100% on January 1, 2019.

High Quality Liquid Assets

Under the standard, banks must hold a Stock of unencumbered HQLA to cover the total net cash outflows over a 30-day period under the prescribed stress scenario. In order to qualify as HQLA, assets should be liquid in markets during times of stress and, in most cases, be eligible for use in central bank operations. The HQLA of the Bank mainly comprise of SLR investments over and above mandatory requirement, liquidity available by way of borrowing under Marginal Standing Facility (2% of NDTL), Facility to Avail Liquidity for Liquidity Coverage Ratio (13% of NDTL) & other securities issued by PSEs or non-financial corporates.

Total expected cash out flows are calculated by multiplying the outstanding balances of various categories or types of liabilities and off-balance sheet commitments by the rates at which they are expected to run off or be drawn down. Total expected cash inflows are calculated by multiplying the outstanding balances of various categories of contractual receivables by the rates at which they are expected to flow in.

6. Liquidity Management

The Bank has well organized liquidity risk management structure as enumerated in ALM Policy which is approved by the Board. The Asset Liability Management Committee ( ALCO ) of the Bank monitors & manages liquidity and interest rate risk in line with the business strategy. ALM activity including liquidity analysis & management is conducted through coordination between various ALCO support groups residing in the functional areas of Balance Sheet Management, Treasury Front Office, Budget and Planning etc. ALCO directives and ALM actions are implemented by the business groups and verticals. The average LCR of the Bank for FY2018-19 is at 114.37% (102.87%).

Qualitative disclosures

(a) Information relating to the composition and mandate of the Remuneration Committee.

- Name, composition and mandate of the main body overseeing remuneration:

- On February 25, 2019, the Nomination Committee and the Remuneration Committee was merged into a single committee known as Nomination and Remuneration Committee (NRC). The NRC comprises of five members with an Independent Director, as its chairman and Government Nominee Director, LIC Nominee Director and two other i Independent Directors as other members. The Committee fulfils the mandate/ terms of reference provided under | Section 178 of the Companies Act, 2013, Regulation 19 and Part D of Schedule II of the LODR Regulations and RBI | guidelines in respect of fit and proper status of Directors as under.

- Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board of Directors a policy relating to appointment and evaluation of Directors;

- To specify the manner for effective evaluation of performance of the Board, its Committees and individual directors, to be carried out either by the Board, by the NRC or by an independent external agency and review its implementation and compliance;

- Formulation of criteria for evaluation of performance of Independent Directors and the Board of Directors;

- Devising a policy on diversity of Board of Directors;

- To identify persons who are qualified for appointment as Independent Directors in accordance with Directors’ Appointment and Evaluation Policy;

- To recommend to the Board the appointment and removal of Directors in accordance with the criteria laid down in the Directors’ Appointment and Evaluation Policy;

- To undertake a process of due diligence to determine the suitability of any person for appointment / continuing to hold appointment as a director on the Board, based upon qualification, expertise, track record, integrity, ‘fit and proper’ criteria, positive attributes and independence (if applicable) and on the basis of the report of performance evaluation of directors including independent directors and formulate the criteria relating thereto;

- Formulation of Remuneration Policy for Directors, KMPs, etc;

- Recommend to the Board, all remuneration, in whatever form, payable to the senior management;

- To work in co-ordination with Risk Management Committee in order to achieve effective alignment between remuneration and risks

As on March 31, 2019, the NRC comprised of five members with Shri Gyan Prakash Joshi, Independent Director, as i its chairman and Shri Pankaj Jain, Government Nominee Director, Shri Rajesh Kandwal, LIC Nominee Director, Shri i B. B. Joshi & Shri N. Jambunathan, Independent Directors as other members

External consultants whose advice has been sought, the body by which they were commissioned, and in what areas of the remuneration process

During the year 2018-19, no external consultants were appointed for seeking advise in any of the areas of remuneration process

A description of the scope of the Bank’s remuneration policy including the extent to which it is applicable to foreign subsidiaries and branches:

The Committee monitors the remuneration policy for both domestic and overseas branches of the Bank on behalf of i the Board. However, it does not oversee the compensation policy for subsidiaries of the Bank.

A description of the type of employees covered and number of such employees:

Category 1

MD & CEO and WTDs. This category includes 3 employees. Prior to the acquisition by LIC, being a Government owned public sector bank, the remuneration of Whole Time Directors was fixed by GoI as per the appointment orders of the respective Whole Time Directors, while the Non- Executive Directors were paid sitting fees as per the rates prescribed by GoI and followed by all Public Sector Banks. No other remuneraton are paid to non-Executive Directors. Post acquisition by LIC and re-categorization by RBI as a Private Sector Bank w.e.f January 21, 2019, the Whole Time Executive Directors’ appointments and remuneration requires prior approval of RBI.

During the FY 2018-19, upon nomination by LIC and approval from RBI, Shri Rakesh Sharma MD & CEO was continued as MD & CEO by fresh appointment on the same remuneration as per the appointment order issued by GoI. As regards the appointments of other WTDs, Board had approved continuation of the service of Existing two WTDs(DMDs) till the appointment of new DMDs. Hence as on 31st March 2019, the existing incumbents continued to hold position of WTDs (DMDs) on their existing remuneration as per earlier appointment letter issued by GoI. Category 2

Remuneration of Key Managerial Personnel:

The positions of CFO and CS are held by cadre officers of IDBI Bank and their Pay Scales and Remuneration structure would be equivalent to the Pay Scales and Remuneration structure being offered by IDBI Bank to the other parallel grade officers and would be finalized by the Bank with the approval of the Board of Directors Category 3: other Officers and employees

The Pay Scales and Remuneration structure of IDBI Bank''s Officers and Employees are finalized by IDBI Bank after obtaining Board of Directors'' approval. As per the current policy, the pay scales and remuneration structure is a fixed structure, which is drawn out on the lines of IBA pay scales and structure, and runs co-terminus with the industry level settlements for a period of 5 years.

Count of Officers and employees is given below:

(b) Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy

An overview of the key features and objectives of remuneration policy:

During the year 2018-19, LIC had on January 21, 2019 completed acquisition of 51% Controlling Stake in IDBI Bank and was reclassified as Promoter of the Bank on and from the aforesaid date.

Prior to the acquisition by LIC, being a Government owned public sector bank, the remuneration of Whole Time Directors was fixed by GoI as per the appointment orders of the respective Whole Time Directors, while the Non-Executive Directors were paid sitting fees as per the rates prescribed by GoI and followed by all Public Sector Banks. No other remuneration is paid to non-Executive Directors. Post acquisition by LIC and re-categorization by RBI as a Private Sector Bank w.e.f. January 21, 2019, the Whole Time Executive Directors’ appointments and remuneration requires prior approval of RBI.

During the FY 2018-19, upon nomination by LIC and approval from RBI, Shri Rakesh Sharma MD & CEO was i continued as MD & CEO by fresh appointment on the same remuneration as per the appointment order issued by GoI. As regards the appointments of other WTDs, Board had approved continuation of the service of Existing two WTDs (DMDs) till the appointment of new DMDs. Hence as on 31st March 2019, the existing incumbents continued i to hold position of WTDs (DMDs) on their existing remuneration as per earlier appointment letter issued by GoI. Objective of the Remuneration Policy To ensure that:

a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the company and its goals:

(c) Description of the ways in which current and future risks are taken into account in the remuneration processes. It includes the nature and type of the key measures used to take account of these risks.

During the year 2018-19, LIC had on January 21, 2019 completed acquisition of 51% Controlling Stake in IDBI Bank and was reclassified as Promoter of the Bank on and from the aforesaid date.

Prior to the acquisition by LIC, being a Government owned public sector bank, the remuneration of Whole Time Directors was fixed by GoI as per the appointment orders of the respective Whole Time Directors, while the Non- Executive Directors were paid sitting fees as per the rates prescribed by GoI and followed by all Public Sector Banks. No other remuneration are paid to non-Executive Directors. Post acquisition by LIC and re-categorization by RBI as a Private Sector Bank w.e.f January 21, 2019, the Whole Time Executive Directors’ appointments and remuneration requires prior approval of RBI.

During the FY 2018-19, upon nomination by LIC and approval from RBI, Shri Rakesh Sharma MD & CEO was continued as MD & CEO by fresh appointment on the same remuneration as per the appointment order issued by GoI. As regards the appointments of other WTDs, Board had approved continuation of the service of Existing two WTDs(DMDs) till the appointment of new DMDs. Hence as on 31st March 2019, the existing incumbents continued to I hold position of WTDs (DMDs) on their existing remuneration as per earlier appointment letter issued by GoI.

Whether the remuneration committee reviewed the firm’s remuneration policy during the past year, and if so, an overview of any changes that were made:

During the FY 2018-19 the bank has not reviewed its remuneration policy. However, consequent to Acquisition of 51% Controlling Stake by LIC in IDBI bank, the bank had revised its remuneration policy so as to cover the resultant changes due to acquisition by LIC, and also covering amendments to the Companies Act, 2013 and SEBI (LO DR) Regulations, 2015 which was approved by the NRC and Board in its meetings held on May 13, 2019.

A discussion of how the Bank ensures that risk and compliance employees are remunerated independently of the businesses they oversee:

On May - 2017, RBI had put IDBI Bank under PCA and imposed several restrictions including granting any performance linked incentives to the WTDs in view of NPAs and losses incurred by the Bank. The bank continues its efforts to come out of PCA by implementing the restrictions imposed by RBI. Presently, the remuneration being paid to all employees in different segments follows uniformity

Pay and allowances for employees is presently based on structured pay scale in alignment with the structure prevailing in Public Sector Banks. There is no independent remuneration for risk and compliance employees.

(d) Description of the ways in which the bank seeks to link performance during a performance measurement period with levels of remuneration.

Presently Bank follows a structured pay scale based compensation for its employees, in alignment with the pay and allowances structure followed in Public Sector Banks, as arrived by Indian Banks’ Association on behalf of the Banks through negotiated settlements with workmen unions / officers’ associations representing the employees of the member Banks. As such there is no concept of remuneration linked with performance presently in the Bank.

(e) A discussion of the bank’s policy on deferral and vesting of variable remuneration and a discussion of the bank’s policy and criteria for adjusting deferred remuneration before vesting and after vesting.

Presently there is no variable remuneration in the compensation structure applicable to Bank’s employees.

(f) Description of the different forms of variable remuneration (i.e. cash, shares, ESOPs and other forms) that the bank utilizes and the rationale for using these different forms.

Remuneration to employees of the Bank is presently in alignment with the structured pay scales as applicable in Public Sector Banks, which is done by way of industry level negotiated settlements through Indian Banks’ Association and representative unions/associations of member banks. There are currently no other forms of variable remuneration in the Bank.

The bank has re-valued the Premises include Leasehold / Freehold Land & Residential/ Office building at the end of business hours, on 31st March 2019 based on valuations made by independent valuers. The final revaluation considered was Rs. 7,116.98 crore as on March 31, 2019. The net appreciation of Rs. 2,013.12 crore arising on revaluation, being the difference between the net book value of Rs. 5,103.86 crore and revalued amount of Rs. 7,116.98 crore was credited to Revaluation Reserve on March 31, 2019

ii. The balance in Revaluation Reserve as at March 31, 2019 is 6,727.69 crore (Rs. 5,053.88 crore for previous year).

iii. Net Loss amounting to Rs. 72.57 crore on account of sale of residential/office buildings and other assets during the year is included in Schedule 14 - Other Income.

iv. . Amount transferred from revaluation reserve to general reserve Rs. 339.31 crore (Rs. 363.87 cr) includes amount of depreciation on revalued portion Rs. 182.37 crore (Rs. 185.34 crore) and balance of revaluation reserve on sale of asset is Rs. 156.94 crore (Rs. 178.53 crore).

EMPLOYEE BENEFITS (AS-15) (REVISED)

2. A. Employee Benefit Schemes

Defined Contribution Schemes

The Bank’s employees, excluding those who have opted for pension, who have joined Bank before March 31, 2008 are covered by Provident Fund Scheme (PFS). The Bank makes a defined contribution measured as a fixed percentage of basic salary to the PFS. The Provident Fund Scheme is administered by “The Committee of Administrators of IDBI Bank Employees’ Provident Fund (Fund)’.’ In respect of employees of IDBI Home Finance Limited (IHFL) and IDBI Gilts Limited (IGL), provident fund contributions were made to Regional Provident Fund Commissioner up to May 2011 and thereafter contributions have been made to the aforementioned Fund. During the year, Rs. 13.52 crore (Rs. 4.52 crore) has been contributed to PFS and charged to Profit and Loss Account.

The Bank’s employees who have joined after April 1, 2008 are covered by Defined Contribution Pension Scheme (DCPS) to which Bank makes a defined contribution as a fixed percentage of Pay and Dearness Allowance. During the year, Rs.153.16 crore (Rs. 69.20 crore) has been contributed to DCPS and charged to Profit and Loss Account.

ii. Defined Benefit Schemes

The Bank makes contributions for the gratuity liability of the employees to the ‘IDBI Bank Employees Gratuity Fund Trust.

a. Some of the employees of the Bank are also eligible for Pension which is administered by the ‘IDBI Pension Fund Trust.’

b. The present value of these defined benefit obligations and the related current service cost are measured using the Projected Unit Credit Method by an independent actuary at each balance sheet date.

The payment of Gratuity Act 1972 was amended on March 29, 2018 to increase the limit of Gratuity from Rs. 10 lakhs to Rs. 20 lakhs. The Reserve Bank of India vide its communication DBR No. BP.BC. 9730/ 21.04.018/ 2017-18 dated April 27, 2018, has given option to Banks to spread additional liability on account of enhancement in gratuity limits in four quarter beginning with the quarter ended March 31, 2018. Accordingly, the Bank had deferred the amount of Gratuity liability of Rs. 34.71 crore as on 31.03.2018 which was subsequently provided fully in the current year and there is no further unamortised gratuity liability as on 31.03.2019.

C Other long term benefits

Employees of the Bank are entitled to accumulate their earned/ privilege leave up to a maximum of 240 days for officers and 300 days for other staff. A maximum of 15 days leave is eligible for encashment in each year.

Some employees of the Bank are eligible for Voluntary Health Scheme which is borne by the Bank as and when the liability events occur.

Actuarial valuation of these benefits have been carried out using the Projected Unit Credit Method and Rs. 90.64 Crore has been charged to Profit and Loss Account during the year.

Employees of the Bank are eligible for Disability Assistance which is borne by the Bank as and when the disability events occur.

3. RELATED PARTY DISCLOSURES (AS-18)

A. List of related party as per AS-18

I. Holding Company

Life Insurance Corporation of India (LIC)

(Acquired 51% stake in paid up capital on January 21, 2019)

ii. Subsidiaries

IDBI Capital Market & Securities Limited.

IDBI Intech Ltd.

IDBI Mutual Fund Trustee Company Ltd.

IDBI Asset Management Ltd.

IDBI Trusteeship Services Limited

III. Jointly controlled entity

IDBI Federal Life Insurance Co. Ltd.

IV. Associates

Biotech Consortium India Ltd.

National Securities Depository Ltd

North Eastern Development Finance Corporation Ltd

Pondicherry Industrial Promotion Development and Investment Corporation Ltd (PIPDICL)

V. Key management personnel of the Bank

Shri Mahesh Kumar Jain, Managing Director & CEO (upto June 21, 2018).

Shri B. Sriram, Managing Director & CeO (from June 30, 2018 to September 30, 2018).

Shri Rakesh Sharma, Managing Director & CEO (from October 10, 2018).

Shri Krishna Prasad Nair, Deputy Managing Director.

Shri G.M.Yadwadkar, Deputy Managing Director.

Shri Ajay Sharma, Executive Director & Chief Financial Officer

Shri Pawan Agrawal, Company Secretary.

In terms of Section 2(51)(v) of the Companies Act, 2013, the Board had approved the proposal to designate officers one level below the Directors as KMPs on March 21, 2018. The Bank had filed the form with MCA for reporting/ registering the said officers as KMPs on April 19, 2018. Till now the said officers have not been registered as KMPs under the MCA site and hence cannot be technically deemed to be KMPs. However, as an abundant caution, Bank is disclosing information on remuneration of the said officers in the Annual Financial Statements under Related Party Transactions in accordance with the said board approval.

Shri P Sitaram, Executive Director

Shri G A Tadas, Executive Director

Dr. S S Banerjee, Executive Director

Smt. Mythili Balasubramanian, Executive Director (upto November 30, 2018)

Shri Abhay Laxman Bongirwar, Executive Director (upto September 29, 2018)

Shri Suresh Kishinchand Khatanhar, Executive Director

Shri Inderpal Singh Kalra, Executive Director

Shri Madhav Vasant Phadke, Executive Director

Shri Subroto Gupta, Executive Director

Shri Ajoy Nath Jha, CGM & CRO

Smt. Maya Chakravorty, CGM (upto May 14, 2018)

4. LEASES (AS-19)

Operating leases primarily comprise office premises, staff residences and Automated Teller Machines (ATM)s, which are either cancellable at the option of the Bank or non-cancellable operating lease.

During the year Rs. 303.42 Crore (Rs. 331.82 Crore) has been charged to the Profit and Loss Account towards lease charges paid/ payable on cancellable/non-cancellable operating lease.

5. AS-24 Discontinuing Operations

a. During the period from 01.04.2018 to 31.03.2019, the bank has not discontinued operations of any of its operations, which resulted in shedding of liability and realisation of the assets.

b. Long term contracts

The Bank has a process whereby periodically all long term contracts including derivative contracts are assessed for material foreseeable losses. At the year end, the Bank has reviewed and ensured that adequate provision as required under any law/ accounting standards for material foreseeable losses on such long term contracts including derivative contracts has been made in the books of account.

c. Pending litigations

The Bank’s pending litigations comprise of claims against the Bank primarily by the borrowers, customers and proceedings pending with Income Tax authorities. The Bank has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements.

*Refer Schedule-12- Contingent Liabilities for quantitative disclosure.

The Government of India (GoI), Ministry of Finance, Department of Financial Services vide its letter dated 5th September 2016, advised the Bank to surrender securities of Rs. 1064.27 crore to the GoI representing net impact of the asset exchange of Stressed Assets Stabilisation Fund (SASF) done by the Bank in 2006. These securities form part of Rs. 9000 crore of such securities issued to the Bank by GoI in September 2004 against SASF. These are 20 years securities maturing in September 2024. The Bank had obtained approval from the Appropriate Authorities to surrender these securities in 11 quarters commencing from quarter II of FY 2016-17. GoI vide its letter dated July 27, 2017 has agreed to the bank’s request. Bank is providing 96.75 crore per quarter since September 2016. Total securities written off from SASF account as on March 31, 2019 stands at Rs.1064.27 cr. Thus the full written off has been completed. However, these written off securities are reflected in SGL account as on 31.03.2019 pending Government notification for redemption which resulted in difference of the same amount in SGL account.

Pursuant to the provisions of Micro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to Micro, small & medium enterprise. The Bank is in the process of compiling relevant information from its suppliers about their coverage under the said Act. In view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of this Act is not expected to be material.

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 118.39 crore (Rs. 138.68 crore).

Pending industry wide bipartite settlement on wage revision (due with effect from November 2017), a sum of Rs. 112 crore has been provided by the Bank during the year on this account on estimated basis. (Cumulative provision held as on March 31, 2019 was Rs. 174 crore)

Pursuant to appropriate operational procedures & legal opinion, the Bank has written back old unclaimed liabilities of Rs. 177.87 crores to other income pertaining to certain bonds issued prior to October 01, 2004 issued by erstwhile Industrial Development Bank of India (e-IDBI).

Other Liabilities include Rs. 7.22 crore as dividend payable pertaining to the years 1995 to 2003 in relation to the dividend declared by erstwhile Industrial Development Bank of India (e-IDBI). In compliance with the Legal Opinion obtained by the Bank, the Bank has taken all effective steps to reach out to the shareholders whose dividend remained unclaimed/ unpaid and has released payment based on valid requests received in this regard. Further, in compliance with the Legal Opinion, the Bank had also referred the matter to Ministry of Corporate Affairs (MCA) about the legality of transferring the amount to Investor Education and Protection Fund (IEPF) and has been regularly following up with the MCA and the IEPF Authority from whom, the response is awaited.

Figures of the previous year, are disclosed in brackets and are regrouped/ rearranged, so as to confirm with the presentation made for the current year.

Source : Dion Global Solutions Limited
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