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Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of UCO Bank

Mar 31, 2025

Qualitative Assessment of LCR data and Result :

Liquidity Coverage Ratio (LCR) has been introduced with the objective to ensure that Bank maintains an adequate level ofÂ unencumbered High Quality Liquid Assets (HQLAs) that can beÂ converted into cash to meet its stressed outflows for next 30Â calendar day time horizon. RBI mandates Banks to maintainÂ minimum LCR of 100% at Bank level.

Accordingly; Bank is disclosing the LCR at Bank level. The Bank is having two overseas branches at Hong Kong and SingaporeÂ for which there is no separate LCR requirement.

High Quality liquid Assets (HQLA): Our HQLA comprises of

following

â¢ Â Â Â Level 1 Assets

1. Â Â Â Cash in hand including Cash Reserve in excess of CRR

2. Â Â Â Govt. Securities in Excess of Mandatory SLR

3. Â Â Â Marginal standing Facility up to 2% of Net Demand andÂ Time Liabilities in the form of SLR securities.

4. Â Â Â Facility to Avail Liquidity for liquidity Coverage Ratio up toÂ 16% of Net Demand and Time Liabilities in the form ofÂ SLR securities.

â¢ Â Â Â Level 2 Assets (Not issued by Banks/Financial Institution)â¢ Â Â Â Level 2A assets - With Haircut of 15%

1. Â Â Â Marketable securities representing claims on or claimsÂ guaranteed by Sovereigns Public Sector Entities (PSEs)Â having risk weight 20%

2. Â Â Â Corporate Bonds and Commercial Papers having minimumÂ rating of AA-

â¢ Â Â Â Level 2B assets - With Haircut of 50%

1. Â Â Â Securities issued or guaranteed by sovereigns havingÂ risk weight higher than 20% but not higher than 50%Â (i.e. Bonds with Rating AA & A)

2. Â Â Â Corporate Debt Securities (including Commercial Paper)Â having external rating between A+ and BBB-

3. Â Â Â Common Equity Shares Included in NSE CNX Nifty indexÂ and/or S&P BSE Sensex index

Composition of HQLA:Â : The Bank during the three months ended 31st March 2025 maintained average HQLA ofÂ Rs.61461.36 crore of which Level 1 Assets contribute toÂ approximately 99.80% of the total stock of HQLA. Level 1 assetsÂ are more stable form of asset with no or lower haircut forÂ meeting any cash outflow. Facility to avail Liquidity for LiquidityÂ Coverage Ratio (FALLCR) constitutes the highest portion to HQLAÂ i.e. around 74.30% approx. of the total average HQLA as on

31.03.2025.

The percentage of weighted excess SLR to total HQLA has increased from 13.37% as on 31.12.2024 to 15.46% as onÂ 31.03.2025 as Borrowing as a percentage of unweighted totalÂ cash outflows decreased from 2.82% as on 31.12.2024 to 1.54%Â as on 31.03.2025.

Level 2 assets which are lower in quality as compared to Level 1 assets constitute 0.20% of the total stock of HQLA againstÂ maximum permissible level of 40%.

Concentration of Funding Sources:Â Our Funding sources is well diversified comprising mainly of :

â¢ Â Â Â Non-maturing deposits (Current Deposit/ Saving Deposit)

â¢ Â Â Â Term Deposit of which majority portion is from RetailÂ Customers.

Funding Profile:Â Retail Deposits along with Deposits from Small Business Customer put together contribute around 34.97% ofÂ total weighted Cash outflow (62.56% of total un-weighted CashÂ outflow) as on 31.03.2025. Deposits from Non-financialÂ Corporates, Central Banks, Multilateral development banks andÂ PSEs contribute to 35.57% of total weighted Cash outflowsÂ (15.84% of total un-weighted Cash outflows) as on 31.03.2025.

The percentage of Unweighted Liability from Other Legal entity to Total Un-weighted Cash outflows stood at 2.62% as on

31.03.2025.

Bank is monitoring the funding sources on regular interval with the objective to monitor/reduce the concentration of funds havingÂ lower stability. Bank also monitors the concentration of top 20Â depositors on regular intervals.

Bank has also placed trigger limit which is above the minimum LCR regulatory requirement of 100% so that the Bank initiateÂ corrective actions to ensure that Bank LCR remains aboveÂ Regulatory ceiling of 100%.

Qualitative Disclosure:Background:

Net Stability Funding Ratio (NSFR) guidelines ensure reduction in funding risk over longer duration time horizon by requiringÂ bank to fund their assets with sufficiently stable resources ofÂ funding in order to mitigate the risk of funding stress. The NSFRÂ is defined as the amount of available stable funding relative toÂ the amount required stable funding. RBI has issued theÂ regulations on the implementation of Net stability funding Ratio inÂ May 2018 with minimum requirement of equal to at least 100%.Â The implementation is effective from 01st October 2021.

Objective of NSFR:

The objective of NSFR is to ensure that Bank maintains a stable funding profile in relation to the assets requiring stable funding.Â A sustainable funding structure is intended to reduce theÂ probability of erosion of bank's liquidity position due to disruptionsÂ in bank's regular sources of funding that would increase theÂ risk of its failure and potentially lead to broader systemic stress.

Definition of NSFR:

The NSFR is defined as the amount of Available Stable Funding (ASF) relative to the amount of Required Stable Funding (RSF).

Computation of NSFR:

The NSFR is computed as follows:

Available Stable FundingNSFR = ...................................... >= 100%

Required Stable Funding

The above ratio should be equal to at least 100% on an ongoing basis. The NSFR is binding on Banks w.e.f. 01.10.2021 andÂ quarterly filing in RBI portal is mandatory. Accordingly, we haveÂ uploaded NSFR in RBI portal for 31.03.2025

"Available Stable Funding" (ASF)Â is defined as the portion of capital and liabilities expected to be reliable over the time horizonÂ considered by the NSFR, which extends to one year.

Example:

a) Â Â Â Total regulatory capital (excluding Tier 2 instruments withÂ residual maturity of less than one year).

b) Â Â Â Other capital instruments and liabilities with effective residualÂ maturity of one year or more.

c) Â Â Â Stable & less stable non-maturity (demand) deposits andÂ term deposits with residual maturity of less than one yearÂ provided by retail and small business customers (it isÂ considered more stable than deposits from large corporates/Â institution)

d) Â Â Â Funding with residual maturity of less than one year fromÂ sovereigns, PSEs, and multilateral and national developmentÂ banks.

"Required Stable Funding" (RSF) is a function of the liquidity

characteristics and residual maturities of the various assets

held by that institution as well as those of its Off-Balance Sheet

(OBS) exposures.

Example:

a) Â Â Â Unencumbered Level 1 assets, excluding coins, banknotes,Â CRR and SLR Securities

b) Â Â Â Unencumbered Level 2A & Level 2B assets

c) Â Â Â All other assets not included in the above categories withÂ residual maturity of less than one year, including 'standard'Â loans to non-financial corporate clients, to retail and smallÂ business customers, and 'standard' loans to sovereignsÂ and PSEs

d) Â Â Â Unencumbered 'standard' residential mortgages with aÂ residual maturity of one year or more and assigned theÂ minimum risk weight under the Standardized Approach

e) Â Â Â Other unencumbered performing loans with risk weightsÂ greater than 35% under the Standardized Approach andÂ residual maturities of one year or more, excluding loans toÂ financial institutions.

f) Â Â Â All other assets not included in the above categories,Â including non-performing loans, loans to financial institutionsÂ with a residual maturity of one year or more, non-exchange-traded equities, fixed assets, items deducted from regulatoryÂ capital, retained interest, insurance assets, subsidiaryÂ interests and defaulted securities.

UCO Bank's Position:

Bank is maintaining NSFR much above the maximum regulatory required ratio which shows Bank has sufficient stable sourceÂ of fund to manage its fund requirement.

c) Sale and transfers to/from HTM category:

The value of sales and transfers of securities to/from HTM Category, excluding the one-time transfer of securitiesÂ undertaken by the Bank with the approval of Board of Directors,Â has not exceeded 5 % of the book value of Investments held inÂ HTM Category at the beginning of the year.

e) Divergence in Asset Classification and Provisioning:Â Banks shall make suitable disclosures as tabulatedÂ below, if either or both of the following conditionsÂ are satisfied:

i) Â Â Â The additional provisioning for NPA assessed by ReserveÂ Bank of India as part of its supervisory processes,Â exceeds five per cent of the reported profit beforeÂ provisions and contingencies for the reference periodÂ and

ii) Â Â Â The additional Gross NPA identified by the Reserve BankÂ of India as part of its supervisory process exceed fiveÂ percent of the reported incremental Gross NPAs for theÂ reference period.

iii) Â Â Â Disclosure of transfer of loan exposures:

Details of loans transferred/acquired during the financial year ended on 31.03.2025 under the RBI Master DirectionÂ on Transfer of Loan Exposures dated 24.09.2021 areÂ given below:-

i) The details of Non-Performing Assets (NPAs) transferred are as under:

(Rs. in Crore except number of accounts)

e) Â Â Â Intra-group exposures - Nil

f) Â Â Â Factoring Exposures - Nil

g) Â Â Â Unhedged foreign currency exposure

In terms of RBI Guidelines, our Bank has framed a policy on 'Unhedged Foreign Exchange Exposure by borrowers includingÂ SMEs and Corporates duly approved by the Board. The policyÂ inter-alia provides for:

â¢ Â Â Â Monitoring and review of Unhedged Foreign CurrencyÂ Exposure (UFCE) of all customers including SMEs.

â¢ Â Â Â Incremental capital and provisioning requirements forÂ exposures to entities with Unhedged Foreign CurrencyÂ Exposure.

â¢ Â Â Â Stipulation of UFCE Charge in order to provide protectionÂ and discourage entities having UFCE.

Based on the available data and financial statements and the declaration from borrowers, the bank has estimated the liabilityÂ of Rs. 57.22 Lakhs as on 31.03.2025 on Unhedged ForeignÂ Currency Exposure (UFCE) to their constituents in terms of RBIÂ Circulars and our Board approved policy and provision for theÂ same has been provided in the books.

c) Disclosures on risk exposure in derivatives I) Qualitative disclosures-

i) The Structure and organization for management of risk in derivatives trading:

The organization structure consists of Investment Wing at the Corporate level which report to the ExecutiveÂ Directors, Chairman & Managing Director and ultimatelyÂ to the Board. Risk Management Department is informedÂ of the transactions as and when they take place.

ii) The scope and nature of risk measurement, risk reporting and risk monitoring systems:

a) Â Â Â The Interest Rate Swap (IRS) transactions undertaken byÂ the Bank are for hedging and trading purposes. DerivativeÂ as a product is also offered to the customer as per RBI norms.Â Such transactions are undertaken as per policies of the BankÂ formulated based on RBI guidelines.

b) Â Â Â The risk is measured in the interest rate derivativeÂ transactions depending on the movement of benchmarkÂ interest rates for the remaining life of the interest rate swapÂ contracts. All interest rate derivative transactions are includedÂ for the purpose of risk measurement. The risk is evaluatedÂ and reports are placed to the CMD/ED daily and BoardÂ periodically. Risk is monitored based on the mark to marketÂ position of the interest rate derivative transactions.

(iii) Â Â Â Policies for hedging and /or mitigating risk and strategiesÂ and processes for monitoring the continuing effectiveness ofÂ hedges/ mitigates:

IRS is undertaken on the actual interest bearing underlying assets or liabilities. The notional principal amount and maturityÂ of the hedge does not exceed the value and maturity ofÂ underlying asset/liability. The risk is monitored on the markÂ to market basis of the outstanding interest rate swap contractsÂ and accordingly the effectiveness of the hedge is determined.

Collateral required upon entering into IRS is Nil. Notional principal amount of IRS multiplied by the relevant conversionÂ factor and the respective risk weight of the counter party hasÂ been taken into account for determining the capitalÂ requirements.

(iv) Â Â Â Accounting policy for recording hedge and non-hedgeÂ transactions; recognition of income, premiums and discounts;Â valuation of outstanding contracts; provisioning, collateral andÂ credit risk mitigation:

The accounting policies for recording swaps is as per our extant derivative policy. It defines accounting entries to beÂ undertaken on trade date, interest accrual, intermittentÂ interest settlement date, revolution date and termination date.

For recognition of income, premiums and discounts, valuation of outstanding contracts, provisioning, collateral and creditÂ risk mitigation is as per our Bank's Derivative Policy.

(vi) Other Disclosures for Interest Rate Swaps:

The Bank has undertaken fixed to floating and floating to fixed interest rate swaps on underlying assets and liabilities.Â The loss of income on the above IRS will be Rs.15.16 Cr, inÂ case counter-parties fail to fulfill their obligations. There isÂ no concentration of credit risk arising from IRS transactionsÂ undertaken as the counter-parties are the ClearingÂ Corporation of India Ltd. and the exposure is within theÂ exposure limit permitted.

12. Disclosure of penalties imposed by the Reserve Bank of India

During the Financial Year from 01.04.2024 to 31.03.2025, Reserve Bank of India, in exercise of powers conferredÂ under Section 47(A)(1)(c) read with Section 51 and 46(4)(i)Â of the Banking Regulation Act, 1949, has imposed a penaltyÂ of Rs.2,69,05,770.00 (Two Core Sixty Nine Lakhs Five Thousand Seven Hundred Seventy only) for other than currency chest operations. There is no penalty from other thanÂ RBI Regulator.

During the Financial Year from 01.04.2024 to 31.03.2025, Reserve Bank of India, in exercise of powers conferredÂ under Section 47(A)(1)(c) read with Section 51 and 46(4)(i)Â of the Banking Regulation Act, 1949, has imposed a penaltyÂ of Rs. 40,29,118.63 (Forty lakh Twenty Nine Thousand OneÂ hundred Eighteen & Paise Sixty Three only) for CurrencyÂ Chest Operations only.

f) Implementation of IFRS converged Indian Accounting Standard (IND AS)

Background:

Scheduled Commercial Banks (SCBs), excluding Regional Rural Banks (RRBs), were required to implement Indian AccountingÂ Standards (Ind AS) from April 1, 2018 vide RBI Circular datedÂ February 11, 2016. However RBI has deferred implementationÂ of Ind AS till further notice due to the legislative amendments asÂ recommended by RBI are under consideration of the GovernmentÂ of India vide its notification dated 22.03.2019. RBI vide emailÂ dated 8th August'2021 decided to reduce the frequency of IndÂ AS proforma financial statement submission from quarterly toÂ half yearly. Accordingly, Banks are advised to submit proformaÂ Ind AS based financial statements for the half year endingÂ September 30 and full year proforma Ind AS based financialÂ statements for March 31.

Progress on IND AS implementation:

Bank has submitted the Proforma IND-AS Financial statements to Reserve Bank of India with reconciliation of change in EquityÂ & profit on half yearly basis and last submitted on November 30,Â 2024 for the half year ended September, 2024 compared withÂ the previous GAAP figures

h) Â Â Â Disclosure on amortisation of expenditure on account ofÂ enhancement in family pension of employees of banks

During the FY 2024-25, there was no additional liability on account of revision in family pension consequent to the 11th BipartiteÂ Settlement and Joint Note dated November 11, 2020 as BankÂ had already charged the entire additional liability on account ofÂ revision in family pension upto the year ended 31 st March 2023.Â As on 31st March 2025, unamortized provision is Nil.

i) Â Â Â MSME Restructured Accounts:

a) In accordance with the RBI Circular No. DBR.No.BP.BC.18/ 21.04.048/2018-19 dated 01.01.2019, DOR.No.BP.BC.34/Â 21.04.048/2019-20 dated 11.02.2020 and RBI/2020-21/17Â DOR.No.BP.B C/4/21.04.048/2020-21 dated 06.08.2020 onÂ Micro, Small and Medium Enterprises (MSME) sector -Restructuring of Advances, the details of MSME restructuredÂ accounts as on 31st March 2025 are as under:

b) Disputed demand as per orders passed by Income Tax/ service tax/GST Department on account off income tax,Â GST and Service tax has been shown in schedule 12 underÂ Contingent Liability. No provision has been consideredÂ necessary by the Management as matters are pending forÂ disposal before various Competent Authorities.

* This shall contain the cumulative amount since the RE started offering green deposits. For example, if a bank has commenced raising green deposits from June 1,2023, then the annual financial statement for the period ending March 31,2025, would containÂ particulars of deposits raised and allocated from June 1, 2023, till March 31, 2025. Further, the actual amount of green depositsÂ raised during the year and use of such funds shall be given under this disclosure.

**Under each category, REs may provide sub-categories based on the funds allocated to each sub-sector. For example, REs may provide sub-categories like solar energy, wind energy, etc. under "Renewable Energy"

15. The bracketed figures indicate previous year's figures. Previous year's figures have been re-grouped /re-arranged/Â re-casted wherever considered necessary.

Mar 31, 2024

Qualitative Assessment of LCR data and Result :

Liquidity Coverage Ratio (LCR) has been introduced with the objective that a bank maintains an adequate level ofÂ unencumbered High Quality Liquid Assets (HQLAs) that can beÂ converted into cash to meet its liquidity needs for next 30 calendarÂ day time horizon. RBI mandates Banks to maintain minimumÂ LCR of 100%.

Minimum requirement of LCR as stipulated by RBI is 100% for the calendar year 2019 onwards. RBI has mandated theÂ management of LCR for individual as well as group BankÂ operations. Accordingly, Bank is disclosing the LCR at solo andÂ consolidated level. The entities included while computingÂ consolidated LCR are UCO Bank Solo (Domestic & overseasÂ operation of Hong Kong and Singapore Center.

Drivers of LCR:

The Bank has been maintaining the LCR well above the minimum regulatory requirement on an ongoing basis on the main driversÂ of which are as under:

High Quality liquid Assets (HQLA): Our HQLA comprises of

following

â¢ Â Â Â Level 1 Assets

1. Â Â Â Cash in hand including Cash Reserve in excess of CRR

2. Â Â Â Govt. Securities in Excess of Mandatory SLR

3. Â Â Â Marginal standing Facility up to 2% of Net Demand andÂ Time Liabilities in the form of SLR securities.

4. Â Â Â Facility to Avail Liquidity for liquidity Coverage Ratio up toÂ 16% of Net Demand and Time Liabilities in the form ofÂ SLR securities.

â¢ Â Â Â Level 2 Assets (Not issued by Banks/Financial Institution)

â¢ Â Â Â Level 2A assets - With Haircut of 15%

1. Â Â Â Marketable securities representing claims on or claimsÂ guaranteed by Sovereigns Public Sector Entities (PSEs)Â having risk weight 20%

2. Â Â Â Corporate Bonds and Commercial Papers having minimumÂ rating of AA-

â¢ Â Â Â Level 2B assets - With Haircut of 50%

1. Â Â Â Securities issued or guaranteed by sovereigns having riskÂ weight higher than 20% but not higher than 50%Â (i.e. Bonds with Rating AA & A)

2. Â Â Â Corporate Debt Securities (including Commercial Paper)Â having external rating between A+ and BBB-

3. Â Â Â Common Equity Shares Included in NSE CNX Nifty indexÂ and/or S&P BSE Sensex index

Composition of HQLA: The Bank during the three months ended 31st March 2024 maintained average HQLA ofÂ Rs. 60000.00 crore. Level 1 Assets contribute to approximatelyÂ 98.00% of the total stock of HQLA. Facility to avail Liquidity forÂ Liquidity Coverage Ratio constitutes the highest portion to HQLAÂ i.e. around 63.00% approx. of the total HQLA.

Level 2 assets which are lower in quality as compared to Level 1 assets, constitute 1.87% of the total stock of HQLA againstÂ maximum permissible level of 40%.

Concentration of Funding Sources: Our Funding sources is well spread with diversified liabilities portfolio comprising mainlyÂ of

â¢ Â Â Â Non-maturing deposits

â¢ Â Â Â Term Deposit of which majority portion is coming from RetailÂ Customers.

Funding Profile : Unsecured Wholesale funding constitutes major portion of total weighted Cash outflows. Retail DepositsÂ and Deposits from Small Business Customer put togetherÂ contribute around 36.77% of total weighted Cash outflow as onÂ 31.03.2024. Deposits from Non-financial Corporates, CentralÂ Banks, Multilateral development banks and PSEs contribute toÂ 52.35% of total weighted Cash outflows.

The bank is monitoring the funding sources on regular interval with the objective to monitor/reduce the concentration of fundsÂ having lower stability. The bank also monitors the concentrationÂ of top 20 depositors on regular intervals.

Bank does not have group entities, and liquidity at solo level is being managed centrally. Bank's exposure is mainly in IndianÂ Rupee.

Qualitative discussion:

Background:

Net Stability Funding Ratio (NSFR) guidelines ensure reduction in funding risk over loner duration time horizon by requiring bankÂ to fund their activities with sufficiently stable resources of fundingÂ in order to mitigate the risk of future funding stress. The NSFR isÂ defined as the amount of available stable funding relative to theÂ amount required stable funding. RBI has issued the regulationsÂ on the implementation of Net stability funding Ratio in May 2018Â with minimum requirement of equal to at least 100%. TheÂ implementation is effective from 01st October 2021.

Objective of NSFR:

The objective of NSFR is to ensure that Bank maintains a stable funding profile in relation to the composition of their assets andÂ off-balance sheet activities. A sustainable funding structure isÂ intended to reduce the probability of erosion of bank's liquidityÂ position due to disruptions in bank's regular sources of fundingÂ that would increase the risk of its failure and potentially lead toÂ broader systemic stress.

Definition of NSFR:

The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding.

"Available Stable Funding" (ASF) is defined as the portion of capital and liabilities expected to be reliable over the time horizonÂ considered by the NSFR, which extends to one year.

Example:

a) Â Â Â Total regulatory capital (excluding Tier 2 instruments withÂ residual maturity of less than one year).

b) Â Â Â Other capital instruments and liabilities with effective residualÂ maturity of one year or more.

c) Â Â Â Stable & less stable non-maturity (demand) deposits and termÂ deposits with residual maturity of less than one year providedÂ by retail and small business customers (it is consideredÂ more stable than deposits from large corporates/Â institution)

d) Funding with residual maturity of less than one year fromÂ sovereigns, PSEs, and multilateral and national developmentÂ banks.

Stable funding required ("Required Stable Funding") (RSF)

of a specific institution is a function of the liquidity characteristics and residual maturities of the various assets held by that institutionÂ as well as those of its Off-Balance Sheet (OBS) exposures.

Example:

a) Â Â Â Unencumbered Level 1 assets, excluding coins, banknotes,Â CRR and SLR Securities

b) Â Â Â Unencumbered Level 2A & Level 2B assets

d) Â Â Â Unencumbered 'standard' residential mortgages with aÂ residual maturity of one year or more and assigned theÂ minimum risk weight under the Standardized Approach

All other assets not included in the above categories, including non-performing loans, loans to financial institutions with a residualÂ maturity of one year or more, non-exchange-traded equities, fixedÂ assets, items deducted from regulatory capital, retained interest,Â insurance assets, subsidiary interests and defaulted securities

Required Stable Funding

The above ratio should be equal to at least 100% on an ongoing basis. The NSFR is binding on Banks w.e.f 01.10.2021 andÂ quarterly filing in RBI portal is mandatory.

Accordingly, we have uploaded NSFR in RBI portal for 31.03.2024 UCO Bank's Position:

Bank is maintaining NSFR much above the maximum regulatory required ratio, which shows Bank has sufficient stable source ofÂ fund to manage its fund requirement.

c) Sale and transfers to/from HTM category:

The value of sales and transfers of securities to/from HTM Category, excluding the one-time transfer of securities undertakenÂ by the Bank with the approval of Board of Directors, has notÂ exceeded 5 % of the book value of Investments held in HTMÂ Category at the beginning of the year.

e) Â Â Â Divergence in Asset Classification and Provisioning:

As per RBI Master Direction No DOR.ACC.REC.No.45/ 21.04.2018/2021-22 dated 30.08.2021 (updated onÂ 15.11.2021) on financial statements-presentation andÂ disclosures, divergences are within threshold limits in theÂ bank. Hence, no disclosure is required with respect to RBI'sÂ annual supervisory process.

f) Â Â Â Disclosure of transfer of loan exposures:

Details of loans transferred/acquired during the financial year ended on 31.03.2024 under the RBI Master Direction onÂ Transfer of Loan Exposures dated 24.09.2021 are givenÂ below:-

e) Â Â Â Intra-group exposures - Nil

f) Â Â Â Factoring Exposures - Nil

g) Â Â Â Unhedged foreign currency exposure

â¢ Â Â Â Monitoring and review of Unhedged Foreign CurrencyÂ Exposure (UFCE) of all customers including SMEs.

â¢ Â Â Â Incremental capital and provisioning requirements forÂ exposures to entities with Unhedged Foreign CurrencyÂ Exposure.

â¢ Â Â Â Stipulation of UFCE Charge in order to provide protectionÂ and discourage entities having UFCE.

Based on the available data and financial statements and the declaration from borrowers, the bank has estimated the liabilityÂ of Rs. 34.22 lakhs as on 31.03.2024 on Unhedged ForeignÂ Currency Exposure (UFCE) to their constituents in terms of RBIÂ Circulars and our Board approved policy and provision for theÂ same has been provided in the books.

c) Disclosures on risk exposure in derivatives I) Qualitative disclosures-

i) The Structure and organization for management of risk in derivatives trading:

ii) The scope and nature of risk measurement, risk reporting and risk monitoring systems:

(iii) Â Â Â Policies for hedging and /or mitigating risk and strategiesÂ and processes for monitoring the continuing effectiveness ofÂ hedges/ mitigates:

For recognition of income, premiums and discounts, valuation of outstanding contracts, provisioning, collateral and creditÂ risk mitigation is as per our Bank's Derivative Policy.

(vi) Other Disclosures for Interest Rate Swaps:

The Bank has undertaken fixed to floating and floating to fixed interest rate swaps on underlying assets and liabilities.Â The loss of income on the above IRS will be Rs.12.84 Cr, inÂ case counter-parties fail to fulfill their obligations. There isÂ no concentration of credit risk arising from IRS transactionsÂ undertaken as the counter-parties are the ClearingÂ Corporation of India Ltd. and the exposure is within theÂ exposure limit permitted.

12. Â Â Â Disclosure of penalties imposed by the Reserve Bank ofÂ India

During the Financial Year from 01.04.2023 to 31.03.2024, Reserve Bank of India, in exercise of powers conferred under Section 47(A)(1)(c) read with Section 51 and 46(4)(i) ofÂ the Banking Regulation Act, 1949, has imposed a penalty ofÂ Rs. 30275/- (Rupees Thirty thousand two hundred seventyÂ five only)for other than currency chest operations. There is aÂ penalty of Rs. 1,06,791/-(One lakh six thousand seven hundred ninety one only) from other than RBI Regulator.

During the Financial Year from 01.04.2023 to 31.03.2024, Reserve Bank of India, in exercise of powers conferred under Section 47(A)(1)(c) read with Section 51 and 46(4)(i) ofÂ the Banking Regulation Act, 1949, has imposed a penalty ofÂ Rs. 65,21,431.81 (Sixty five lakh twenty one thousand fourÂ hundred thirty one and Paisa eighty one only) for CurrencyÂ Chest Operations only.

13. Â Â Â Disclosures on remuneration

The pay and allowances admissible to ED/MD is as received from DFS and in light of Government decision on the recommendations of the Seventh Central Pay Commission.

f) Implementation of IFRS converged Indian Accounting Standard (IND AS)

Background:

Progress on IND AS implementation:

Bank has submitted the Proforma IND-AS Financial statements to Reserve Bank of India with reconciliation of change in EquityÂ & profit on half yearly basis and last submitted on November 30,Â 2023 for the half year ended September, 2023 compared withÂ the previous GAAP figures.

h) Â Â Â Disclosure on amortisation of expenditure on account ofÂ enhancement in family pension of employees of banks

During the FY 2023-24, there was no additional liability on account of revision in family pension consequent to the 11th BipartiteÂ Settlement and Joint Note dated November 11, 2020 as BankÂ had already charged the entire additional liability on account ofÂ revision in family pension upto the year ended 31st March 2023.Â As on 31st March 2024, unamortized provision is nil

i) Â Â Â MSME Restructured Accounts:

a) In accordance with the RBI Circular No. DBR.No.BP.BC.18/Â 21.04.048/2018-19 dated 01.01.2019, DOR.No.BP.BC.34/Â 21.04.048/2019-20 dated 11.02.2020 and RBI/2020-21/17Â DOR.No.BP.BC/4/21.04.048/2020-21 dated 06.08.2020 onÂ Micro, Small and Medium Enterprises (MSME) sector -Restructuring of Advances, the details of MSME restructuredÂ accounts as on 31st March 2024 are as under:

j) Contingent Liabilities

a) Â Â Â Such liabilities as mentioned at Serial No. (I) of Schedule 12Â of Balance Sheet are dependent upon the judgment of court,Â arbitration award, out of court settlement, disposal of appeals,Â the amount being called up, terms of contractual obligations,Â devolvement and raising of demand by concerned parties,Â respectively and necessary provision is made where claimÂ against the Bank is tenable.

b) Â Â Â Disputed demand as per orders passed by Income Tax/Â service tax/GST Department on account off income tax, GSTÂ and Service tax has been shown in schedule 12 underÂ Contingent Liability. No provision has been consideredÂ necessary by the Management as the matters are pendingÂ for disposal before various Competent Authorities

15. The bracketed figures indicate previous year's figures. Previous year's figures have been re-grouped /re-arranged/Â re-casted wherever considered necessary.

Disclosures Requirement as per Accounting Standards:

1. Net Profit or Loss for the period, prior period items and changes in accounting policies (AS-5):

There were no material "prior period item" included in Profit and Loss account required to be disclosed as per AS - 5 issued byÂ ICAI read with RBI guidelines. There is no change in theÂ Significant Accounting Policies adopted during the year endedÂ 31st March 2024 as compared to those followed in the previousÂ financial year 2022-23.

iv) Foreign Currency Translation Reserve (FCTR)

Bank has not recognized in profit and loss account the proportionate exchange gains or losses held in foreignÂ currency translation reserve on repatriation of profits fromÂ overseas operations.

c) Associates

Regional Rural Banks (RRBs)

UCO Bank sponsored RRB namely, Paschim Banga Gramin Bank (PBGB) is head quartered at Howrah, West Bengal withÂ four regional offices and 230 branches as on 31.03.2024.

Capital position of RRB

The total capital of Paschim Banga Gramin Bank as on

31.03.2024 Â Â Â stood at Rs.682.86 Cr. comprising Rs. 341.43 Cr.Â from Govt. of India, Rs.239 Cr. from UCO Bank (as sponsorÂ Bank) & Rs. 102.43 Cr. from West Bengal State Govt.

Performance of RRBs during 2023-24

Paschim Banga Gramin Bank:

As per unaudited financial results, total deposit of Paschim Banga Gramin Bank stood at Rs.6906 Cr. as on 31.03.2024, registeringÂ growth of 5.11%. Total advance reached a level of Rs.4149 Cr.Â with an annual growth of 10.71% 31.03.2024. CD ratio stood atÂ 60.08% as on 31.03.2024 as against 57.05% on 31.03.2023.

The gross NPA stood at Rs.337.05 Cr. as on 31.03.2024 vis-avis Rs. 351.11 Cr. as on 31.03.2023. Gross NPA to Gross Advance stood at 8.12% as on 31.03.2024 as against 9.37% as ofÂ 31.03.2023. The net NPA ratio of the RRB stood at 0.77% as on

31.03.2024 Â Â Â as against 3.94% as of 31.03.2023.

All the above figures are unaudited.

6. Â Â Â APPLICABILITY OF AS- 21 and 23:

The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21-" Consolidated FinancialÂ Statements" and Accounting Standard 23-" Accounting forÂ Investments in Associates in Consolidated Financial Statements",Â issued by the ICAI.

The financial statement of the associate considered in preparation of Consolidated Financial Statement are drawn upto 31st MarchÂ 2024.

7. Â Â Â Intangible Assets (AS-26):

Fixed Assets include computer software, which has been considered as intangible assets as per AS-26 issued by the ICAI.Â The movement in software asset is given below:

8. Â Â Â Impairment of Assets (AS-28):

In view of the absence of the indication of material impairment within the meaning of clause 5 to clause 13 of AccountingÂ Standard - 28 "Impairment of Assets" no impairment of fixedÂ assets is required in respect of current financial year.

9. Â Â Â APPLICABILITY OF AS- 24, 27.

As the Bank does not have Subsidiaries or controlling interest in Associates/Joint Ventures, AS-24 - DiscontinuingÂ Operations and AS 27 - Financial Reporting of Interest inÂ Joint Ventures issued by the ICAI are not applicable to theÂ Bank.

10. Â Â Â AS - 15 -Employee Benefits (Revised):

i. Â Â Â The Bank had adopted Accounting Standard 15 (Revised)Â "Employees Benefits" issued by the Institute of CharteredÂ Accountants of India, with effect from 1st April, 2007.

ii. Â Â Â The summarized position of Post-employment benefitsÂ and long term employee benefits recognized in the Profit

12. Accounting for Taxes on Income (AS-22) :

a) The Bank does not have any current Income Tax obligation during the year. During the FY 2023-24, net amount ofÂ Rs. 895.74 Crore (Rs. 1011.07 Crore has been reversed forÂ FY 2022-23) has been reversed as Deferred Tax Assets asÂ per accounting standard AS-22.

The Government of India has pronounced Section 115BAA of Income Tax Act, 1961 through Taxation Laws (Amendment)Â Ordinance, 2019 which provides domestic companies a nonreversible option to pay corporate tax at reduced rate effectiveÂ from 1st April, 2019 subject to compliance of certain conditions.Â Bank is currently in the process of evaluating this option andÂ continues to recognize the taxes on income for the year endedÂ 31st March, 2024 as per the earlier provisions of the Income TaxÂ Act, 1961.

13. In terms of RBI Circular No. DOR.ACC.REC.No.91/Â 21.04.018/2022-23 dated 13.12.2022, the disclosureÂ relating to item under subhead "Miscellaneous Income"Â under the head "Schedule 14-Other Income" exceeds oneÂ percent of total income, are as under:

14. The bracketed figures indicate previous year's figures.Â Previous year's figures have been re-grouped /re-arranged/Â re-casted wherever considered necessary.

Mar 31, 2019

During the year the Bank issued share and allotted -

a) 164,69,83,312 (One Hundred and Sixty Four Crore Sixty Nine Lakhs Eighty Three Thousand Three Hundred Twelve) equity shares of face value of Rs.10/- each for cash at an issue price of Rs.31.16 (Rupees Thirty One and Paise Sixteen) per equity share including premium of Rs.21.16 (Rupees Twenty One and Paise Sixteen) per equity share determined in accordance with Regulation 76(1) of SEBI ICDR Regulations, 2009, on preferential basis to Government of India on 21.05.2018 resulting in capital infusion of Rs.5132 crores.

b) 146,82,57,756 (One Hundred and Forty Six Crore Eighty Two Lakh Fifty Seven Thousand Seven Hundred Fifty Six) equity shares of face value of Rs.10/- each for cash at an issue price of Rs.20.95 (Rupees Twenty and Paise Ninety Five) per equity share including premium of Rs.10.95 (Rupees Ten and Paise Ninety Five) per equity share determined in accordance with Regulation 164(1) of SEBI ICDR Regulations, 2018, on preferential basis to Government of India on 25.02.2019 resulting in capital infusion of Rs.3076 crores.

c) Government of India infused Rs.3330 crore on 21.02.2019 by way of preferential allotment of equity shares and the amount was maintained under share application money pending approval from Government of India for increase of authorized capital of the Bank. Bank has considered such amount received from Government of India as a part of Common Equity Tier 1 (CET 1) with the permission from Reserve Bank of India vide letter no. 8310/21.01.002/201819 dated April 2, 2019. We have received in-principle approval for listing of Equity share from National Stock Exchange on 13.05.2019.

d) The Bank has received application money from the employees of the Bank aggregating to Rs.266.68 crore on 30.03.2019 in response to the offer of equity shares made in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 to the employees under UCO Bank Employee Share Purchase Scheme (ESPS) 2019 and the amount was maintained under share application money pending receipt of regulatory approvals for allotment of shares. Bank has not considered above amount received under UCO Bank Employee Share Purchase Scheme (ESPS) 2019 from employees as a part of Common Equity Tier 1 (CET 1). We have received in-principle approval for listing of Equity share from National Stock Exchange on 13.05.2019.

1.0 Investments

1.1 The Details of investments and the movement of provisions held towards depreciation on the investments/Non Performing Investments of the Bank is given below:

1.2 Sale and transfers to/from HTM Category :

The value of sales and transfers of securities to/from HTM Category, excluding the one time transfer of securities undertaken by the Bank with the approval of Board of Directors, has not exceeded 5% of the book value of Investments held in HTM Category at the beginning of the year.

2.1 Disclosures on risk exposure in derivatives a) Qualitative Disclosures

i) The Structure and organization for management of risk in derivatives trading:

The organization structure consists of Investment Wing at the Corporate level which report to the Executive Directors, Managing Director & CEO and ultimately to the Board. Risk Management Department is informed of the transactions as and when they take place.

ii) The scope and nature of risk measurement, risk reporting and risk monitoring systems:

a) The Interest Rate Swap (IRS) transactions undertaken by the Bank are for hedging and trading purposes. Derivative as a product is also offered to the customer as per RBI norms. Such transactions are undertaken as per policies of the Bank formulated based on RBI guidelines.

b) The risk is measured in the interest rate derivative transactions depending on the movement of benchmark interest rates for the remaining life of the interest rate swap contracts. All interest rate derivative transactions are included for the purpose of risk measurement. The risk is evaluated and reports are placed to the MD & CEO/ED daily and Board periodically. Risk is monitored based on the mark to market position of the interest rate derivative transactions.

(iii) Policies for hedging and /or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/ mitigates:

IRS is undertaken on the actual interest bearing underlying assets or liabilities. The notional principal amount and maturity of the hedge does not exceed the value and maturity of underlying asset/ liability. The risk is monitored on the mark to market basis of the outstanding interest rate swap contracts and accordingly the effectiveness of the hedge is determined.

Collateral required upon entering into IRS is Nil. Notional principal amount of IRS multiplied by the relevant conversion factor and the respective risk weight of the counter party has been taken into account for determining the capital requirements.

c) Other Disclosures for Interest Rate Swaps

The Bank has undertaken fixed to floating and floating to fixed interest rate swaps on underlying assets and liabilities. The loss of income on the above IRS will be Rs.20.66 Crores (Rs.3.05 crores), in case counter-parties fail to fulfill their obligations. There is no concentration of credit risk arising from IRS transactions undertaken as the counter-parties are banks and the exposure is within the exposure limit permitted.

In terms of RBI circular no. RBI/2018-19/157 DBR.BP.BC.No.32/ 21.04.018/2018-19 dated April 1, 2019, the Banks are required to disclose divergence in asset classification and provisioning consequent to RBIâs annual supervisory process in their notes to the financial statements, the details of divergence in provisioning are as under:

3.1 Disclosure of penalties imposed by RBI.

a) During the financial year 2018-19 RBI has imposed penalties on the Bank of Rs.2.00 crore under the provision of Section 47A (1) (C) read with section 46(4) (i) of the Banking Regulation Act, 1949 for wrongfully collecting and crediting instruments in excess of Rs.50,000/- in third party account and not exercising due diligence in detection and reporting the fraud in time.

b) During the financial year 2018-19 RBI has imposed penalties on the Bank of Rs.3.00 crore under the provision of Section 47A (1) (C) read with section 46(4) (i) of the Banking Regulation Act, 1949 for violations of regulatory directions of implementation of swift related operational control.

4.0. Disclosures Requirement as per Accounting Standards:

4.1. Net Profit or Loss for the period, prior period items and changes in accounting policies (AS-5):

There is no material âprior period itemâ included in Profit and Loss account required to be disclosed as per AS - 5 issued by ICAI read with RBI guidelines.

4.2 Revenue Recognition (AS-9):

Revenue is recognized as per Accounting Standard (AS-9) and Accounting policy No. 10 of Schedule -17.

4.3 AS - 15 -Employee Benefits (Revised)

Provision for Employee Benefits viz. Pension, Gratuity, Leave Encashment, Sick Leave, LFC/LTC, medical benefits to retired and in service Directors and their family members etc. has been made as per Revised Accounting Standard (AS) -15.

A sum of Rs.832.84 Crore (Rs.423.40 Crore for FY 2017-18) (including Annual Medical Aid of Rs.0.40 crores, previous year 0.40 crores) has been charged to the Profit and Loss Account towards current yearâs liabilities.

Note-1: Amount recognized in the Profit and Loss Account during the FY 2018-19 as per Actuarial Report. Provisions for employee benefits including pension has been made on actuarial valuation basis as per LIC table no.9496.

Note2: Amount debited in the Profit and Loss Account during the FY 2018-19 as Bankâs ordinary contribution to Pension on Salary Date i.e. same amount as Employees/ Members Contribution.

Note-3: The Net Funded Status (Difference between Present Value Obligation and Fair Value of Plan Asset) taking into account Rs.20 lacs as ceiling for Gratuity. As per RBI letter no. DBR.BP9730/21.04.2018/2017-18 dated 27th April 2018, Rs.221.53 crores has been spread into four quarters starting from quarter ended 31.3.2018, and an amount of Rs.55.39 Crores only have been amortized / recognized in the Profit & Loss Account in FY 2017-18. The unamortized portion of Rs.166.14 crores has been taken into account in June 2018, September 2018 and December 2018 quarters in equal proportion of the current financial year 2018-19.

c) Associates

Regional Rural Banks (RRB) sponsored by the Bank are as under:

i) Paschim Banga Gramin Bank

ii) Bihar Gramin Bank (BGB) sponsored by UCO Bank and Madhya Bihar Gramin Bank (MBGB) sponsored by Punjab National Bank are amalgamated to form a new entity, Dakshin Bihar Gramin Bank w.e.f. January 1,2019 consequent upon Gazette Notification issued by Government of India dated 21.12.2018 and the new entity is now sponsored by Punjab National Bank. As part of the amalgamation process Bank has received the share Capital of Rs.76.35 crore invested in the erstwhile Bihar Gramin Bank (BGB) from Punjab National Bank (PNB) on 30.03.2019. The investment under Zero Coupon Bonds (Tier II Bond) for Rs.6.57 crore in erstwhile Bihar Gramin Bank (BGB) is yet to be received from Punjab National Bank (PNB).

d) The transactions with RRB have not been disclosed in view of Para -9 of the AS-18, âRelated Party Disclosureâ which exempts State Controlled Enterprises from making any disclosures pertaining to their transactions with other related parties, which are also State Controlled Enterprises

4.5 . EARNINGS PER SHARE (EPS)- (AS-20):

4.6 Applicability of AS-21, 23, 24, 25, 27

As the Bank does not have Subsidiaries or controlling interest in Associates/Joint Ventures, AS 21- Consolidated Financial Statements, AS 23 - Accounting for Investments in Associates in Consolidated Financial Statements, AS-24 - Discontinuing Operations, AS-25 - Interim Financial Reporting and AS 27 -Financial Reporting of Interest in Joint Ventures issued by the ICAI are not applicable to the Bank.

4.7 Accounting for Taxes on Income (AS-22) :

a) During the year net amount of Rs.2759.12 Crore (Rs.2463.64 Crore for FY 2017-18) has been recognized as Deferred Tax Assets as per accounting standard AS-22.

4.8 Intangible assets (AS-26):

Fixed Assets include computer software, which has been considered as intangible assets as per AS-26 issued by the ICAI. The movement in software asset is given below:

4.9 Impairment of Assets (AS-28):

In view of the absence of the indication of material impairment within the meaning of clause 5 to clause 13 of Accounting Standard-28 âImpairment of Assetsâ, no impairment of fixed assets is required in respect of current financial year.

5.1 Contingent Liabilities

a) Such liabilities as mentioned at Serial No. (I) of Schedule 12 of Balance Sheet are dependent upon the judgment of court, arbitration award, out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties, respectively and necessary provision is made where claim against the Bank is tenable.

b) Disputed demand as per orders passed by Income Tax Department and demand displayed at TRACES (Income Tax Website) on account of Income Tax, TDS, Penalty, Interest amounting to Rs.16.40 Crore C36.90 Crore) has been shown in Schedule 12 under Contingent Liability. No provision has been considered necessary by the Management as the matters are pending for disposal before various competent Authorities. It is pertinent to mention that Interest Tax issue pending before Honâble High Court of Kolkata amounting to Rs.3.38 Crore has been decided in favour of the Bank. On receipt of order effect form Income Tax department, Bank shall be entitled to receive the entire amount along with interest. Bank has not received any intimation/notice regarding filing of appeal by Income Tax Department in any higher Forum/Supreme Court on this issue.

5.2 Disclosure of Letter of Comforts

The Bank issues Letter of Comforts on behalf of its various constituents against the credit limits sanctioned to them. In the opinion of Management, no significant financial impact and cumulative financial obligations have been assessed under LOCs issued by the Bank in the past, during the current year and still outstanding. Brief details of LOCs issued by the Bank are as follows:

5.3 Income from Bancassurance

Bank is a Corporate Agent of Life Insurance Corporation of India for Bancassurance Life and Reliance General Insurance Company Ltd for Bancassurance Non-Life business. Details of income from Bancassurance is given below:

5.4 Off-balance Sheet SPVs sponsored

Bank has not sponsored any SPVs.

5.5 Reconciliation:

Most of the inter branch transactions are reconciled automatically with implementation of Centralized Banking Solution (CBS). Very few entries under inter branch account & inter bank account requires reconciliation which is done on ongoing basis.

Reconciliation of entries outstanding has been drawn up to 31.03.2019 in case of Inter-Branch Accounts and in Inter-Bank Accounts. Elimination of entries outstanding in Inter-Bank Accounts including Reserve Bank of India, State Bank of India, NOSTRO Accounts etc. and in InterBranch Accounts viz., branch adjustment, balances pertaining to advances paid for acquisition of assets, sundry creditors etc. is in progress. In the opinion of the management, consequential effect of the above on the revenue/assets/liabilities will not be material.

5.6 Transfer to Depositor Education and Awareness Fund (DEAF)

5.7 Unhedged Foreign Currency Exposure:

In terms of RBI Guidelines, our Bank has framed a policy on âUnhedged Foreign Exchange Exposure by borrowers including SMEs and Corporates duly approved by the Board. The policy inter-alia provides for:

- Monitoring and review of Unhedged Foreign Currency Exposure (UFCE) of all customers including SMEs.

- Incremental capital and provisioning requirements for exposures to entities with Unhedged Foreign Currency Exposure.

- Stipulation of UFCE Charge in order to provide protection and discourage entities having UFCE.

Based on the available data and financial statements and the declaration from borrowers, the bank has estimated the liability of Rs.24.02 lacs as on 31.03.2019 on Unhedged Foreign Currency Exposure (UFCE) to their constituents in terms of RBI Circulars and our Board approved policy and however, provision for the same of Rs.39.10 lakhs has been provided in the books.

5.8 Liquidity Coverage Ratio (LCR):

Qualitative Assessment of LCR data and Result:

The Liquidity Coverage Ratio (LCR) promotes short term resilience of banks to potential liquidity disruptions by ensuring that they have sufficient High Quality Liquid Assets (HQLA) that can be converted into cash to meet their liquidity needs under a significantly severe stress scenario lasting for 30 days. The LCR is calculated as the ratio of High Quality Liquid Assets (HQLA) to Net Cash Outflows under stressed conditions over the next 30 calendar days.

Drivers of a Comfortable LCR:

The Bank has been maintaining the LCR well above the regulatory requirement on an ongoing basis on solo as well as consolidated basis the main drivers of which are as under:

High Quality liquid Assets (HQLA): Our HQLA comprises of following

- Level 1 Assets

1. Cash in hand including Cash Reserve in excess of CRR

2. Govt. Securities in Excess of Mandatory SLR

3. Marginal standing Facility up to 2% of Net Demand and Time Liabilities in the form of SLR securities.

4. Facility to Avail Liquidity for liquidity Coverage Ratio up to 13% of Net Demand and Time Liabilities in the form of SLR securities.

- Level 2 Assets (Not issued by Banks/Financial Institution)

- Under Level 2A assets

1. Marketable securities representing claims on or claims guaranteed by Sovereigns Public Sector Entities (PSEs) having risk weight 20% under the Basel II

2. Corporate Bonds and Commercial Papers having minimum rating of AA-

- Under Level 2B assets

1. Securities issued or guaranteed by sovereigns having risk weight higher than 20% but not higher than 50% (i.e. Bonds with Rating AA & A)

2. Corporate Debt Securities (including Commercial Paper) having external rating between A and BBB-

3. Common Equity Shares Included in NSE CNX Nifty index and/or S&P BSE Sensex index

Concentration of Funding Sources: Our Funding sources is well spread with diversified liabilities portfolio comprising mainly of

- Current Deposit and Saving Deposit and

- Term Deposit ( normal and Bulk)

The bank is monitoring the funding sources on regular interval with the objective to monitor / reduce the concentration of funds having lower stability. The bank has reduced the bulk deposits and focused on accretion of current and Savings deposits. The bank also monitors the concentration of top 20 depositors on regular intervals.

We do not have any group entities and liquidity at solo level is being managed centrally.

5.9 Fixed Assets

(i) Bank has adopted Revaluation Model for Land and Building and Cost Model for other Fixed Assets.

(ii) Bank has revalued its premises last on 31.03.2019 by independent qualified valuers. The excess of fair market value over the book value is credited to revaluation reserve. As on date aggregate amount of revaluation reserve (net of revaluation relating to assets disposed of) is Rs.2555.36 crore (Rs.2537.71 crore) and depreciation on the revalued portion charged is Rs.205.60 crore (Rs.185.94 crore). As per revised AS 10, Revaluation Reserve equal to the additional depreciation on account of Revaluation of the Building amounting to Rs.21.20 Crore (22.74 Crore) has been transferred to Revenue Reserve.

(iii) The valuer has valued the properties on the following methods :

Land: On market rates by enquiry from the locality based on the latest transactions and wherever this information is not available, Govt. approved rate is taken as reference rate.

Building: On PWD plinth rate as per latest schedule on the basis of type of construction and applying depreciation factor depending on age of the Building.

Other Disclosures regarding Fixed Assets for FY ending 31.03.2019:

a) Premises include Leasehold property of Rs.451.38 Crores and amortised during the year Rs.4.27 Crores.

b) In respect of Eight (8) lease hold properties, renewal/ registration of lease is due for more than two years, out of which registration of lease of one property is pending since year 1995. The Bank has taken necessary measures in these cases and shall be completed in due course.

c) In Five (5) properties purchased by the bank, execution of deed of conveyance is pending. The Bank has taken necessary measures for the same.

d) Out of twenty six (26) unauthorised tenants at its own building at 2, India Exchange Place, Kolkata-700001, suit has been filed by the Bank on 20.05.2015, against twenty four (24) tenants and case is pending before City Civil Court.

e) Existence and amount of restriction on title, property, Plant & Equipment pledged as security for liabilities - NIL.

f) Contractual commitments for the acquisition of the property, plant & equipment as on 31.03.2019 - Rs.37.27 Crore (PY 41.61 Crore).

g) Expenditure recognized in the carrying amount of an item of plant equipment and property in the course of construction is Rs.3.09 crore (8.23 crore).

h) Amount of assets retired from active use and held for disposal - NIL

5.10 Break up of provision held against non-performing advances into facility-wise, security-wise and sector-wise is not ascertained. The same is deducted on estimated basis from Gross advances in the various categories to arrive at the balance of net advances as stated in Scheduled 9 of the Balance Sheet.

5.11 Assets and liabilities have been suitably adjusted for events occurring after the balance sheet date that provide additional evidence to assist the estimation of amounts relating to conditions existing at the balance sheet date.

6) MSME Restructured Accounts

In accordance with RBI vide circular No. RBI/2018-19/100/DBR No. BP. BC. 18/21.04.048/2018-19 dated 01.01.2019 on âRelief for MSME borrowers registered under Goods and Services Tax (GST)â the details of MSME restructured accounts as on 31.03.2019 as under:

7) Disclosure on IND AS Background:

Scheduled Commercial Banks (SCBs), excluding Regional Rural Banks (RRBs), were required to implement Indian Accounting Standards (Ind AS) from April 1, 2018 vide RBI Circular dated February 11, 2016. However RBI has deferred implementation of Ind AS till further notice due to the legislative amendments as recommended by RBI are under consideration of the Government of India vide its notification dated 22.03.2019.

Strategy of IND AS Implementation:

Bank has constituted IND AS steering committee headed by Executive Director to plan the IND AS technical requirements, System & Process Changes, Business Impact, evaluation of Resources and project management.

Bank has also constituted IND AS working group within the bank who will be working on IND AS implantation project which comprises of officers from cross functional department.

Bank has also appointed M/s Deloitte Haskins & Sells LLP as IND AS consultant to assist the bank in implementation of Indian Accounting Standard (IND AS) as per RBI/MCA guidelines.

Progress on IND AS implementation:

Bank has submitted the Proforma IND-AS Financial statements to Reserve Bank of India with reconciliation of change in Equity & profit on quarterly basis and last submitted on February 28, 2019 for the nine months ended December 31, 2018 compared with the previous GAAP figures.

8) Disclosure on Implementation of resolution plan on stressed accounts under Revised Framework:

Revised policy for resolution of stressed assets as per RBI direction no. RBI/2017-18/131 DBR.No.BP.BC.101/21.04. 048/ 2017-18 February 12, 2018 has been approved by Bankâs Board and put in to operation effective from 12.02.2018. Subsequently Supreme Court has struck down the RBI circular dated 12.02.2018 as âUltra-Viresâ and opined that it has no effect in law.

To augment the process of resolution of stressed assets under SMA1 and SMA2 category for exposure above Rs.20.00 crores a separate vertical for stressed asset management has also been created as approved by Bankâs Board to focus recovery effort through a dedicated, specialized and motivated team for enhanced and timely recovery.

9) Prompt Corrective Action (PCA)

In terms of the RBI Circular No. RBI/2016-17/276 DBS.CO.PPD.BC.No. 8/11.01.005/2016-17 dated April 13, 2017, RBI through its letter dated May 05, 2017 put UCO Bank under Prompt Corrective Action (PCA) framework on account of high Net NPA and negative RoA.

Bank is complying the PCA framework norms meticulously. Bank has prepared an action plan and also taken various steps to reduce NPA and improve its profitability. Bank is also reporting its progress made on PCA framework to RBI periodically.

10) The bracketed figures indicate previous yearâs figures. Previous yearâs figures have been re-grouped /re-arranged/re-casted wherever considered necessary.

Mar 31, 2018

1. During the year the Bank issued share and allotted -

a) 30,71,58,119 (Thirty crore seventy one lakh fifty eight thousand one hundred nineteen) equity shares of face value of Rs.10/- each for cash at an issue price of Rs.37.44 (Rupees thirty seven and paise forty four) per equity share including premium of Rs.27.44 (Rupees twenty seven and paise forty four) per equity share determined in accordance with Regulation 76(1) of SEBI ICDR Regulations, 2009, on preferential basis to Government of India on 09.08.2017 resulting in capital infusion of Rs.1150 crores.

b) 44,12,70,860 (Forty four crore twelve lakh seventy thousand eight hundred sixty) equity shares of face value of Rs.10/each for cash at an issue price of Rs.31.16 (Rupees thirty one and paise sixteen) per equity share including premium of Rs.21.16 (Rupees twenty one and paise sixteen) per equity share determined in accordance with Regulation 76(1) of SEBI ICDR Regulations, 2009, on preferential basis to Government of India on 31.03.2018 resulting in capital infusion of Rs.1375 crores.

c) Government of India infused Rs.5132 crore on 27.03.2018 by way of preferential allotment of equity shares and the amount was maintained under share application money, since paid up capital increases beyond stipulated authorized capital of the Bank subsequent to allotment, Bank is awaiting permission from GOI for increase of authorized capital. In terms of Reserve Bank of India letter no. 6542/21.01.002/ 2017-18 dated April 23, 2018 Bank has considered such amount received from Government of India as a part of Common Equity Tier 1 (CET 1).

2.0 Investments

2.1 The Details of investments and the movement of provisions held towards depreciation on the investments/Non Performing Investments of the Bank is given below:

2.2 Sale and transfers to/from HTM Category :

The value of sales and transfers of securities to/from HTM category, excluding the one time transfer of securities undertaken by the Bank with the approval of Board of Directors, has not exceeded 5% of the book value of investments held in HTM category at the beginning of the year.

3.1 Disclosures on risk exposure in derivatives a) Qualitative Disclosures

i) The Structure and organization for management of risk in derivatives trading:

ii) The scope and nature of risk measurement, risk reporting and risk monitoring systems:

(iii) Policies for hedging and /or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/ mitigants:

IRS is undertaken on the actual interest bearing underlying assets or liabilities. The notional principal amount and maturity of the hedge does not exceed the value and maturity of underlying asset/liability. The risk is monitored on the mark to market basis of the outstanding interest rate swap contracts and accordingly the effectiveness of the hedge is determined.

*The loss of income on above IRS if counterparties fail to fulfil their obligations will be Rs.3.05 crores for FY 2017-18 (Rs.0.90 crore for FY 2016-17)

c) Other Disclosures for Interest Rate Swaps

The Bank has undertaken fixed to floating and floating to fixed interest rate swaps on underlying assets and liabilities. The loss of income on the above IRS will be Rs.3.05 Crores, in case counter-parties fail to fulfill their obligations. There is no concentration of credit risk arising from IRS transactions undertaken as the counter-parties are banks and the exposure is within the exposure limit permitted.

4.1 Disclosure of penalties imposed by RBI.

No penalty was imposed by RBI during the financial year 2017-18.

5.0. Disclosures Requirement as per Accounting Standards:

5.1. Net Profit or Loss for the period, prior period items and changes in accounting policies (AS-5):

There is no material âprior period itemâ included in Profit and Loss account required to be disclosed as per AS - 5 issued by ICAI read with RBI guidelines.

5.2 Revenue Recognition (AS-9):

Revenue is recognized as per Accounting Standard (AS-9) and Accounting policy No. 10 of Schedule -17.

5.3 AS - 15 -Employee Benefits

A sum of Rs.423.40 Crore (Rs.894.98 Crore for FY 2016-17) (including Annual Medical Aid of Rs.0.40 crores, previous year 0.40 crores) has been charged to the Profit and Loss Account towards current yearâs liabilities.

Note-1: Amount recognized in the Profit and Loss Account during the FY 2017-18 as required by Actuarial Report.

Note2: Amount debited in the Profit and Loss Account during the FY 2017-18 as Bankâs ordinary contribution to Pension on Salary Date i.e. same amount as Employees/ Members Contribution.

Note-3: The Net Funded Status (Difference between Present Value Obligation and Fair Value of Plan Asset) taking into account Rs.20 lacs as ceiling for Gratuity. As per RBI letter no. DBR.BP.9730/21.04.2018/2017-18 dated 27th April 2018, Rs.221.53 crores has been spread into four quarters starting from quarter ended 31.3.2018, and an amount of Rs.55.39 Crores only have been amortized / recognized in the Profit & Loss Account. The unamortized portion of Rs.166.14 crores shall be taken into account in June 2018, September 2018 and December 2018 quarters in equal proportion.

Investment Details:

a) Investment with LIC of India for Gratuity Fund - 100%

b) Major Categories of Plan assets as percentage of Fair Value in respect of Pension Fund

5.4 Related Party Disclosures (AS-18): a) Key Management Personnel

i) Managing Director (MD) & CEO Shri R. K. Takkar

ii) Executive Directors (ED)

Shri Charan Singh Shri G. Subramania Iyer

c) Associates

Regional Rural Banks (RRB) sponsored by the Bank are as under:

i) Bihar Gramin Bank

ii) Paschim Banga Gramin Bank

5.5 Applicability of AS-21, 23, 24, 25, 27

5.6 Accounting for Taxes on Income (AS-22):

a) During the year net amount of Rs.2463.64 Crore (Rs.850.40 Crore for FY 2016-17) has been recognized as Deferred Tax Assets as per accounting standard AS-22.

5.7 Intangible assets (AS-26):

Fixed Assets include computer software, which has been considered as intangible assets as per AS-26 issued by the ICAI. The movement in software asset is given below:

5.8 Impairment of Assets (AS-28):

6.1 Contingent Liabilities

a) Such liabilities as mentioned at Serial No. (I) of Schedule 12 of Balance Sheet are dependent upon the judgement of court, arbitration award, out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties, respectively and necessary provision is made where claim against the Bank is tenable.

b) Disputed demand as per orders passed by Income Tax Department and demand displayed at TRACES (Income Tax Website) on account of Income Tax, TDS, Penalty, Interest and Interest Tax amounting to Rs.36.90 Crore (Rs.10.66 Crore) has been shown in Schedule 12 under Contingent Liability. No provision has been considered necessary by the Management as the matters are pending for disposal before various competent Authorities. It is pertinent to mention that Interest Tax issue pending before Honâble High Court of Kolkata amounting to Rs.3.38 Crore has been decided in favour of the Bank. On receipt of order effect form Income Tax department, Bank shall be entitled to receive the entire amount along with interest. Bank has received no intimation/notice regarding filing of appeal by Income Tax Department in any higher Forum/Supreme Court on this issue.

6.2 Floating Provisions Nil

6.3 Draw Down From Reserves

Rs.8.65 crores has been debited to statutory reserves with compliance to RBI Circular no. RBI/2016-17/222/ DBR.BP.BC.No.50/21/2016-17 dated 02nd Feb 2017 for payment of interest on AT-1 Bonds.

6.4 Disclosure of Letter of Comforts

6.5 Income from Bancassurance

Bank is a Corporate Agent of Life Insurance Corporation of India for Bancassurance Life and Reliance General Insurance Company Ltd Liberty India Videocon General Insurance Co Ltd. & Future General. India Insurance Co for Bancassurance Non-Life business. Details of income from Bancassurance is given below:

6.6 Off-balance Sheet SPVs sponsored

Bank has not sponsored any SPVs.

6.7 Reconciliation:

Reconciliation of entries outstanding has been drawn upto 31.03.2018 in case of Inter-Branch Accounts and in Inter-Bank Accounts. Elimination of entries outstanding in Inter-Bank Accounts including Reserve Bank of India, State Bank of India, NOSTRO Accounts etc. and in Inter-Branch Accounts viz. branch adjustment balances pertaining to advances paid for acquisition of assets, sundry creditors etc. is in progress. In the opinion of the management, consequential effect of the above on the revenue/assets/liabilities will not be material.

6.8 Transfer to Depositor Education and Awareness Fund (DEAF)

6.9 Unhedged Foreign Currency Exposure:

- Monitoring and review of Unhedged Foreign Currency Exposure (UFCE) of all customers including SMEs.

- Incremental capital and provisioning requirements for exposures to entities with Unhedged Foreign Currency Exposure.

- Stipulation of UFCE Charge in order to provide protection and discourage entities having UFCE.

Based on the available data and financial statements and the declaration from borrowers, the bank has estimated the liability of Rs.41.38 lacs as on 31.03.2018 on Unhedged Foreign Currency Exposure (UFCE) to their constituents in terms of RBI Circulars and our Board approved policy and provision for the same has been provided in the books.

6.10 Liquidity Coverage Ratio (LCR): Qualitative Assessment of LCR data and Result:

Drivers of a Comfortable LCR:

The Bank has been maintaining the LCR well above the regulatory requirement on an ongoing basis on solo as well as consolidated basis the main drivers of which are as under:

High Quality liquid Assets (HQLA): Our HQLA comprises of following

- Level 1 Assets

1. Cash in hand including Cash Reserve in excess of CRR

2. Govt. Securities in Excess of Mandatory SLR

3. Marginal standing Facility up to 2% of Net Demand and Time Liabilities in the form of SLR securities.

4. Facility to Avail Liquidity for liquidity Coverage Ratio up to 9% of Net Demand and Time Liabilities in the form of SLR securities.

- Level 2 Assets (Not issued by Banks/Financial Institution)

- Under Level 2A assets

1. Marketable securities representing claims on or claims guaranteed by Sovereigns Public Sector Entities (PSEs) having risk weight 20% under the Basel II

2. Corporate Bonds and Commercial Papers having minimum rating of AA-

- Under Level 2B assets

1. Securities issued or guaranteed by sovereigns having risk weight higher than 20% but not higher than 50% (i.e. Bonds with Rating AA & A)

2. Corporate Debt Securities (including Commercial Paper) having external rating between A and BBB-

3. Common Equity Shares Included in NSE CNX Nifty index and/or S&P BSE Sensex index

Concentration of Funding Sources: Our Funding sources is well spread with diversified liabilities portfolio comprising mainly of

- Current Deposit and Saving Deposit and

- Term Deposit ( normal and Bulk)

We do not have any group entities and liquidity at solo level is being managed centrally.

6.11 Fixed Assets

(i) Bank has adopted Revaluation Model for Land and Building and Cost Model for other Fixed Assets.

(ii) Bank has revalued its premises last on 31.03.2016 by independent qualified valuers. The excess of fair market value over the book value is credited to revaluation reserve. As on date aggregate amount of revaluation reserve (net of revaluation relating to assets disposed of) is Rs.2537.71 crore (Rs.2507.31 crore) and depreciation on the revalued portion charged is Rs.185.94 crore (Rs.199.16 crore). As per revised AS 10, Revaluation Reserve equal to the additional depreciation on account of Revaluation of the Building amounting to Rs.22.74 Crore (22.93) has been transferred to Revenue Reserve.

The premises at Kowloon branch at Hong Kong have been revalued at Rs.46.99 crores on 31.03.2016 with depreciation till date amounting Rs.5.53 crores adjusted through Property Revaluation Reserve. The depreciation amounting Rs.1.07 crores pertaining to Financial Year 2016-17 and Rs.0.09 crores pertaining to Current Financial Year 2017-18, has been charged through Profit & Loss Account.

(iii) The valuer has valued the properties on the following methods : Land: On market rates by enquiry from the locality based on the latest transactions and wherever this information is not available, Govt. approved rate is taken as reference rate.

Building: On PWD plinth rate as per latest schedule on the basis of type of construction and applying depreciation factor depending on age of the Building.

Other Disclosures regarding Fixed Assets for FY ending 31.03.2018 :

a) Premises include Leasehold property of Rs.429.68 Crores and amortised during the year Rs.1.60 Crores.

c) In Five (5) properties purchased by the bank, execution of deed of conveyance is pending. The Bank has taken necessary measures for the same.

d) Out of twenty six (26) unauthorised tenants at its own building at 2, India Exchange Place, Kolkata-70000,suit has been filed by the Bank on 20.05.2015, against twenty four (24) tenants and case is pending before City Civil Court.

e) Existence and amount of restriction on title, property, Plant & Equipment pledged as security for liabilities - NIL.

f) Contractual commitments for the acquisition ofthe property, plant & equipment as on 31.03.2018 - Rs.41.61 Crore (PY 33.18 Crore).

g) Expenditure recognized in the carrying amount of an item of plant equipment and property in the course of construction is Rs.8.23crore (6.08 crore).

h) Amount of assets retired from active use and held for disposal - NIL

6.12 Break up of povision held against non-performing advances into facility-wise, security-wise and sector-wise is not ascertained. The same is deducted on estimated basis from Gross advances in the various categories to arrive at the balance of net advances as stated in Scheduled 9 of the Balance Sheet.

6.13 Assets and liabilities have been suitably adjusted for events occurring after the balance sheet date that provide additional evidence to assist the estimation of amounts relating to conditions existing at the balance sheet date.

6.14 As per RBI Circular No: DBR. No.BP.BC.102/21.04.048/ 2017-18, dated April 2, 2018, it has been decided to grant banks the options to spread provisioning for mark to market (MTM) losses on investments held in AFS and HFT for the quarters ended December 31, 2017 and March 31, 2018. The provisioning for each of these quarters may be spread equally over up to the four quarters commencing with the quarter in which loss is incurred.

7) Disclosure on IND AS Background:

Scheduled Commercial Banks (SCBs), excluding Regional Rural Banks (RRBs), were required to implement Indian Accounting Standards (Ind AS) from April 1, 2018 vide RBI Circular dated February 11, 2016. However RBI has deferred implementa-tion of Ind AS by one year vide its Press release dated 05-04-2018.

Strategy of IND AS Implementation:

Bank has also constituted IND AS working group within the bank who will be working on IND AS implantation project which comprises of officers from cross functional department.

Bank has also appointed M/s Deloitte Haskins & Sells LLP as IND AS consultant to assist the bank in implementation of Indian Accounting Standard (IND AS) as per RBI/MCA guidelines.

Progress on IND AS implementation:

Bank has submitted the Proforma IND AS Financial statements to Reserve Bank of India with reconciliation of change in Equity & profit as on 30th June 17 compared with the previous GAAP figures.

8) Disclosure on provision in respect of exposures where Corporate Insolvency Resolution Proceedings(CIRP) initiated

As per RBI Letter No. DBR.No.BP.8756/21.04.048/2017-18 dated April 2,2018 advising inter alia, on the provisions to be maintained in respect of exposures to specific accounts where the banks were advised to initiate Corporate Insolvency Resolution Proceedings(CIRP) against the borrower entities, provisions in respect of such accounts shall be made as under:

(i) By March 31, 2018 Higher of the following:

(A) 40 percent of the secured portion of the outstanding plus 100 percent for the unsecured portion;

(B) Provisions required to be maintained as per the extent asset classification norms.

9) Disclosure on Implementation of resolution plan on stressed accounts under Revised Framework:

To augment the process of resolution of stressed assets under SMA1 and SMA2 category for exposure above Rs.20.00 crores a separate vertical for stressed asset management has also been created as approved by Bankâs Board to focus recovery effort through a dedicated, specialised and motivated team for enhanced and timely recovery.

10) Prompt Corrective Action (PCA)

11) The bracketed figures indicate previous yearâs figures. Previous yearâs figures have been re-grouped /re-arranged/re-casted wherever considered necessary.

Mar 31, 2017

1. interest rate swaps

The Interest Rate Swap transactions undertaken for hedging are accounted for on accrual basis and transactions for trading are marked to market and net depreciation is provided for whereas appreciation, if any, is ignored.

Gain or loss on terminated interest rate swap transactions undertaken for hedging is deferred and recognized over the shorter of the remaining contractual life of the swap or remaining life of the asset or liability.

Income and expenses relating to the trading swaps are recognized on the settlement date.

Gain or losses on the termination of the trading swaps are recorded as income or expense immediately.

2. IMPAIRMENT OF ASSETS

Items of property, plant and equipment are reviewed for impairment whenever events or changes in circumstances warrant that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net discounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment, to be recognized, is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

3. NON-BANKING ASSETS

Non-Banking Assets are stated at cost.

4. Et WETH/REVENUE RECOGNITION

Income from non-performing assets/investments is recognized on realization basis in terms of RBI guidelines.

Commission on Letters of Credit/ Bank Guarantees/ Government Business / Locker Rent, Interest on Refund of Taxes, Dividend, Income on Units of Mutual Funds, Rental Income, and Service Charges on various Deposit Accounts are recognized on realization basis.

Recoveries in Written off Advances / Investments are accounted for as ''Miscellaneous Income''.

5. ^IT/LEASE

In accordance with AS 19 - Leases, lease payments for assets taken on operating lease are recognized in the profit & loss account over the period of lease and in respect of assets taken on finance lease, the asset is recognized in the books taking the lease premium as the cost and the same is amortized over the period of the lease.

6. TAXES ON INCOME

7. Current Tax

Current tax is provided using applicable tax rates on the taxable income determined on the basis of applicable tax laws, judicial pronouncements / legal opinions and the past assessments.

8. eÂ® / Deferred Tax

Deferred Tax is recognized subject to consideration of prudence, on timing difference, representing the difference between the taxable income and accounting income that originated in one period and are capable of reversal in one or more subsequent periods.

Deferred tax asset or liability is recognized using the tax rates that have been enacted or substantially enacted by the Balance Sheet date as per Accounting Standard 22 Accounting for Taxes on Income.

Deferred tax assets/liabilities are re-assessed at each reporting date, based upon management''s judgment as to whether their realization is considered as reasonably certain.

Deferred Tax Assets on carry forward of unabsorbed depreciation and tax losses are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future profits.

9. EARNINGS PER SHARE

The Bank reports basic and diluted earnings per share in accordance with AS 20 - ''Earnings per Share''. Basic earnings per share computed by dividing the net profit after tax and dividend on preferential shares by weighted average number of equity shares outstanding for the year.

Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue equity shares were exercised or converted during the year. Diluted earnings per share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at year end.

ACCOUNTING FOR PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

In conformity with Accounting Standard AS 29, "Provisions, Contingent Liabilities and Contingent Assets", the Bank recognizes provisions only when it has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Contingent Assets are not recognized in the financial statements.

10. SEGMENT REPORTING

The Bank recognizes the Business segment as the Primary reporting segment and Geographical segment as the Secondary reporting segment, in accordance with the RBI guidelines and in compliance with the Accounting Standard 17 issued by ICAI.

During the year the Bank issued and allotted -

a) 22,54,64,190 (Twenty Two crore Fifty Four Lakh Sixty Four Thousand One Hundred Ninety) equity shares of face value of ''10/- each (Rupees Ten Only) for cash at an issue price of Rs,41.47 (Rupees Forty One and paise Forty Seven only) per equity share including premium of Rs,31.47 (Rupees Thirty One and Paise Forty Seven Only) per share determined in accordance with Regulation 76(1) of SEBI ICDR Regulations 2009, on preferential basis to Govt. of India on 10.05.2016 resulting capital infusion of Rs,935 Crore.

b) 18,69,72,255 (Eighteen crore Sixty nine lakh Seventy two thousand Two hundred fifty five only) equity shares of face value of Rs,10/- each (Rupees Ten only) for cash at an issue price of Rs,41.45 (Rupees Forty One and paise Forty five Only) per share per equity share including premium of Rs,31.45 (Rupees Thirty One and Paise Forty Five Only) per share determined in accordance with regulation 76(1) of SEBI ICDR Regulations 2009, on preferential basis to Govt. of India on 05.10.2016 resulting capital infusion of Rs.775 Crore.

c) 7,17,00,000 (Seven Crore Seventeen lakh only) equity shares of face value of Rs,10/- each (Rupees Ten Only) for cash at an issue price of Rs,37.74 (Rupees Thirty seven and paise Seventy four only) per equity share including premium of Rs, 27.74 (Rupees Twenty seven and paise Seventy four only) per share determined in accordance with Regulation 76(4) of SEBI ICDR Regulations 2009, on preferential basis to Life Insurance Corporations of India on 29.11.2016 resulting capital infusion of Rs,270.59 crore.

d) During the year Bank has raised Non-Convertible, Unsecured Subordinated Fully Paid up Basel III Complaint perpetual Debt Instruments eligible for inclusion in Additional Tier 1 Capital of Rs,750 Cr through private placement.

e) Bank has issued unsecured redeemable non-convertible fully paid up Basel III compliant of Rs,10 Lakhs each (âBondsâ) aggregating to Rs,1000 crores to LIC of India.

1 Investments

12 The Details of investments and the movement of provisions held towards depreciation on the investments/Non Performing Investments of the Bank is given below:

13 Sale and transfers to/from HTM Category :

The value of sales and transfers of securities to/from HTM category, excluding the one time transfer of securities undertaken by the bank with the approval of Board of Directors, has not exceeded 5% of the book value of investments held in HTM category at the beginning of the year.

14 Disclosures on risk exposure in derivatives a) Qualitative Disclosures

i) The Structure and organization for management of risk in derivatives trading:

ii) The scope and nature of risk measurement, risk reporting and risk monitoring systems:

(iii) Policies for hedging and /or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/ mitigants:

IRS is undertaken on the actual interest bearing underlying assets or liabilities. The notional principal amount and maturity of the hedge does not exceed the value and maturity of underlying asset/liability. The risk is monitored on the mark to market basis of the outstanding interest rate swap contracts and accordingly the effectiveness of the hedge is determined.

c) Other Disclosures for Interest Rate Swaps

The Bank has undertaken fixed to floating and floating to fixed interest rate swaps on underlying assets and liabilities. The loss of income on the above IRS will be Rs,0.90 Crores, in case counter-parties fail to fulfill their obligations. There is no concentration of credit risk arising from IRS transactions undertaken as the counter-parties are banks and the exposure is within the exposure limit permitted.

15 Divergence in Asset Classification and Provisioning for NPAs as per RBS 2015-16

In terms of RBI Circular RBI/2016-17/283.BBR.BP.BC No.63/ 21.04.018/2016-17 dated 18.04.2017, wherever there is instances of material divergence from RBI norms, observed by RBI as a part of its supervisory process, in Bank''s Asset Classification and Provisioning Norms, a disclosure shall be made in notes to Accounts to Financial Statements. For the reference year 2015-16, there is no material divergence in gross NPAs observed by RBI.

* FITL balance is Rs,117.08 crores for Mar''17 sale.

# An amount of Rs,51.67 crores is outstanding as on 31/03/2017 for deferred loss on sale of NPA to SC/RC and the same amount has been debited to General reserve and credited to specific Provision.

Provision of an amount of Rs,34.10 Crore has been made during the year to meet the shortfall in sale of NPAs to SCs/RCs.

E sfTÂ®/Details of Non performing financial assets purchased/sold ''Details of Non performing financial assets purchased:

Based on the total assets of the Bank as on 31.03.2017 the provision requirement on account of Country Exposure is Rs,13.78 Cr. The Bank has taken a stock of its exposure in countries other than the home country as on 31^st March 2017.

16Details of Single Borrower Limit (SBL), Group Borrower Limit (GBL) exceeded by the bank.

17 Disclosure of penalties imposed by RBI.

During the financial year 2016-17 RBI has imposed two number of penalties amounting Rs,3.00 Crores under the provision of Section 46(4) of the Banking Regulation Act 1949.

18. Disclosures Requirement as per Accounting Standards:

19. Net Profit or Loss for the period, prior period items and changes in accounting policies (AS-5):

There is no material âprior period itemâ included in Profit & Loss account required to be disclosed as per AS - 5 issued by ICAI read with RBI guidelines.

20 Revenue Recognition (AS-9):

Revenue is recognized as per Accounting Standard (AS-9) and Accounting policy No. 10 of Schedule -17.

21 AS - 15 -Employee Benefits

A sum of Rs,894.98 Crore has been charged to Profit and Loss Account towards current year''s liabilities.

c) Associates

Regional Rural Banks (RRB) sponsored by the Bank are as under:

i) Bihar Gramin Bank

ii) Paschim Banga Gramin Bank

22 As the Bank does not have Subsidiaries or controlling interest in Associates/Joint Ventures, AS 21- Consolidated Financial Statements, AS 23 - Accounting for Investments in Associates in Consolidated Financial Statements, AS-24 - Discontinuing Operations, AS-25 - Interim Financial Reporting and AS 27 -Financial Reporting of Interest in Joint Ventures issued by the ICAI are not applicable to the Bank.

23 Accounting for Taxes on Income (AS-22):

a) During the year net amount of Rs,850.40 Crore (Rs,1680.94 Crore) has been recognized as Deferred Tax Assets as per accounting standard AS-22.

24Impairment of Assets (AS-28):

25 Contingent Liabilities

b) Disputed demand as per orders passed by Income Tax Department and demand displayed at TRACES (Income Tax Website) on account of Income Tax, TDS, Penalty, Interest and Interest Tax amounting to Rs,681.61 Crore (Rs,10.66 Crore) has been shown in Schedule 12 under Contingent Liability. No provision has been considered necessary by the Management as the matters are pending for disposal before various competent Authorities. It is pertinent to mention that Interest Tax issue pending before Hon''ble High Court of Kolkata amounting to Rs,3.38 Crore has been decided in favour of the Bank. On receipt of order effect form Income Tax department, Bank shall be entitled to receive the entire amount along with interest. Bank has received no intimation/notice regarding filing of appeal by Income Tax Department in any higher Forum/Supreme Court on this issue.

26 Disclosure of Letter of Comforts

Reconciliation of entries outstanding has been drawn up to 31.03.2017 in case of Inter-Branch Accounts and in Inter-Bank Accounts. Elimination of entries outstanding in Inter-Bank Accounts including Reserve Bank of India, State Bank of India, NOSTRO Accounts etc. and in Inter-Branch Accounts viz. branch adjustment balances pertaining to advances paid for acquisition of assets, sundry creditors etc. is in progress. In the opinion of the management, consequential effect of the above on the revenue/assets/liabilities will not be material.

27 Transfer to Depositor Education and Awareness Fund (DEAF)

28 Unhedged Foreign Currency Exposure:

- Monitoring and review of Unhedged Foreign Currency Exposure (UFCE) of all customers including SMEs.

- Incremental capital and provisioning requirements for exposures to entities with Unhedged Foreign Currency Exposure.

- Stipulation of UFCE Charge in order to provide protection and discourage entities having UFCE.

Based on the available data and financial statements and the declaration from borrowers, the bank has estimated the liability of Rs,56.37 lacs as on 31.03.2017 on Unhedged Foreign Currency Exposure (UFCE) to their constituents in terms of RBI Circulars and our Board approved policy and provision for the same has been provided in the books.

29Liquidity Coverage Ratio (LCR): Qualitative Assessment of LCR data and Result:

Drivers of a Comfortable LCR:

The Bank has been maintaining the LCR well above the regulatory requirement on an ongoing basis on solo as well as consolidated basis the main drivers of which are as under:

High Quality liquid Assets (HQLA): Our HQLA comprises of following

- Level 1 Assets

1. Cash in hand including Cash Reserve in excess of CRR

2. Govt. Securities in Excess of Mandatory SLR

3. Marginal standing Facility up to 2% of Net Demand and Time Liabilities in the form of SLR securities.

4. Facility to Avail Liquidity for liquidity Coverage Ratio up to 9% of Net Demand and Time Liabilities in the form of SLR securities.

- Level 2 Assets (Not issued by Banks/Financial Institution)

- Under Level 2A assets

1. Marketable securities representing claims on or claims guaranteed by Sovereigns Public Sector Entities (PSEs) having risk weight 20% under the Basel II

2. Corporate Bonds and Commercial Papers having minimum rating of AA-

- Under Level 2B assets

1. Securities issued or guaranteed by sovereigns having risk weight higher than 20% but not higher than 50% (i.e. Bonds with Rating AA & A)

2. Corporate Debt Securities (including Commercial Paper) having external rating between A and BBB-

3. Common Equity Shares Included in NSE CNX Nifty index and/or S&P BSE Sensex index

Concentration of Funding Sources: Our Funding sources is well spread with diversified liabilities portfolio comprising mainly of

- Current Deposit and Saving Deposit and

- Term Deposit ( normal and Bulk)

We do not have any group entities and liquidity at solo level is being managed centrally.

30 Fixed Assets

(i) Bank has adopted Revaluation Model for Land and Building and Cost Model for other Fixed Assets.

(ii) Bank has revalued its premises last on 31.03.2016 by independent qualified valuers. The excess of fair market value over the book value is credited to revaluation reserve. As on date aggregate amount of revaluation reserve (net of revaluation relating to assets disposed of) is Rs,2507.31 crore (Rs,2524.82 crore) and depreciation on the revalued portion charged is Rs,199.16 crore (Rs,159.16 crore). As per revised AS

10, Revaluation Reserve equal to the additional depreciation on account of Revaluation of the Building amounting to Rs,22.93 Crore (Previous year NIL) has been transferred to Revenue Reserve.

(iii) The valuer has valued the properties on the following methods :

Land: On market rates by enquiry from the locality based on the latest transactions and wherever this information is not available, Govt. approved rate is taken as reference rate.

Building: On PWD plinth rate as per latest schedule on the basis of type of construction and applying depreciation factor depending on age of the Building.

Other Disclosures :

a) In respect of six(6) lease hold properties, renewal lease is due for more than one year, Bank has applied for renewal of lease in these cases and will be completed in due course.

b) Existence and amount of restriction on title, property, Plant & Equipment pledged as security for liabilities - NIL

c) Contractual commitments for the acquisition of the property, plant & equipment as on 31.03.2017 - Rs,33.18 Crore.

d) Expenditure recognized in the carrying amount of an item of plant equipment and property in the course of construction is Rs,6.08 crore.

e) Amount of assets retired from active use and held for disposal - NIL

31 Breakup of provision held against non-performing advances into facility-wise, security-wise and sector-wise is not ascertained. The same is deducted on estimated basis from gross advances in the various categories to arrive at the balance of net advances as stated in Schedule 9 of the Balance Sheet.

32 Assets and liabilities have been suitably adjusted for events occurring after the balance sheet date that provide additional evidence to assist the estimation of amounts relating to conditions existing at the balance sheet date.

33) Disclosure on IND AS Background:

The Ministry of corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Rules 2015 and vide Notification dated March 30,2016 it has also notified the Roadmap for implementation of Indian Accounting Standards (IND AS) for scheduled Commercial Banks, Insurance Companies and NBFC''s from 1^st April,2018 onwards and also amendments to IND AS in line with the amendments made in IFRS/IAS vide companies (Indian Accounting Standards) amendment rules,2016.

RBI vide Circular dated June 23^rd ,2016 directed banks to submit IND AS preformed financial statements for the half year ended September 30,2016 by 30^th November 2016.

Strategy of IND AS Implementation:

Bank has also constituted IND AS working group within the bank who will be working on IND AS implantation project which comprises of officers from cross functional department.

Bank has also appointed M/s Deloitte Haskins & Sells LLP as IND AS consultant to assist the bank in implementation of Indian Accounting Standard (IND AS) as per RBI/MCA guidelines.

Progress on IND AS implementation:

Bank has submitted the Proforma IND AS Financial statements to Reserve Bank of India on 30th November 2016 with reconciliation of change in Equity & profit as on 30th September 16 compared with the previous GAAP figures.

Initial IND AS Impact assessment on the financials of Bank has been completed during preparation of proforma IND AS financial statements. IND AS Accounting Policies were also drafted along with the IND AS proforma financials.

IT changes required have been identified and Bank is in the process of required changes in the IT system.

Bank is also in the process of developing Expected Credit Loss (ECL) Model in line with the requirements of IND AS 109 and preparing the Opening IND AS Financial Statements as on 1st April 2017.

34) The bracketed figures indicate previous year''s figures. Previous year''s figures have been re-grouped /re-arranged/re-casted wherever considered necessary.

Mar 31, 2015

As on 31.3.2015 As on 31.3.2014

Claims Against the Bank not 20225.64 18994.49 Acknowledged as Debts

Liability for partly paid investments 528.50 767.50

Liability on account of outstanding 4644326.99 5249079.05 Forward Exchange Contracts

Guarantees Given on behalf of Constituents -

A) In India 1117757.85 888107.46

B) Outside India 7969.61 15938.05

Acceptances, Endorsements 1557331.53 1171870.02 and other Obligations

Other Items for which the bank is 134470.71 91055.19 contingently liable

TOTAL 7482610.83 7435811.76

1.1 Disclosures on risk exposure in derivatives a) Qualitative Disclosures

i) The Structure and organization for management of risk in derivatives trading:

The organization structure consists of Investment Wing at the Corporate level which report to the Executive Directors and Chairman & Managing Director and ultimately to the Board. Risk Management Department is informed of the transactions as and when they take place.

ii) The scope and nature of risk measurement, risk reporting and risk monitoring systems:

a) The Interest Rate Swap (IRS) transactions undertaken by the Bank are for hedging and trading purposes. Derivative as a product is also offered to the customer as per RBI norms. Such transactions are undertaken as per policies of the bank formulated based on RBI guidelines.

b) The risk is measured in the interest rate derivative transactions depending on the movement of benchmark interest rates for the remaining life of the interest rate swap contracts. All interest rate derivative transactions are included for the purpose of risk measurement. The risk is evaluated and reports are placed to the CMD/ED daily and Board periodically. Risk is monitored based on the mark to market position of the interest rate derivative transactions.

(iii) Policies for hedging and /or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/ mitigants:

IRS is undertaken on the actual interest bearing underlying assets or liabilities. The notional principal amount and maturity of the hedge does not exceed the value and maturity of underlying asset/liability. The risk is monitored on the mark to market basis of the outstanding interest rate swap contracts and accordingly the effectiveness of the hedge is determined.

Collateral required upon entering into IRS is Nil. Notional principal amount of IRS multiplied by the relevant conversion factor and the respective risk weight of the counter party has been taken into account for determining the capital requirements.

c) Other Disclosures for Interest Rate Swaps

The Bank has undertaken fixed to floating and floating to fixed interest rate swaps on underlying assets and liabilities. The loss of income on the above IRS will be Rs 2.35 Crore, in case counter-parties fail to fulfill their obligations. There is no concentration of credit risk arising from IRS transactions undertaken as the counter-parties are banks and the exposure is within the exposure limit permitted.

Based on the total assets of the Bank as on 31.03.2015, the provision requirement on account of Country Exposure is Rs Nil. The Bank has taken a stock of its exposure in countries other than the home country as on 31st March, 2015. The Bank's net funded exposure in each country is below 1% of its assets.

1.2 Details of Single Borrower Limit (SBL), Group Borrower Limit (GBL) exceeded by the bank.

A. Single Borrower Limit exceeded by the Bank:- Nil

1.3 Disclosure of penalties imposed by RBI.

Reserve Bank of India has not imposed any penalty on the Bank u/s 46(4) of the Banking regulation Act, 1949

2.0. Disclosures Requirement as per Accounting Standards:

2.1 Net Profit or Loss for the period, prior period items and changes in accounting policies (AS-5):

There is no material "prior period item" included in Profit & Loss account required to be disclosed as per AS - 5 issued by ICAI read with RBI guidelines.

2.2 Revenue Recognition (AS-9):

Revenue is recognized as per Accounting Standard (AS-9) and Accounting policy No. 9 of Schedule -17.

2.3 AS - 15 -Employee Benefits (AS-15):

Provision for Employee Benefits viz. Pension, Gratuity, Leave Encashment, Sick Leave, LFC/LTC, medical benefits to retired and in service Directors and their family members etc. has been made as per Revised Accounting Standard (AS) -15.

During the financial year 2010-11, the Bank reopened the Pension option for such of its employees who had not opted for Pension scheme earlier. The Bank in result incurred an additional liability of Rs 507.84 Crore due to the same. In the same financial year too, the limit of Gratuity payable to the employees was enhanced pursuant to the amendment of Gratuity Act, 1972. As a result the liability of Bank was also increased by Rs 292.51 Crore. As per RBI guidelines as enumerated in circular no. DBOD. BP. BC.80.21.04 .018/ 2010-11 dated 09.02.2011, the Bank decided to amortize the entire expenditure Rs 800.35 Crore in five years beginning from financial year 2010-11. Accordingly a sum of Rs 160.07 Crore (160.07 Crore) is charged to Profit and Loss A/C in terms of the requirements of the above RBI Circular. Upon amortization of the liabilities over last five years, the balance unrecognized liability to be amortised towards Second Option Pension and Gratuity as on March 31,2015 is NIL.

In addition to Rs 160.07 Crore (160.07 Crore), an amount of Rs 729.30 Crore (793.55 Crore) which includes liability for the employees benefits, has been charged to Profit and Loss Account towards current year's liabilities.

2.4 Related Party Disclosures (AS-18): a) Key Management Personnel

i) Chairman and Managing Director (CMD) Shri Arun Kaul (From 01.09.2010)

ii) Executive Directors (ED) Shri J K Garg (From 05.08.2013) Shri Charan Singh (From 10.03.2015) Shri S. Chandrasekharan (Till 30.06.2014)

Transactions with Key Management Personnel

c) Associates

Regional Rural Banks (RRB) sponsored by the Bank are as under:

i) Bihar Gramin Bank

ii) Paschim Banga Gramin Bank

d) The transactions with RRB have not been disclosed in view of Para -9 of the AS-18, "Related Party Disclosure" which exempts State Controlled Enterprises from making any disclosures pertaining to their transactions with other related parties, which are also State Controlled Enterprises

2.5 As the Bank does not have Subsidiaries or controlling interest in Associates/Joint Ventures, AS 21 relating to Consolidated Financial Statements, AS 23 relating to Accounting for Investments in Associates in Consolidated Financial Statements and AS 27 relating to Financial Reporting of Interest in Joint Ventures issued by the ICAI are not applicable to the Bank.

2.6 Accounting for Taxes on Income (AS-22):

a) During the year net amount of Rs 154.82 Crore (Rs 9.92 Crore

Deferred Tax Liability) has been recognised as Deferred Tax Assets as per accounting standard AS-22.

Fixed Assets include computer software, which has been considered as intangible assets as per AS-26 issued by the ICAI. The movement in software asset is given below:

In view of the absence of the indication of material impairment within the meaning of clause 5 to clause 13 of Accounting Standard-28 "Impairment of Assets", no impairment of fixed assets is required in respect of current financial year.

2.7 Contingent Liabilities

a) Such liabilities as mentioned at Serial No. (I) of Schedule 12 of Balance Sheet are dependent upon the judgement of court, arbitration award, out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties, respectively and necessary provision is made where claim against the Bank is tenable.

b) Based on various appellate decisions on identical issues / pending approval of Committee on Disputes for pursuing appeals, disputed demand of Income Tax, Penalty, Interest and Interest Tax amounting to Rs 10.66 Crore (Rs 10.66 Crore) has been shown in Schedule 12 under Contingent Liability. No provision has been considered necessary by the Management as the matters are pending for disposal before various competent Authorities. It is pertinent to mention that Interest Tax issue pending before Hon'ble High Court of Kolkata amounting to Rs 3.38 Crore has been decided in favour of the Bank. On receipt of order effect form Income Tax department, Bank shall be entitled to receive the entire amount along with interest. Bank has received no intimation/ notice regarding filing of appeal by Income Tax Department in any higher Forum/Supreme Court on this issue.

2.8 Floating Provisions Nil

2.8 Draw Down From Reserves

Pursuant to Reserve Bank of India (RBI) Circular No. DBR.No.BP.79/21.04.048/2014-15 dated 30th March 2015, Bank has utilized 50 % of its counter cyclical provisioning buffer held as at 31st March 2014. Accordingly, an amount of Rs 70.455 Crore out of counter cyclical provision of Rs 140.91 Crore held as on 31.03.2014 has been utilized towards specific provisions for non performing assets.

2.9 Disclosure of Letter of Comforts

The Bank issues Letter of Comforts on behalf of its various constituents against the credit limits sanctioned to them. In the opinion of Management, no significant financial impact and cumulative financial obligations have been assessed under LOCs issued by the Bank in the past, during the current year and still outstanding. Brief details of LOCs issued by the Bank are as follows:

2.10 Provisioning Coverage Ratio

The provision coverage as on 31.03.2015 works out to 52.65 % (57.02%).

2.11 Income from Bancassurance

Bank is a Corporate Agent of Life Insurance Corporation of India for Bancassurance Life and Reliance General Insurance Company Ltd for Bancassurance Non-Life business. Details of income from Bancassurance is given below:

2.12 Reconciliation:

Most of the inter branch transactions are reconciled automatically with implementation of Centralized Banking Solution (CBS). Very few entries under inter branch account & inter bank account requires reconciliation which is done on ongoing basis.

Reconciliation of entries outstanding has been drawn upto 31.03.2015 in case of Inter-Branch Accounts and in Inter- Bank Accounts. Elimination of entries outstanding in Inter- Bank Accounts including Reserve Bank of India, State Bank of India, NOSTRO Accounts etc. and in Inter-Branch Accounts viz. drafts, suspense, branch adjustment, clearing transactions, fund transfers, telegraphic transfers, balances pertaining to advances paid for acquisition of assets, sundry creditors etc. is in progress. In the opinion of the management, consequential effect of the above on the revenue/assets/liabilities will not be material.

2.13 Transfer to Depositor Education and Awareness Fund (DEAF)

(Â®tt%t / Amount in RsCrore)

2.14 Unhedged Foreign Currency Exposure:

In terms of RBI Guidelines, our Bank has framed a policy on 'Unhedged Foreign Exchange Exposure by borrowers including SMEs and Corporates duly approved by the Board. The policy inter-alia provides for:

- Monitoring and review of Unhedged Foreign Currency Exposure (UFCE) of all customers including SMEs.

- Incremental capital and provisioning requirements for exposures to entities with Unhedged Foreign Currency Exposure.

- Stipulation of UFCE Charge in order to provide protection and discourage entities having UFCE.

Based on the available data and financial statements and the declaration from borrowers, the bank has estimated the liability and made a provision of Rs 32.12 Lakh and allocated capital of Rs 0.74 Lacs as on 31.03.2015 on Unhedged Foreign Currency Exposure (UFCE) to their constituents in terms of RBI Circulars and our Board approved policy.

2.15 Liquidity Coverage Ratio (LCR):

Qualitative Assessment of LCR data and Result:

Driver of LCR:

The bank main driver of satisfactory level of LCR during the period have been

- High quality of Liquid Asset such as investment in Government securities

- Investment in short term assets resulting in quick inflows.

- Reliance on Stable liabilities.

High Quality liquid Assets (HQLA): Our HQLA comprises of following

- Level 1 Assets

1. Cash in hand including Cash Reserve in excess of CRR

2. Govt. Securities in Excess of Mandatory SLR

3. 7% of Net Demand and Time Liabilities in the form of SLR securities.

- Level 2 Assets (Not issued by Banks/Financial Institution)

1. Marketable securities representing claims on or claims guaranteed by Public Sector Entities (PSEs) having risk weight 20% under the Basel II

2. Common Equity Shares Included in NSE CNX Nifty index and/or S&P BSE Sensex index

Concentration of Funding Sources: Our Funding sources is well spread with diversified liabilities portfolio comprising mainly of

- Current Deposit and Saving Deposit, and

- Term Deposit

We do not have any group entities and liquidity at solo level is being managed centrally.

2.16 Fixed Assets

(i) Bank had revalued on few occasions in the past, its premises by independent qualified valuers and the excess of fair market value over the original cost was credited to revaluation reserve. As on date aggregate amount of revaluation reserve (net of revaluation relating to assets disposed of) is Rs 764.23 crore (Rs 737.08 crore) and depreciation on the revalued portion charged to above revaluation reserve (net of depreciation relating to assets disposed of) is Rs 154.50 Crore (Rs 149.68 crore).

(ii) Consequent upon repeal of Schedule XIV of the Companies Act, 1956, the rates of depreciation prescribed in the erstwhile Schedule XIV have been adopted by the management for onward application. As there is no change in the rates, there is no impact on the financial statements of the Bank as regards depreciation due to shift from Schedule XIV rates to management prescribed rates.

2.17 Break up of provision held against non-performing advances into facility-wise, security-wise and sector-wise is not ascertained. The same is deducted on estimated basis from gross advances in the various categories to arrive at the balance of net advances as stated in Schedule 9 of the Balance Sheet.

2.18 Assets and liabilities have been suitably adjusted for events occurring after the balance sheet date that provide additional evidence to assist the estimation of amounts relating to conditions existing at the balance sheet date.

3. The Bank has complied with the findings of Annual Financial Inspection of RBI of 2014 with regard to divergent accounts except for 4 borrower accounts aggregating to Rs1120.76 Crores which have not been declared as Non-performing requiring a provision of Rs339.35 Crores wherein the bank is preferring further representations before appropriate authorities of RBI for review and dispensation and has reasonable ground to believe that such divergent issues will be settled in its favour. However, the Bank has made the required provision of Rs339.35 Crore in terms of AFI direction against these four borrower accounts.

4. The bracketed figures indicate previous year's figures. Previous year's figures have been re-grouped/ re-arranged/re-casted wherever considered necessary.

Mar 31, 2014

1. a) During the year, Bank allotted 2,59,10,091 equity Shares of Rs.10/- each to Government of India at an issue price of Rs.77.19 per Share and received Rs.199,99,99,924.29 against allotment of the above equity Shares. Out of this, Rs.25,91,00,910 is transferred to Share Capital Account and Rs.174,08,99,014.29 is transferred to Share Premium Account.

b) During the year, Bank allotted 23,61,70,488 equity shares of Rs.10/- each to Government of India at an issue price of Rs.77.19 per share on conversion of 182300 Perpetual Non Cumulative Preference Shares (PNCPS) of Rs.1,00,000 Lakh each aggregating to Rs.1823 Crore held by Government of India. Out of Rs.1823 Crore held under PNCPS account, an amount of Rs.236,17,04,880 is appropriated to Share Capital Account and balance amount of Rs. 1586,82,95,120 is appropriated to Share Premium Account.

During the financial year 2013-14 there was transfer of securities from ''Available for Sale'' (AFS) to Held to Maturity (HTM) category of Rs.6243.03 Crores (BV) under special provision with the approval of Board of Directors (BOD). Depreciation amounting to Rs.23.71 Crore on account of such transfer has been charged to Profit and Loss Account.

2. Disclosures on risk exposure in derivatives

a) Qualitative Disclosures

i) The Structure and organization for management of risk in derivatives trading:

The organization structure consists of Investment Wing at the Corporate level which report to the Executive Directors and Chairman & Managing Director and ultimately to the Board. Risk Management Department is informed of the transactions as and when they take place.

ii) The scope and nature of risk measurement, risk reporting and risk monitoring systems:

a) The Interest Rate Swap (IRS) transactions undertaken by the Bank are for hedging and trading purposes. Derivative as a product is also offered to the customer as per RBI norms. Such transactions are undertaken as per policies of the bank formulated based on RBI guidelines.

b) The risk is measured in the interest rate derivative transactions depending on the movement of benchmark interest rates for the remaining life of the interest rate swap contracts. All interest rate derivative transactions are included for the purpose of risk measurement. The risk is evaluated and reports are placed to the CMD/ED daily and Board periodically. Risk is monitored based on the mark to market position of the interest rate derivative transactions.

(iii) Policies for hedging and /or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/ mitigants:

IRS is undertaken on the actual interest bearing underlying assets or liabilities. The notional principal amount and maturity of the hedge does not exceed the value and maturity of underlying asset/liability. The risk is monitored on the mark to market basis of the outstanding interest rate swap contracts and accordingly the effectiveness of the hedge is determined.

Collateral required upon entering into IRS is Nil. Notional principal amount of IRS multiplied by the relevant conversion factor and the respective risk weight of the counter party has been taken into account for determining the capital requirements.

c) Other Disclosures for Interest Rate Swaps

The Bank has undertaken fixed to floating and floating to fixed interest rate swaps on underlying assets and liabilities. The loss of income on the above IRS will be Rs.6.70 Crore, in case counter-parties fail to fulfil their obligations. There is no concentration of credit risk arising from IRS transactions undertaken as the counter-parties are banks and the exposure is within the exposure limit permitted.

3. Disclosure of penalties imposed by RBI.

Reserve Bank of India has not imposed any penalty on the Bank u/s 46(4) of the Banking regulation Act, 1949

4. Disclosures Requirement as per Accounting Standards:

5. There is no material "prior period item" included in Profit & Loss account required to be disclosed as per AS Â 5 issued by ICAI read with RBI guidelines.

6. Revenue Recognition

During the year Bank has changed its accounting practice to recognize commission earned on Letter of Credit, Guarantees issued and interest on since Bill on accrual basis instead of realization to comply with Accounting Standard (AS-9). The profits for the year 2013-14 would have been higher by Rs.142.88 crore if the practice of recognition of above said commission on realization basis continued for the financial year. The impact on account of transition to the new system pertaining to the transactions accounted for under the old system could not be ascertained and the exercise is currently going on. The necessary adjustment, if any, will be carried out as and when the impact is ascertained.

7. AS - 15 ÂEmployee Benefits

Provision for Employee Benefits viz. Pension, Gratuity, Leave Encashment, Sick Leave, LFC/LTC, medical benefits to retired and in service Directors and their family members etc. has been made as per Revised Accounting Standard (AS) -15.

During the financial year 2010-11, the Bank reopened the Pension option for such of its employees who had not opted for Pension scheme earlier. The Bank in result incurred an additional liability of Rs.507.84 Crore due to the same. In the same financial year too, the limit of Gratuity payable to the employees was enhanced pursuant to the amendment of Gratuity Act, 1972. As a result the liability of Bank was also increased by Rs.292.51 Crore. As per RBI guidelines as enumerated in circular no. DBOD.BP.BC.80.21.04.018/2010- 11 dated 09.02.2011, the Bank decided to amortize the entire expenditure Rs.800.35 Crore in five years beginning from financial year 2010-11. Accordingly a sum of Rs.160.07 Crore (160.07 Crore) is charged to Profit and Loss A/C in terms of the requirements of the above RBI Circular. The balance amount of Rs.160.07 Crore (320.14 Crore) is carried forward.

In addition to Rs.160.07 Crore (160.07 Crore), an amount of Rs.793.55 Crore (734.64 Crore) which includes liability for the employees benefits, has been charged to Profit and Loss Account towards current year''s liabilities.

8. Related Party Disclosures: a) Key Management Personnel

i) Chairman and Managing Director

Shri Arun Kaul (From 01.09.2010)

ii) Executive Directors

Shri S. Chandrasekharan (From 01.10.2011)

Shri J K Garg (From 05.08.2013)

Shri N.R. Badrinarayanan (Till 30.06.2013)

c) Associates

Regional Rural Banks sponsored by the Bank are as under:

i) Bihar Gramin Bank

ii) Paschim Banga Gramin Bank

d) The transactions with Associates have not been disclosed in view of Para -9 of the AS-18, "Related Party Disclosure" which exempts State Controlled Enterprises from making any disclosures pertaining to their transactions with other related parties, which are also State Controlled Enterprises

9. As the Bank does not have Subsidiaries or controlling interest in Associates/Joint Ventures, AS 21 relating to Consolidated Financial Statements, AS 23 relating to Accounting for Investments in Associates in Consolidated Financial Statements and AS 27 relating to Financial Reporting of Interest in Joint Ventures issued by the ICAI are not applicable to the Bank.

10. Taxes on Income

a) During the year net amount of Rs.9.92 Crore (Rs.6.00 Crore) has been recognised as Deferred Tax Liabilities as per accounting standard AS-22.

b) In accordance with the "Guidance Note on Accounting for credit available in respect of MAT under the Income Tax Act, 1961" issued by the ICAI, the MAT credit for the current year amounting to Rs.165.12 Crore (Rs.350.64 crore) has been credited to P&L Account under "Provisions and Contingencies" by debiting MAT credit entitlement Account since the management is of the opinion that the MAT credit can be set off during the specified period as per the Provisions of the Income Tax Act, 1961.

11. Intangible assets

Fixed Assets include computer software, which has been considered as intangible assets as per AS-26 issued by the ICAI. The movement in software asset is given below:

12. Impairment of Assets

In view of the absence of the indication of material impairment within the meaning of clause 5 to clause 13 of Accounting Standard-28 "Impairment of Assets", no impairment of fixed assets is required in respect of current financial year.

13. Additional disclosures:

14. Contingent Liabilities

a) Such liabilities as mentioned at Serial No. (I) of Schedule 12 of Balance Sheet are dependent upon the judgement of court, arbitration award, out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties, respectively and necessary provision is made where claim against the Bank is tenable.

b) Based on various appellate decisions on identical issues / pending approval of Committee on Disputes for pursuing appeals, disputed demand of Income Tax, Penalty, Interest and Interest Tax amounting to Rs.10.66 Crore (Rs.90.91 Crore) has been shown in Schedule 12 under Contingent Liability. No provision has been considered necessary by the Management as the matters are pending for disposal before various competent Authorities. It is pertinent to mention that Interest Tax issue pending before Hon''ble High Court of Kolkata amounting to Rs.3.38 Crore has been decided in favor of the Bank. On receipt of order effect form Income Tax department, Bank shall be entitled to receive the entire amount along with interest. Bank has received no intimation/ notice regarding filing of appeal by Income Tax Department in any higher Forum/Supreme Court on this issue.

15. Floating Provisions Nil

16. Draw Down From Reserves

Pursuant to Reserve Bank of India (RBI) Circular No. DBOD.No.BP.95/21.04.048/2013-14 dated 7th February 2014, Bank has utilised 33 % of its counter cyclical provisioning buffer held as at 31st March 2013. Accordingly, an amount of Rs.69.41 Crore out of counter cyclical provision of Rs.210.32 Crore held as on 31.03.2013 has been utilized towards specific provisions for non performing assets.

17. Provisioning Coverage Ratio

The provision coverage as on 31.03.2014 works out to 57.02 % (52.08%).

18. Reconciliation:

Most of the inter branch transactions are reconciled automatically with implementation of Centralized Banking Solution (CBS). Very few entries under inter branch account & inter bank account requires reconciliation which is done on ongoing basis.

Reconciliation of entries outstanding has been drawn upto 31.03.2014 in case of Inter-Branch Accounts and in Inter- Bank Accounts. Elimination of entries outstanding in Inter- Bank Accounts including Reserve Bank of India, State Bank of India, NOSTRO Accounts etc. and in Inter-Branch Accounts viz. drafts, suspense, branch adjustment, clearing transactions, fund transfers, telegraphic transfers, balances pertaining to advances paid for acquisition of assets, sundry creditors etc. is in progress. In the opinion of the management, consequential effect of the above on the revenue/assets/liabilities will not be material.

19. Fixed Assets

A) Bank had revalued on few occasions in the past, its premises by independent qualified values and the excess of fair market value over the original cost was credited to revaluation reserve. As on date aggregate amount of revaluation reserve (net of revaluation relating to assets disposed of) is Rs.737.08 crore (Rs.689.11 crore) and depreciation on the revalued portion charged to above revaluation reserve (net of depreciation relating to assets disposed of) is Rs.149.68 crore (Rs.144.41 crore)

B) Premises including Assets with Written Down Value of Rs.2.12 crores (Rs.2.23 crores), which were revalued at Rs.23.03 crores in respect of, which documentation/ registration is pending.

C) Estimated amount of contracts (net of advance) remaining to be executed on capital account and not provided for Rs.13.52 Crore (Rs.52.55 crore)

D) Land & Building situated at Ahmedabad (Bhadra Branch - 0007) compulsory required by MCA for heritage complex for consideration of Rs.1.87 Crore kept in sundry creditors pending ascertainment of WDV of the said premises which was acquired by the bank in 1962.

20. Break up of provision held against non-performing advances into facility-wise, security-wise and sector-wise is not ascertained. The same is deducted on estimated basis from gross advances in the various categories to arrive at the balance of net advances as stated in Schedule 9 of the Balance Sheet.

21. The bracketed figures indicate previous year''s figures. Previous year''s figures have been re-grouped /re- arranged/re-casted wherever considered necessary.

Mar 31, 2013

A) During the year, Bank allotted 8,79,16,343 equity Shares to Government of India at an issue price of Rs. 77.46 per Share and received Rs. 680,99,99,928.78 against allotment of the above equity Shares. Out of this, Rs. 87,91,63,430 is transferred to Share Capital Account and Rs. 593,08,36,498.78 towards Share Premium Account.

b) During the year, Bank has mobilized 9 % Unsecured Redeemable Non Convertible Subordinated Lower Tier II Bonds having face value of Rs. 10 lakh aggregating to Rs. 1000 Crore.

1.0 Investments

1.1 The Details of investments and the movement of provisions held towards depreciation on the investments/ Non Performing Investments of the Bank is given below:

1.2 Sale and transfers to/from HTM Category

The value of sales and transfers of securities to/from HTM category has not exceeded 5% of the book value of investments held in HTM category at the beginning of the year.

During the financial year 2012-13 there was transfer of securities from ''Available for Sale'' (AFS) to Held to Maturity (HTM) category of Rs. 3211.64 Crores (FV) with the approval of Board of Directors (BOD) at the beginning of the year. Depreciation amounting to Rs. 28.30 Crore on account of such transfer has been charged to Profit and Loss Account.

2.1 Disclosures on risk exposure in derivatives

a) Qualitative Disclosures

i) The Structure and organization for management of risk in derivatives trading:

The organization structure consists of Investment Wing at the Corporate level which report to the Executive Directors and Chairman & Managing Director and ultimately to the Board. Risk Management Department is informed of the transactions as and when they take place.

ii) The scope and nature of risk measurement, risk reporting and risk monitoring systems:

a) The Interest Rate Swap (IRS) transactions undertaken by the Bank are for hedging and trading purposes. Derivative as a product is also offered to the customer as per RBI norms. Such transactions are undertaken as per policies of the bank formulated based on RBI guidelines.

b) The risk is measured in the interest rate derivative transactions depending on the movement of benchmark interest rates for the remaining life of the interest rate swap contracts. All interest rate derivative transactions are included for the purpose of risk measurement. The risk is evaluated and reports are placed to the CMD/ ED daily and Board periodically. Risk is monitored based on the mark to market position of the interest rate derivative transactions.

(iii) Policies for hedging and /or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/ mitigants:

IRS is undertaken on the actual interest bearing underlying assets or liabilities. The notional principal amount and maturity of the hedge does not exceed the value and maturity of underlying asset/liability. The risk is monitored on the mark to market basis of the outstanding interest rate swap contracts and accordingly the effectiveness of the hedge is determined.

Collateral required upon entering into IRS is Nil. Notional principal amount of IRS multiplied by the relevant conversion factor and the respective risk weight of the counter party has been taken into account for determining the capital requirements.

c) Other Disclosures for Interest Rate Swaps

The Bank has undertaken fixed to floating and floating to fixed interest rate swaps on underlying assets and liabilities. The loss of income on the above IRS will be Rs. 2.03 Crore, in case counter-parties fail to fulfill their obligations. There is no concentration of credit risk arising from IRS transactions undertaken as the counter-parties are banks and the exposure is within the exposure limit permitted.

Based on the total assets of the Bank as on 31.03.2013, the provision requirement on account of Country Exposure is Rs. Nil. The Bank has taken a stock of its exposure in countries other than the home country as on 31st March, 2013. The Bank''s net funded exposure in each country is below 1% of its assets.

3.1. Disclosure of penalties imposed by RBI.

Reserve Bank of India has not imposed any penalty on the Bank u/s 46(4) of the Banking Regulation Act, 1949

4.0. Disclosures Requirement as per Accounting Standards:

4.1 There is no material "prior period item" included in Profit & Loss account required to be disclosed as per AS - 5 issued by ICAI read with RBI guidelines.

4.2 Revenue Recognition

Commission earned on Letter of Credit, Guarantees issued and interest on usuance Bill are recognised on realization basis as per Bank''s accounting policy which is not in accordance with AS-9.

4.3 AS-15 - Employee Benefits

Provision for Employee Benefits viz. Pension, Gratuity, Leave Encashment, Sick Leave, LFC/LTC, medical benefits to retired and in service Directors and their family members etc. has been made as per Accounting Standard (AS) -15 (Revised) .

During the financial year 2010-11, the Bank reopened the Pension option for such of its employees who had not opted for Pension scheme earlier. The Bank in result incurred an additional liability of Rs. 507.84 Crore due to the same. In the same financial year too, the limit of Gratuity payable to the employees was enhanced in pursuance to the amendment of Gratuity Act, 1972. As a result the liability of Bank was also increased by Rs. 292.51 Crore. As per RBI guidelines as enumerated in circular no. DBOD.BP.BC.80.21.04.018/ 2010-11 dated 09.02.2011, the Bank decided to amortise the entire expenditure of Rs. 800.35 Crore in five years beginning from financial year 2010-11. Accordingly a sum of Rs.160.07 Crore (160.07 Crore) is charged to Profit and Loss A/C in terms of the requirements of the above RBI Circular. The balance amount of Rs. 320.14 Crore (480.21Crore) is carried forward.

In addition to Rs.160.07 Crore (160.07 Crore), an amount of Rs. 734.64. Crore (Rs. 584.17 Crore) which includes liability for the employees benefits, has been charged to Profit and Loss Account towards current year''s liabilities.

4.5 Related Party Disclosures:

a) Key Management Personnel

i) Chairman and Managing Director Shri Arun Kaul (From 01.09.2010)

ii) Executive Directors

Shri N.R. Badrinarayanan (From 01.09.2010) Shri S. Chandrasekharan (From 01.10.2011)

c) Associates

Regional Rural Banks sponsored by the Bank are as under:

i) Bihar Gramin Bank

ii) Paschim Banga Gramin Bank

d) The transactions with Associates have not been disclosed in view of Para-9 of the AS-18, "Related Party Disclosure" which exempts State Controlled Enterprises from making any disclosures pertaining to their transactions with other related parties, which are also State Controlled Enterprises

4.6 As the Bank does not have Subsidiaries or controlling interest in Associates/Joint Ventures, AS 21 relating to Consolidated Financial Statements, AS 23 relating to Accounting for Investments in Associates in Consolidated Financial Statements and AS 27 relating to Financial Reporting of Interest in Joint Ventures issued by the ICAI are not applicable to the Bank.

4.7 Taxes on Income

a) During the year net amount of Rs. 6.00 Crore (Rs. 78.93 Crore as Deferred Tax Assets) has been recognised as Deferred Tax Liabilities as per accounting standard AS-22.

b) In accordance with the "Guidance Note on Accounting for credit available in respect of MAT under the Income Tax Act, 1961" issued by the ICAI, the MAT credit for the current year amounting to Rs. 350.64 Crore (Rs. 292.26 crore) has been credited to P&L Account under "Provisions and Contingencies" by debiting MAT credit entitlement Account since the management is of the opinion that the MAT credit can be set off during the specified period as per the Provisions of the Income Tax Act, 1961.

4.8 Intangible assets

Fixed Assets include computer software, which has been considered as intangible assets as per AS-26 issued by the ICAI. The movement in software asset is given below:

4.9 Impairment of Assets

In view of the absence of the indication of material impairment within the meaning of clause 5 to clause 13 of Accounting Standard-28 "Impairment of Assets", no impairment of fixed assets is required in respect of current financial year.

5.0 Additional disclosures:

5.1 Provisions & Contingencies

5.2 Contingent Liabilities

a) Such liabilities as mentioned at Serial No. (I) of Schedule 12 of Balance Sheet are dependent upon the judgement of court, arbitration award, out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties, respectively and necessary provision is made where claim against the Bank is tenable.

b) Based on various appellate decisions on identical issues / pending approval of Committee on Disputes for pursuing appeals, disputed demand of Income Tax, Penalty, Interest and Interest Tax amounting to Rs. 90.91 Crore (Rs. 90.91 Crore) has been shown in Schedule 12 under Contingent Liability. No provision has been considered necessary by the Management as the matters are pending for disposal before various competent Authorities and payments/ adjustment of Rs. 35.65 Crore (Rs.. 35.65 crore) has been included in Other Assets in Schedule 11.

5.3 Floating Provisions

Nil

5.4 Draw Down From Reserves

There is no draw down from Reserves.

5.5 Disclosure of Letter of Comforts

The Bank issues Letter of Comforts on behalf of its various constituents against the credit limits sanctioned to them. In the opinion of Management, no significant financial impact and cumulative financial obligations have been assessed under LOCs issued by the Bank in the past, during the current year and still outstanding. Brief details of LOCs issued by the Bank are as follows:

5.6 Provisioning Coverage Ratio

The provision coverage as on 31.03.2013 works out to 52.08 % (54.39%).

5.7 Reconciliation:

Most of the inter branch transactions are reconciled automatically with implementation of Centralized Banking Solution (CBS). Very few entries under inter branch account & inter bank account require reconciliation which is done on ongoing basis.

Reconciliation of entries outstanding has been drawn upto

31.03.2013 in case of Inter-Branch Accounts and in Inter- Bank Accounts. Elimination of entries outstanding in Inter- Bank Accounts including Reserve Bank of India, State Bank of India, NOSTRO Accounts etc. and in Inter-Branch Accounts viz. drafts, suspense, branch adjustment, clearing transactions, fund transfers, telegraphic transfers, balances pertaining to advances paid for acquisition of assets, sundry creditors etc. is in progress. In the opinion of the management, consequential effect of the above on the revenue/assets/liabilities will not be material.

5.8 Fixed Assets

a) Bank had revalued on few occasions in the past, its premises by independent qualified valuers and the excess of fair market value over the original cost was credited to revaluation reserve. As on date aggregate amount of revaluation reserve (net of revaluation relating to assets disposed off) is Rs. 689.12 Crore (Rs. 633.21 Crore) and depreciation on the revalued portion charged to the above revaluation reserve (net of depreciation relating to assets disposed off) is Rs. 144.41 Crore (Rs. 139.09 Crore).

b) Premises include revalued Assets with written down value of Rs. 2.32 Crores (Rs. 2.44 Crores ) which were revalued at Rs. 23.03 Crore in respect of which documentation/ registration is pending.

c) Estimated amount of contracts (net of advance) remaining to be executed on capital account and not provided for Rs. 30.65 Crore (Rs. 7.50 Crore)

5.9 Break up of provision held against non-performing advances into facility-wise, security-wise and sector-wise is not ascertained. The same is deducted on estimated basis from gross advances in the various categories to arrive at the balance of net advances as stated in Schedule 9 of the Balance Sheet.

5.10 The bracketed figures indicate previous year''s figures. Previous year''s figures have been re-grouped /re- arranged/re-casted wherever considered necessary.

5.11 Notes on revised Balance Sheet.

The financial Statements were approved by the Board of Directors on 7th May 2013 proposing a dividend at the rate of Rs. 1/- per equity share. Subsequently, the Board considered the proposal to pay dividend at the rate of Rs.1.60 per equity share and the financial statements as on 31st March 2013 have been revised to include an amount of Rs. 140.89 Crore (inclusive of Dividend Tax of Rs. 20.47 Crore) which have been duly approved by the Board of Directors in its meeting held on 24th May 2013 at New Delhi.

Mar 31, 2012

A) During the year, Bank allotted 58,18,887 equity Shares to Government of India at an issue price of Rs 82.49 per Share and received Rs 47,99,99,988.63 against allotment of the above equity Shares. Out of this, Rs 5,81,88,870 is transferred to Share Capital Account and Rs 42,18,11,118.63 towards Share Premium Account.

b) During the year, Bank also allotted 3,13,75,874 equity Shares to LIC of India at an issue price of Rs 82.49 per share and received Rs 258,81,95,846.26 against allotment of the above equity Shares. Out of this, Rs 31,37,58,740 is transferred to Share Capital Account and Rs 227,44,37,106.26 towards Share Premium Account.

1.0 Investments

1.1 The Details of investments and the movement of provisions held towards depreciation on the investments/ Non Performing Investments of the Bank is given below:

1.2 Sale and transfers to/from HTM Category

The value of sales and transfers of securities to/from HTM category has not exceeded 5% of the book value of investments held in HTM category at the beginning of the year.

During the financial year 2011-12 there was transfer of securities from 'Available for Sale' (AFS) to Held to Maturity (HTM) category of Rs 3529.69 Crores with the approval of Board of Directors (BOD) at the beginning of the year. Depreciation amounting to Rs 45.14 Crore on account of such transfer has been charged to Profit and Loss Account.

2.1 Disclosures on risk exposure in derivatives

a) Qualitative Disclosures

i) The Structure and organization for management of risk in derivatives trading:

The organization structure consists of Investment Wing at the Corporate level which report to the Executive Directors and Chairman & Managing Director and ultimately to the Board. Risk Management Department is informed of the transactions as and when they take place.

ii) The scope and nature of risk measurement, risk reporting and risk monitoring systems:

a) The Interest Rate Swap (IRS) transactions undertaken by the Bank are for hedging and trading purposes. Derivative as a product is also offered to the customer as per RBI norms. Such transactions are undertaken as per policies of the bank formulated based on RBI guidelines.

b) The risk is measured in the interest rate derivative transactions depending on the movement of benchmark interest rates for the remaining life of the interest rate swap contracts. All interest rate derivative transactions are included for the purpose of risk measurement. The risk is evaluated and reports are placed to the CMD/ ED daily and Board periodically. Risk is monitored based on the mark to market position of the interest rate derivative transactions.

(iii) Policies for hedging and /or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/ mitigates:

IRS is undertaken on the actual interest bearing underlying assets or liabilities. The notional principal amount and maturity of the hedge does not exceed the value and maturity of underlying asset/liability. The risk is monitored on the mark to market basis of the outstanding interest rate swap contracts and accordingly the effectiveness of the hedge is determined.

Collateral required upon entering into IRS is Nil. Notional principal amount of IRS multiplied by the relevant conversion factor and the respective risk weight of the counter party has been taken into account for determining the capital requirements.

c) Other Disclosures for Interest Rate Swaps

The Bank has undertaken fixed to floating and floating to fixed interest rate swaps on underlying assets and liabilities. The loss of income on the above IRS will be Rs 16.54 Crore (Rs 10.51 Crore), in case counter-parties fail to fulfill their obligations. There is no concentration of credit risk arising from IRS transactions undertaken as the counter-parties are banks and the exposure is within the exposure limit permitted.

Based on the total assets of the Bank as on 31.03.2012, the provision requirement on account of Country Exposure is Rs. Nil. The Bank has taken a stock of its exposure in countries other than the home country as on 31st March, 2012. The Bank's net funded exposure in each country is below 1% of its assets.

3.1 Details of Single Borrower Limit (SBL), Group Borrower Limit (GBL) exceeded by the bank.

4.1. Disclosure of penalties imposed by RBI.

Reserve Bank of India has not imposed any penalty on the Bank u/s 46(4) of the Banking regulation Act, 1949

5.0. Disclosures Requirement as per Accounting Standards:

5.1 There is no material "prior period item" included in Profit & Loss account required to be disclosed as per AS - 5 issued by ICAI read with RBI guidelines.

5.2 Revenue Recognition

Commission earned on Letter of Credit and Guarantees issued are recognized on realization basis as per Bank's accounting policy which is not in accordance with AS-9. However, the amount is insignificant.

5.3 AS - 15 -Employee Benefits

Provision for Employee Benefits viz. Pension, Gratuity, Leave Encashment, Sick Leave, LFC/LTC, medical benefits to retired and in service Directors and their family members etc. has been made as per Revised Accounting Standard (AS) -15. In terms of Limited Revision to AS-15 Employee Benefits (Revised 2005) and guidelines notes thereon, the Bank has decided to recognize the increase in transitional liability over the liability that could have been recognized as per the Pre Revised AS-15 as on 31.03.2007 as an expense on a straight-line basis over 5 years from financial year 2007-08. Accordingly, Rs 88.69 Crore has been charged to Profit and Loss Account towards amortization of the increase in liability. There is no unamortized portion as at the end of the financial year 2011-2012 in this regard.

During the last financial year, the Bank reopened the Pension option for such of its employees who had not opted for Pension scheme earlier. The Bank in result incurred an additional liability of Rs 507.84 Crore due to the same. In the last financial year too, the limit of Gratuity payable to the employees was enhanced to pursuant to the amendment of Gratuity Act, 1972. As a result the liability of Bank was also increased by Rs 292.51 Crore. As per RBI guidelines as enumerated in circular no. DBOD. BP.BC. 80.21.04. 018/ 2010-11 dated 09.02.2011, the Bank decided to amortize the entire expenditure Rs 800.35 Crore in five years beginning from financial year 2010-11. Accordingly a sum of Rs 160.07 Crore (Rs 160.07 Crore) is charged to Profit and Loss A/C in terms of the requirements of the above RBI Circular. The balance amount of Rs 480.21 Crore C 640.28 Crore) is carried forward.

In addition to Rs 160.07 Crore (Rs 160.07 Crore), an amount of Rs 584.17 Crore (Rs 461.84 Crore) which includes liability for the employees benefits, has been charged to Profit and Loss Account towards current year's liabilities.

5.4 Related Party Disclosures:

a) Key Management Personnel

i) Chairman and Managing Director Shri Arun Kaul (From 01.09.2010)

ii) Executive Directors

Shri Ajai Kumar ( Till 30.09.2011)

Shri N.R. Badrinarayanan (From1-9-2010) Shri S. Chandrasekharan (From 01.10.2011)

c) Associates

Regional Rural Banks sponsored by the Bank are as under:

i) Jaipur Thar Gramin Bank

ii) Kalinga Gramya Bank

iii) Bihar Kshetriya Gramin Bank

iv) Mahakaushal Gramin Bank

v) Paschim Banga Gramin Bank

d) The transactions with Associates have not been disclosed in view of Para -9 of the AS-18, "Related Party Disclosure" which exempts State Controlled Enterprises from making any disclosures pertaining to their transactions with other related parties, which are also State Controlled Enterprises

5.6 As the Bank does not have Subsidiaries or controlling interest in Associates/Joint Ventures, AS 21 relating to Consolidated Financial Statements, AS 23 relating to Accounting for Investments in Associates in Consolidated Financial Statements and AS 27 relating to Financial Reporting of Interest in Joint Ventures issued by the ICAI are not applicable to the Bank.

5.7 Taxes on Income

a) During the year net amount of Rs 78.93 Crore (Rs 30.51 Crore) has been recognised as Deferred Tax Asset as per accounting standard AS-22. However, DTA on carried forward loss as per return to the extent of Rs 120.51 Crore (Rs 371.27 Crore) has gone for appeal, has not been recognized on account of prudence.

b) In accordance with the "Guidance Note on Accounting for credit available in respect of MAT under the Income Tax Act, 1961" issued by the ICAI, the MAT credit for the current year amounting to Rs 292.26 Crore (Rs 286.10 crore) has been credited to P&L Account under "Provisions and Contingencies" by debiting MAT credit entitlement Account since the management is of the opinion that the MAT credit can be set off during the specified period as per the Provisions of the Income Tax Act, 1961.

5.8 Intangible assets

Fixed Assets include computer software, which has been considered as intangible assets as per AS-26 issued by the ICAI. The movement in software asset is given below:

5.9 Impairment of Assets

In view of the absence of the indication of material impairment within the meaning of clause 5 to clause 13 of Accounting Standard-28 "Impairment of Assets", no impairment of fixed assets is required in respect of current financial year.

6.1 Contingent Liabilities

a) Such liabilities as mentioned at Serial No. (I) of Schedule 12 of Balance Sheet are dependent upon the judgment of court, arbitration award, out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties, respectively and necessary provision is made where claim against the Bank is tenable.

b) Based on various appellate decisions on identical issues / pending approval of Committee on Disputes for pursuing appeals, disputed demand of Income Tax, Penalty, Interest and Interest Tax amounting to Rs 90.91 Crore (Rs 10.66 Crore) has been shown in Schedule 12 under Contingent Liability. No provision has been considered necessary by the

Management as the matters are pending for appeal before various competent Authorities and payments/adjustment of Rs35.65 Crore (Rs 10.65 crore) has been included in Other Assets in Schedule 11.

6.2 Floating Provisions

Nil

6.3 Draw Down From Reserves

There is no draw down from Reserves.

6.4 Disclosure of Letter of Comforts

The Bank issues Letter of Comforts on behalf of its various constituents against the credit limits sanctioned to them. In the opinion of Management, no significant financial impact and cumulative financial obligations have been assessed under LOCs issued by the Bank in the past, during the current year and still outstanding. Brief details of LOCs issued by the Bank are as follows:

6.5 Provisioning Coverage Ratio

The provision coverage as on 31.03.2012 works out to 54.39 % (51.60%).

6.6 Income from Banc assurance

Bank is a Corporate Agent of Life Insurance Corporation of India for Banc assurance Life and Reliance General Insurance Company Ltd for Banc assurance Non-Life business. Details of income from Banc assurance is given below:

6.7 Reconciliation:

Reconciliation of entries outstanding has been drawn upto 31.03.2012 in case of Inter-Branch Accounts and in Inter-Bank Accounts. Elimination of entries outstanding in Inter-Bank Accounts including Reserve Bank of India, State Bank of India, NOSTRO Accounts etc. and in Inter-Branch Accounts viz. drafts, suspense, branch adjustment, clearing transactions, fund transfers, telegraphic transfers, balances pertaining to advances paid for acquisition of assets, sundry creditors etc. is in progress. In the opinion of the management, consequential effect of the above on the revenue/assets/liabilities will not be material.

6.8 Fixed Assets

a) Bank had revalued on few occasions in the past, its premises by independent qualified values and the excess of fair market value over the original cost was credited to revaluation reserve. As on date aggregate amount of revaluation reserve (net of revaluation relating to assets disposed of) is Rs 633.21 Crore (Rs 584.09 Crore) and depreciation on the revalued portion charged to the above revaluation reserve (net of depreciation relating to assets disposed of) is Rs 139.09 Crore (Rs 133.32 Crore).

b) Premises include revalued Assets with written down value of Rs 2.44 Crores (Rs 2.58 Crores ) in respect of which documentation/ registration is pending.

c) Estimated amount of contracts (net of advance) remaining to be executed on capital account and not provided for Rs 11.90 Crore (Rs 6.36 Crore)

6.9 Break up of provision held against non-performing advances into facility-wise, security-wise and sector-wise is not ascertained. The same is deducted on estimated basis from gross advances in the various categories to arrive at the balance of net advances as stated in Schedule 9 of the Balance Sheet.

6.10 The bracketed figures indicate previous year's figures. Previous year's figures have been re-grouped / re-arranged / re-casted wherever considered necessary.

Mar 31, 2011

1 Capital

1.1 Capital Adequacy Ratio

a) During the year the Bank allotted 67,300 PNCPS of Rs. 1,00,000 each on receipt of subscription aggregating to Rs. 673 Crores from Government of India. As on 31.03.2011 Government of India holds 1,82,300 PNCPS of Rs. 1,00,000 each aggregating to Rs. 1823 Crores. These PNCPS carry an annual floating coupon to be benchmarked to Repo Rate with a spread of 100 basis points to be reset annually based on the prevailing Repo rate on the relevant date. These PNCPS are part of Tier I Capital.

b) During the year, Bank received contribution of Rs. 940 Crores towards equity share capital from Government of India and allotted 7,81,57,479 equity shares of Rs. 10/- each at issue price of Rs. 120.27. Out of Rs. 940 crore, Rs. 78.16 crore is transferred to Share Capital Account and Rs. 861.84 crore towards Share Premium Account.

2.3 Non-SLR Investment Portfolio

* An amount of Rs. 9.77 crores of Central Government Non SLR Bond is included in Govt Securities in Schedule 8.

During the financial year 2010-11 there was transfer of securities from Available for Sale (AFS) to Held to Maturity (HTM) category of Rs. 3116.95 Crores. Depreciation amounting to Rs. 172.28 crores on account of such transfer has been charged to profit and loss account.

3.3 Disclosures on risk exposure in derivatives

Qualitative Disclosures

i) The Structure and organization for management of risk in derivatives trading:

The organization structure consists of Investment Wing at the Corporate level which report to the Executive Directors and Chairman & Managing Director and ultimately to the Board. Risk Management Department is informed of the transactions as and when they take place.

ii) The scope and nature of risk measurement, risk reporting and risk monitoring systems:

a) The Interest Rate Swap (IRS) transactions undertaken by the Bank are for hedging and trading purposes. Derivative as a product is also offered to the customer as per RBI norms. Such transactions are undertaken as per policies of the bank formulated based on RBI guidelines.

b)The risk is measured in the interest rate derivative transactions depending on the movement of benchmark interest rates for the remaining life of the interest rate swap contracts. All interest rate derivative transactions are included for the purpose of risk measurement. The risk is evaluated and reports are placed to the CMD/ED daily and Board periodically. Risk is monitored based on the mark to market position of the interest rate derivative transactions.

(iii) Policies for hedging and /or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/ mitigants:

IRS is undertaken on the actual interest bearing underlying assets or liabilities. The notional principal amount and maturity of the hedge does not exceed the value and maturity of underlying asset/liability. The risk is monitored on the mark to market basis of the outstanding interest rate swap contracts and accordingly the effectiveness of the hedge is determined.

Collateral required upon entering into IRS is Nil. Notional principal amount of IRS multiplied by the relevant conversion factor and the respective risk weight of the counter party has been taken into account for determining the capital requirements.

c) Other Disclosures for Interest Rate Swaps

The Bank has undertaken fixed to floating and floating to fixed interest rate swaps on underlying assets and liabilities. The loss of income on the above IRS will be Rs. 10.51 Crore (Rs. 97.68 Crore), in case counter-parties fail to fulfill their obligations. There is no concentration of credit risk arising from IRS transactions undertaken as the counter-parties are banks and the exposure is within the exposure limit permitted.

8.2 Disclosure of penalties imposed by RBI.

Reserve Bank of India has not imposed any penalty on the Bank u/s 46(4) of the Banking regulation Act, 1949

9.0. Disclosures Requirement as per Accounting Standards:

9.1 There is no material "prior period item" included in Profit & Loss account required to be disclosed as per AS Ã 5 issued by ICAI read with RBI guidelines.

9.2 Revenue Recognition

Commission earned on Letter of Credit and Guarantees issued are recognised on realization basis as per Banks accounting policy which is not in accordance with AS-9. However, the amount is insignificant.

9.3 AS - 15 ÃEmployee Benefits

Provision for Employee Benefits viz. Pension, Gratuity, Leave Encashment, Sick Leave, LFC/LTC, medical benefits to self and family members of retired Directors and Directors in service etc. has been made as per Revised Accounting Standard (AS) -15. In terms of Limited Revision to AS-15 Employee Benefits (Revised 2005) and guidelines notes thereon, the Bank has recognised the increase in transitional liability over the liability that could have been recognised as per the Pre Revised AS-15 as on 31.03.2007 as an expense over 5 years from financial year 2007-08. Accordingly, Rs. 88.68 crores (Rs. 88.68 crores) has been charged to Profit & Loss Account towards amortisation of the increase in transitional liability. The un-amortised portion of the increase in transitional liability on account of Revised AS-15 is Rs. 88.69 crore (Rs. 177.37 crore) as on 31.03.2011.

During the year, the Bank reopened the pension option for such of its employees who had not opted for the pension scheme earlier. As a result of exercise of which by 10563 number of employees, the Bank has incurred a pension liability of Rs. 507.84 crore (Rs. Nil). Further, during the year, the limit of gratuity payable to the employees of the Bank was also enhanced pursuant to the amendment to the Payment

of Gratuity Act, 1972. As a result, the gratuity liability of the Bank has increased by Rs. 292.51 crore (Rs. Nil).

In terms of the requirements of the Revised Accounting Standard (AS) 15, Employee Benefits, the entire amount of Rs. 800.35 crores (ie. Rs. 507.84 crores + Rs. 292.51 crores) is required to be charged to the Profit and Loss Account. However, Reserve Bank of India has issued a circular no. DBOD.BP.BC.80.21.04.018/ 2010-11 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits Ã Prudential Regulatory Treatment, dated 9th February 2011. In accordance with the provisions of the said circular, the Bank would amortise the amount of Rs. 800.35 over a period of five years. Accordingly, Rs. 160.07 crore (representing one-fifth of Rs. 800.35 crore) has been charged to the Profit and Loss Account. In terms of the requirements of the aforesaid RBI circular, the balance amount carried forward, i.e., Rs. 640.28 crore (Rs. 800.35 crore Ã Rs.160.07 crore) does not include any amount relating to separated / retired employees.

Had such a circular not been issued by the RBI, the profit of the Bank would have been lower by Rs. 640.28 crore pursuant to application of the requirements of Revised AS 15.

In addition to Rs. 160.07 crore (Rs. Nil), an amount of Rs. 461.84 crore (Rs. 265.06 crore), which includes full liability for the retired / separated employees towards second option for pension and liability for other employee benefits, has been charged to Profit & Loss Account towards current years liability.

Investment Details:

a) Investment with LIC of India for Gratuity Fund Ã 100%

b) Major Categories of Plan assets as percentage of Fair Value in respect of Pension Fund

9.5 Related Party Disclosures:

a) Key Management Personnel

i) Chairman and Managing Director

Shri S.K. Goel (Till 30.06.2010)

Shri Arun Kaul (From 01.09.2010)

ii) Executive Directors

Shri V.K. Dhingra (Till 30.4.2010)

Shri Ajai Kumar (From 07.12.2009)

Shri N.R. Badrinarayanan (From 01.9.2010)

b) Transactions with Key Management Personnel

c) Associates

Regional Rural Banks sponsored by the Bank are as under:

i) Jaipur Thar Gramin Bank

ii) Kalinga Gramya Bank

iii) Bihar Kshetriya Gramin Bank

iv) Mahakaushal Gramin Bank

v) Paschim Banga Gramin Bank

d) The transactions with Associates have not been disclosed in view of Para -9 of the AS-18, "Related Party Disclosure" which exempts State Controlled Enterprises from making any disclosures pertaining to their transactions with other related parties, which are also State Controlled Enterprises

9.6 . EARNINGS PER SHARE (EPS):

Basic & Diluted EPS after Extra-ordinary item: Rs. 14.29 per share

9.7 As the Bank does not have Subsidiaries or controlling interest in Associates/Joint Ventures, AS 21 relating to Consolidated Financial Statements, AS 23 relating to Accounting for Investments in Associates in Consolidated Financial Statements and AS 27 relating to Financial Reporting of Interest in Joint Ventures issued by the ICAI are not applicable to the Bank.

9.8 Taxes on Income

a) During the year net amount of Rs. 30.51 crore (Rs. 77.60 Crore) has been recognised as Deferred Tax Asset as per accounting standard AS-22. However, DTA on carried forward loss as per return to the extent of Rs. 371.27 Crore (Rs. 202.27 Crore) has gone for appeal, has not been recognised on account of prudence.

b) In accordance with the "Guidance Note on Accounting for credit available in respect of MAT under the Income Tax Act, 1961" issued by the ICAI, the MAT credit for the current year amounting to Rs. 286.10 crore (Rs.160.64 crore) has been credited to P&L Account under "Provisions and Contingencies" by debiting MAT credit entitlement Account since the management is of the opinion that the MAT credit can be set off during the specified period as per the Provisions of the Income Tax Act, 1961.

9.9 Intangible assets

Fixed Assets include computer software, which has been considered as intangible assets as per AS-26 issued by the ICAI. The movement in software asset is given below:

9.10 Impairment of Assets

In view of the absence of the indication of material impairment within the meaning of clause 5 to clause 13 of Accounting Standard-28 "Impairment of Assets", no impairment of fixed assets is required in respect of current financial year.

10.0 Additional disclosures:

10.2 Contingent Liabilities

a) Such liabilities as mentioned at Serial No. (I) of Schedule 12 of Balance Sheet are dependent upon the judgement of court, arbitration award, out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties, respectively and necessary provision is made where claim against the Bank is tenable.

b) Based on various appellate decisions on identical issues / pending approval of Committee on Disputes for pursuing appeals, disputed demand of Income Tax, Penalty, Interest and Interest Tax amounting to Rs. 10.66 crore (Rs.96.39 crore) has been shown in Schedule 12 under Contingent Liability. No provision has been considered necessary by the Management as the matters are pending for appeal before various competent Authorities and payments/adjustment of Rs. 10.65 crore (Rs. 40.65 crore) has been included in Other Assets in Schedule 11.

10.3 Floating Provisions Nil

10.4 Draw Down From Reserves

There is no draw down from Reserves.

10.7 Provisioning Coverage Ratio

The provision coverage Ratio of the Bank with reference to Gross NPA position as on 30.09.2010 is 70%. As per RBI Circular No. DBOD.No.BPBC.87/21.04.048/2010-11 dated 21.04.2011 an amount of Rs. 210.32 Crore has been kept under an account styled as counter cyclical provisioning buffer representing a surplus of provision under PCR vis a vis as required under prudential norms. The provision coverage as on 31.03.2011 works out to 51.60%

10.14 Off-balance Sheet SPVs sponsored

Bank has not sponsored any SPVs.

10.15 Agricultural Debt Waiver & Debt Relief Scheme-2008 (ADWDR- 2008)

1. Under Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS)-2008, last date of payment of 75% of the overdue amount in default by the Others Farmers has expired on 30.06.2010.

2. In terms of RBI guidelines, 7333 accounts of other farmers amounting to Rs. 141.63 crore were classified as NPA as on

30.09.2010 with 100% provision. Bank has received full reimbursement of claim of Rs. 536.33 crore against Debt Waiver and Rs. 42.46 crore against Debt Relief submitted up to the period 31.03.2010.

3. During, 01.10.2010 to 31.03.2011, the Bank has recovered Rs. 23.54 crore from 1951 Nos. of Other Farmers relating to ADWDRS-2008. With a view to recover from these NPA accounts, a special OTS scheme has been introduced by the Bank where all ADWDRS accounts declared as NPA up to 30.09.2010 will be covered. As per provision of this OTS scheme Bank has a provision for fresh lending to such Borrowers after One Time Settlement.

4. As on 31.03.2011 Bank has submitted claim duly audited by the Statutory Central Auditors as below:- a) Debt Waiver Ã Rs. 1.38 Crore against Small and Marginal Farmers b) Debt Relief Ã Rs. 9.00 Crore against 5079 Other Farmers.

10.16 Reconciliation:

Reconciliation of entries outstanding has been drawn upto 31.03.2011 in case of Inter-Branch Accounts and in Inter-Bank Accounts. Elimination of entries outstanding in Inter-Bank Accounts including Reserve Bank of India, State Bank of India, NOSTRO Accounts etc. and in Inter-Branch Accounts viz. drafts, suspense, branch adjustment, clearing transactions, fund transfers, telegraphic transfers, balances pertaining to advances paid for acquisition of assets, sundry creditors etc. is in progress. In the opinion of the management, consequential effect of the above on the revenue/assets/liabilities will not be material.

10.17 Fixed Assets

a) Bank had revalued on few occasions in the past, its premises by independent qualified valuers and the excess of fair market value over the original cost was credited to revaluation reserve. As on date aggregate amount of revaluation reserve (net of revaluation relating to assets disposed of) is Rs. 584.06 Crore (Rs. 576.80 Crore) and depreciation on the revalued portion charged to the above revaluation reserve (net of depreciation relating to assets disposed of) is Rs.149.12 Crore(Rs.173.98 crore).

b) Premises include Assets with written down value of Rs. 2.58 Crores (Rs. 2.58 Crore ) which were revalued at Rs. 23.03 Crore (Rs. 23.03 Crore) in respect of which documentation/ registration is pending.

c) Estimated amount of contracts (net of advance) remaining to be executed on capital account and not provided for Rs. 6.36 Crore (Rs. 15.22 Crore)

10.18. Break up of provision held against non-performing advances into facility-wise, security-wise and sector-wise is not ascertained. The same is deducted on estimated basis from gross advances in the various categories to arrive at the balance of net advances as stated in Schedule 9 of the Balance Sheet.

10.19. In the light of RBIs clarification dated 17th September 2010, Credit Linked Notes (CLNs) amounting to Rs. 415.10 crore has been classified under Investment Category, which were hitherto grouped under Loans and Advances resulting in Marked to Market (MTM) loss of Rs. 9.03 crore which has been provided in the Profit & loss Account for the year ended 31st March, 2011. On the same analogy, the MTM loss of Rs. 4.23 crore on Credit Default Swaps of Rs. 89.19 crore has been provided in the Profit & loss Account for the year ended 31st March, 2011.

10.20 Note on Revised Balance Sheet.

The Financial Statements were approved by the Board of Directors on 29.04.2011 proposing a dividend at the rate of Rs. 2/- per equity share. Subsequently, on receiving directives from GOI reiterating to pay a minimum dividend of 20% on equity or 20% of post tax profit whichever is higher, the Dividend on equity shares has been proposed at Rs. 3/- per share and the Financial Statements as on 31.03.2011 have been revised to include an amount of Rs. 219.52 crores towards proposed Dividend of Rs. 3/- per equity share and tax thereon which have been duly approved by the Board of Directors at its meeting held on 17.05.2011.

10.21. The bracketed figures indicate previous years figures. Previous years figures have been re-grouped / re-arranged/re-casted wherever considered necessary.

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