1. Capital:

Paid up Equity Share Capital of the Bank as on 31.03.2016 is Rs. 1689.71
crore increased from Rs. 1658.27 crore of previous year by issue of fresh
31441088 equity shares of Rs. 10 each for Rs. 31.44 crore at a premium of
Rs.42.66 per share on 31st March,2016 allotted to LIC of India on
preferential basis. Bank has also received Rs. 535.00 Crore from
Government of India on 31.03.2016 towards Share Capital. Pending
allotment of shares there-against, the amount is shown under Share
Application Money pending allotment.

2. Balancing of Books / Reconciliation:

The reconciliation of the following items are in progress : ? Inter
Branch Office Balance

? Inter Bank Accounts

? System Suspense Account

? Suspense Accounts

? Clearing & other Adjustment Accounts

? Certain balances in nominal account

? NOSTRO Accounts

? Balances related to ATM

? Mirror Accounts maintained by Central Card Department

The management is of the opinion that the overall impact, if any, on
the accounts will not be significant.

3. Income Tax:

3.1 Provision for Income Tax for the year is arrived at after due
consideration of relevant statutory provisions and judicial decisions
on disputed issues.

3.2 Other Assets [Schedule 11 (ii)] includes Rs. 2472.23 crore (previous
year Rs. 1813.41 crore) towards disputed Income Tax paid by the Bank or
adjusted by the Income Tax department. Provision for disputed amount of
taxation is not considered necessary by the Bank on the basis of
various judicial pronouncements and favourable decisions in Bank''''s own

4. Premises:

4.1 Premises owned by the Bank include properties costing Rs. Nil
(previous year Rs. 32.06 crore) for which registration formalities are
still in progress.

4.2 The premises of the Bank were revalued to reflect the market value
as on 31.03.2016 based on the reports of external independent values
and approved by the Board of Directors and Rs. 1586.15 crore being the
net increase in value thereof have been credited to Revaluation Reserve

4.3 Depreciation on the revalued amount of premises has been charged to
the Proft and Loss Account as against the earlier practice of charging
the same to Revaluation Reserve. Corresponding amount has however been
adjusted from Revaluation Reserve and credited to Revenue and Other
Reserve. Consequently, the charge on account of Depreciation, the Loss
for the year and Revenue and Other Reserve is higher by Rs. 24.30 crores.

5. Advances / Provisions

5.1 Advances to units which have become sick including those under
nursing/ rehabilitation/ restructuring programme and other advances
classified as doubtful/ loss assets have been considered secured/
recoverable to the extent of estimated realizable value of securities
carrying first or second charge based on valuers'''' assessment of
properties/ assets mortgaged to the Bank and other data available with
the Bank.

5.2 In accordance with the guidelines issued by Reserve Bank of India,
the Bank has netted the balance Floating Provision amount of Rs. 100.56
crores (previous year Rs. 100.56 crore) and Countercyclical Provision
amount of Rs. 47.34 Crore (previous year. Rs. 47.34 Crore) from gross
NPAs to arrive at net NPAs.

5.3 (I) In order to provide assistance to Power Distribution Companies
(DISCOMS), pursuant to UDAY ( Ujwal

Discom Assurance Yojana ) scheme, the Bank has subscribed to Non SLR
SDL bonds of Rs. 9232 crore issued by respective State Governments and
State Government Guaranteed DISCOMS Bonds of Rs. 2538 crores against
settlement of outstanding dues of DISCOMS as on 30th September 2015. In
terms of RBI letter No. DBR.BP.NO. 11657/21.04.132/2015-16 dated 17th
March 2016 read with further clarification dated 21st April 2016 and
11th May, 2016:

a. Provision of Rs. 525.90 crores in respect of segment of loan/bonds of
Rs. 3506.08 crores not envisaged to be converted into SDL Bonds has been

b. No provision has been made for the segment of loan of Rs. 668.31
crores envisaged to be converted into SDL Bonds.

c. Provision of Rs. 74.51 crores has been made for diminution in fair
value of loan.

d. There was no diminution in value of the DISCOM and SDL bonds on
mark to market basis as at 31st March 2016 and as such no provision has
been considered necessary

(II) In respect of DISCOM loans of Rs. 1591.73 crore (including Rs. 1021.11
crores where MOU has been signed by the Punjab State Government, DISCOM &
Ministry of Power), though the respective State Government has
participated in the UDAY scheme, the same remains to be implemented by
the Bank as on 31st March 2016. Accordingly, loans have been classified
and treated as per usual IRAC norms. Adjustments required pursuant to
the UDAY scheme with respect to these loans will be ascertained and
given effect to on implementation thereof.

5.4 In compliance with the RBI letter No.
DRB.NO.13018/21.04.048/2015-16 dated 12th April, 2016 as referred in
the letter dated 16th April 2016 received from State Bank of India
(SBI) (Consortium Leader) pending regularization of Food Credit (FC)
account availed by Government of Punjab (GOP) and resolution of other
related issues, provision of 15% amounting to Rs. 191.22 Crore has been
made in respect of outstanding balance of Rs. 1274.80 Crore ( as advised
by SBI) availed under FC by GOP.

5.5 Pursuant to Asset Quality Review (AQR) under section 35 of Banking
Regulation Act, 1949 carried out by RBI, classification of advances
referred to in the said review and consequential additional provision
of Rs. 1727.12 crore as required thereof has been done and given effect
to in these financial statements.

* Includes capital funds of Rs..535.00 crore received from Government of
India on 30.03.2016 and the same has been kept in the newly opened Bank
account namely, " Central Bank of India Share Application Money
Account". Bank vide its letter dated 28th March 2016 sought approval of
Reserve Bank of India (RBI) to treat the said Capital Funds as part of
Common Equity Tier1 (CET 1) Capital for the financial year ended 31st
March 2016 pending allotment of equity shares to Government of India,
which was granted by RBI vide its letter dated April 06, 2016.

** Includes Rs. 1617.00 crore raised by conversion of entire Perpetual
Non?cumulative Preference Shares( PNCPS) held by Government of India
(GOI) into 15,38,68,113 equity shares at a conversion price of Rs. 105.09
( including premium of Rs. 95.09) and allotted to GOI on 24th March 2015.

The above data has been compiled on the basis of guidelines of Reserve
Bank of India and estimates in respect of certain Off Balance Sheet
items, made by the Management and relied upon by the Auditors.


In terms of RBI''''s Master Circular on Classification, Valuation and
Operation of Investment portfolio dated 1st July 2015, the depreciation
on the instruments acquired by way of conversion of outstanding
advances has not been offset against the appreciation in any other
securities held under the AFS category. This has resulted in increase
in provision by Rs. 229.83 crores for the year.

(iii) Qualitative Disclosures

Risk Management Policy approved by the Board of Directors for the use
of derivative instruments to hedge/trade is in place.

Policy for Forward Rate Agreement, Interest Rate Swaps, Currency
Futures and Interest Rate Futures for Hedging the Interest Rate Risk in
the Investment Portfolio and also for Market Making is in place.

The risk management policies and major control limits like stop loss
limits, counter party exposure limits etc. as approved by the Board of
Directors are in place. The risks are monitored and reviewed regularly.
MIS reports are submitted periodically to Risk Management Committee.

Hedge Positions

Accrual on account of interest expenses/income on the IRS are accounted
and recognized as income/expense.

If the swap is terminated before maturity, the Mark to Market (MTM)
loss/gain and accrual till such date are accounted as expense/income
under interest paid/received on IRS.

Trading positions

Currency future and Interest Rate Future are marked to market on daily
basis as per exchange guidelines of MCX-SX, NSE and United Stock

MTM profit/loss is accounted by credit/debit to the margin account on
daily basis and the same is accounted in bank''''s profit & loss account on
final settlement.

Trading swaps are marked to market at frequent intervals. Any MTM
losses are booked and gains if any are ignored.

Gains or losses on termination of swaps are recorded as immediate
income/expense under the above head

(i) Inclusive of opening FITL of Rs. 384 crore which was deducted last

(ii) After netting Rs. 185.71 crores (Previous year Rs. 124.78 crore) held
in nominal towards amount received from ECGC and Court Borrowers
pending adjustment.

(iii) Excluding floating provision of Rs. 100.56 crore (previous year Rs.
100.56crore) & Countercyclical provision of Rs. 47.34crore (previous year
Rs. 47.34 crore).

As the Bank''''s exposure for the year in respect of Foreign Exchange
Transaction is less than 1% of total assets of the Bank, no provision
is considered necessary.

(iv) Details of Single borrower limit/Group Borrowers Limit exceeded by
the Bank for which necessary Board approval has been obtained.

a. Single Borrower Limit exceeded by Bank : NIL

b. Group Borrower Limit exceeded by Bank : NIL

(v) Statement of Loans and Advances secured by Intangible Assets viz.,
Rights, Licenses, Authorizations etc. which is shown as unsecured in

Advances amounting to Rs. Nil (previous year Rs. Nil) against charge over
intangible security such as Rights, Licences, Authorization etc. are
considered as unsecured.

The value of intangible security is Rs. Nil (previous year Rs. Nil)

6. Disclosure of penalties imposed by RBI

RBI has imposed a penalty of Rs. 2.16 crore( previous year Rs. 4.92 crore)
in terms of Section 47A(1)(a) read with Section 46(4)(i) of the Banking
Regulation Act 1949 for non-compliance of RBI norms.

7. The following information is disclosed in terms of Accounting
Standards issued by The Institute of Chartered Accountants of India:

a) Accounting Standard - 5

i. Change in Accounting Policy:

There is no change in the accounting policy of the Bank during the year
except in case of charging of depreciation on assets which have been
revalued as stated in Note 4.3.

ii. Prior Period Items:

Provision of Rs. 300.52 crore relating to earlier years based on the
actuarial valuation report pertaining to Employee Benefit (Pension

b) Accounting Standard - 9

Certain items of income are recognized on realization basis as per
significant accounting policy No. 8. However, the said income is not
considered to be material.

c) Accounting Standard - 15 (Revised)

In the year 2010-11, in accordance with circular No. DBOD No.
BP.BC.80/21.04.018/2010-11, dated 09-02- 2011 issued by Reserve Bank of
India, the Bank had opted to amortize the additional liability on
account of re-opening of Pension option for existing employees who had
not opted for pension earlier, as well as the liability on enhancement
in Gratuity limit, over a period of five years beginning with the
financial year ended 31st March, 2011. Accordingly, out of the
unamortized amount of Rs. 295.38 crore as on 1st April, 2014, the Bank
had fully amortized Rs. 239.98 crore for Pension and Rs. 55.40 crore for
Gratuity being the balance amount during the year ended March 31, 2015.

Additional provision of Rs. 300.52 crores has been made for Pension Fund
during the year.

d) Accounting Standard 17 ? Segment Reporting

i) As per the revised guidelines of Reserve Bank of India, the Bank has
recognised Treasury Operations, Corporate/ Wholesale Banking, Retail
Banking and other Banking business as primary reporting segments. There
are no secondary reporting segments.

* Segment Revenue and Expenses have been apportioned on the basis of
the segment assets, wherever direct allocation is not possible. Figures
have been regrouped wherever considered necessary to conform to current
year classification.

ii) Treasury Operations include dealing in Government and Other
Securities, Money Market operations and Forex operations.

iii) The Retail Banking Segment consists of all exposures up to a limit
of Rs. 5 crore (including Fund Based and Non Fund Based exposures)
subject to orientation, product, granularity criteria and individual

iv) The Corporate/ Wholesale Segment consist of all advances to Trusts/
Partnership Firms, Companies and statutory bodies, which are not
included under Retail Banking.

v) The other Banking Segment includes all other Banking operations not
covered under the above three categories.

vi) General Banking operations are the main resource mobilizing unit
and Treasury Segment compensates the former for funds lent to it by
taking into consideration the average funds used.

e) Related Party disclosures as per Accounting Standard 18 ? Related

1. List of Related Parties:

(a) Key Managerial Personal

Name Designation

i) Mr. Rajeev Rishi Chairman & Managing Director

ii) Mr. R.K. Goyal Executive Director

iii) Mr. B.K. Divakara Executive Director

iv) Dr. R.C. Lodha Executive Director

(b) Subsidiaries

(I) Cent Bank Home Finance Ltd.

(II) Cent Bank Financial & Custodial Services Ltd.

(c) Associates

(I) Regional Rural Banks ?

i) Central Madhya Pradesh Gramin Bank

ii) Uttar Bihar Gramin Bank, Muzzaffarpur

iii) Uttarbanga Kshetriya Gramin Bank, Cooch Behar

(II) Indo ? Zambia Bank Ltd.

h) Accounting Standard ? 28 ? Impairment of Assets

A substantial portion of Bank''''s assets comprise financial assets to
which Accounting Standard-28 on impairment of assets is not applicable.
In the opinion of the Management, there is no material impairment on
Other Assets other than financial assets as at March 31, 2016, requiring
recognition in terms of the Standard.

8. Provisioning Coverage Ratio (PCR)

The PCR (ratio of Provisioning to Gross NPA) stood at 51.52 % (Previous
Year 55.16%)

15. As per the information complied by the Management , the Vendors,
whose services are utilized and from whom purchases were made by the
Bank, are not registered under Micro, Small and Medium Enterprises
Development Act 2006. This is relied upon by the Auditors.

9. Credit Default Swaps

Bank has not taken any position in Corporate Default Swap in the
financial year 2015-16.

10. Implementation of the Guidelines on Information Security,
Electronic Banking, Technology Risk Management and Cyber Frauds

The bank has formulated policies on Cyber Frauds in CBS system as per
RBI circular RBI/2010-11/494 DBS.CO.ITC. BC.No.6/31.02.008/2010-11
dated April 29, 2011. These policies are being reviewed by the
management of the bank on periodical basis.

11. Previous year figures have been re-grouped / re-classified wherever
considered necessary to confirm to current year''''s classification.

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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