(1) *Total under column 3 should tally with the total of Investments included under the following categories in Schedule 8 to the balance sheet:
b) Debentures & Bonds
c) Subsidiaries/joint ventures
(2) Amounts reported under columns 4, 5, 6 and 7 above may not be mutually exclusive.
(3) PSUs under private placement includes Special State Government Securities of '''' 1178.62 Crore allotted in conversion of discom dues.
(4) The column (6) “Unrated Securities” mainly include Special State Government securities of '''' 1414.98 Crore allotted in conversion of Discom dues, Equity shares of '''' 344.39 Crore, Venture Capital '''' 20.05 Crore, mutual fund '''' 5.00 Crore, Security Receipt of '''' 367.61 Crore and DISCOM bonds of '''' 286.43 Crore.
** Excludes the investment under RIDF of '''' 3,859.99 Crore outstanding as on March 31, 2017.
v) Disclosures on risk exposure in derivatives
a) Qualitative Disclosure
Bank has put in place Board approved derivative policy for undertaking derivative transactions for hedging, trading and for catering to customer requirements as per RBI guidelines. The policy lays down the type, scope and usage with appropriate limits for derivative transactions. From the view point of operational efficiency and risk oversight the derivative desk is segregated into Front Office, Mid Office and Back office with clear segregation of functions.
xvii) Provision coverage ratio (PCR): Provision Coverage ratio as of 31.03.2017 is 58.15 % (previous year 50.08%) as per RBI guidelines. The Bank has achieved the PCR as envisaged in RBI circular DBOD. No.BP.BC.87-21.048/2010-11 dt. 21.04.2011.
xviii) Unsecured advances: : The Bank has no unsecured advances wherein intangible securities have been taken as collateral securities.
xix) During the year 2016-17 the Bank had issued 518 Letters of Comfort (LoC) amounting to USD 312450542.90 covering imports of goods into India. These Letters of Comfort have been issued after due assessment of its financial impact on the Bank and with the approval of the competent authorities. As on the date of balance sheet 193 Letters of Comfort amounting to USD 123402405.50(approximately '''' 800.26 Crore @ USD 1 = '''' 64.85) are outstanding which, in the opinion of the management, will not have any significant impact on the Bank’s financial position.
8. Compliance with information to be disclosed under Accounting Standards notified by the Ministry of
Corporate Affairs under Companies(Accounting Standards) Rules, 2006:
i) There were no material prior period income/ expenditure required to be disclosed as per AS -5.
ii) As per the past practice, the bank does not provide details for the gross amount of each class of depreciable asset as and related accumulated depreciation as required under AS-6.
iii) In terms of accounting policy No.8 of the Bank, some items are recognised on cash basis. However, the management is of the view that since the amount involved is not material, it does not require any disclosure under AS-9.
iv) The Bank is revaluing foreign currency transactions consistently at the weekly average rate of the last week of the preceding month, prescribed by FEDAI, instead of the rate at the date of the transaction as per AS 11. The management is of the view that there is no material impact on the accounts for the year.
v) The following information is disclosed under AS-15 - Employee benefits :-
Actuarial assumptions relating to provisions for compensated absence are given below :
Interest rate :- 7.50% p.a
Salary inflation:-5.50% p.a
Mortality :- LICI 1994-96
Attrition rate :- 10 per thousand p.a
Formula :- projected unit credit method
# For the purpose of segment reporting in terms of AS-17 and as prescribed in RBI guidelines, the business of the Bank has been classified into four segments i.e., a) Treasury Operations (b) Corporate/ Wholesale Banking, (c) Retail Banking and (d)Other Banking Operations. Segmenting is based on the current policy of the bank.
# Since the Bank does not have any Overseas branch, reporting under geographic segment is not applicable.
# Expenses wherever directly related to segments have been accordingly allocated to segments and wherever not directly related have been allocated on the basis of segment revenue.
# Assets/liabilities wherever directly related to segments have been accordingly allocated to segments and wherever not directly related have been allocated on the basis of segment revenue/segments assets ratio.
The above information has been compiled based on data available at Head Office.
viii) The Bank has identified the following as related party as per AS-18 on Related Party Disclosures -
a) Key Management Personnel :
a. Dr. Kishore Sansi, (M.D & CEO)
b. Shri. B. S. Rama Rao, (Executive Director)
c. Shri. Y Nageswara Rao (Executive Director)
The transactions with Related parties during the year are as under:
b) There has been no transaction with the relatives of the Key Management Personnel during the year.
c) Associates: NIL
ix) Leases (AS -19)
a) Lease rent paid for operating leases are recognized as an expense in the Profit & Loss Account in the year to which it relates.
b) Future Lease Rent Payable for operating lease :
c) Future lease rents and escalation in the rent are determined on the basis of agreed terms.
d) At the expiry of initial lease term, generally the Bank has an option to extend the lease for a further pre-determined period.
e) The Bank does not have any financial lease.
x) Earning Per Share (AS-20)
The Bank reports basic earnings per equity share in accordance with Accounting Standard 20 on “Earnings per Share”. Basic earnings per share for the period is computed by dividing net profit after tax by the weighted average number of equity shares outstanding during the year.
11. Intra Group Exposure: -
a) Total Amount of Intra group Exposures: NIL
b) Total amount of top-20 intra group exposures: NIL
c) Percentage of intra group exposures to total exposure of the bank on borrowers/customers: NIL
d) Details of breach of limits on intra-group exposures and regulatory action thereon, if any: NIL
12. Transfers to Depositor Education and awareness Fund (DEAF): -
(b) Qualitative disclosures around LCR:
(a) The main drivers of their LCR results and the evolution of the contribution of inputs to the LCR’s calculation over time;
The main drivers of the LCR is HQLA, the involvement of healthy HQLA not only improve the LCR percentage but also increase the ability of the bank to meet the liquidity requirement upto 30 days.
(b) Intra-period changes as well as changes over time;
(c) The composition of HQLA;
The composition of HQLA is divided into Level 1 Asset and Level 2A & Level 2B.
Level 1 Asset includes:
i. Cash including cash reserves in excess of required CRR.
ii. Government securities in excess of the minimum Statutory Liquidity Ratio(SLR) requirement.
iii. Within the mandatory Statutory Liquidity Ratio(SLR) requirement, Government securities to the extent allowed by Reserve Bank of India (RBI), under Marginal Standing Facility (MSF).
iv. Marketable securities issued or guaranteed by foreign sovereigns satisfying all the following conditions:-
(a) Assigned a 0% risk weight under the Basel II standardized approach for credit risk;
(b) Traded in large, deep and active repo or cash markets characterised by a low level of concentration; and proven record as a reliable source of liquidity in the markets (repo or sale) even during stressed market conditions.
(c) Not issued by a bank/financial institution/NBFC or any of its affiliated entities.
Level 2 assets (comprising Level 2A assets and Level 2B assets) can be included in the stock of liquid assets, subject to the requirement that they comprise no more than 40% of the overall stock of HQLAs after haircuts have been applied.
Level 2A and Level 2B assets would comprise of the following:
Level 2A Assets includes;
A minimum 15% haircut should be applied to the current market value of each Level 2A asset held in the stock. Level 2A assets are limited to the following:
1) Marketable securities representing claims on or claims guaranteed by sovereigns, Public Sector Entities (PSEs) or multilateral development banks that are assigned a 20% risk weight under the Basel II Standardised Approach for credit risk and provided that they are not issued by a bank/ financial institution/NBFC or any of its affiliated entities.
2) Corporate bonds, not issued by a bank/financial institution/NBFC or any of its affiliated entities, which have been rated AA- or above by an Eligible Credit Rating Agency.
3) Commercial Papers not issued by a bank/ Primary dealers (PD)/financial institution or any of its affiliated entities, which have a short-term rating equivalent to the long-term rating of AA- or above by an Eligible Credit Rating Agency.
Level 2B Assets includes:
A minimum 50% haircut should be applied to the current market value of each Level 2B asset held in the stock. Further, Level 2B assets should comprise no more than 15% of the total stock of HQLA. They must also be included within the overall Level 2 assets. Level 2B assets are limited to the following:
i. Marketable securities representing claims on or claims guaranteed by sovereigns having risk weights higher than 20% but not higher than 50%, i.e., they should have a credit rating not lower than BBB- as per RBI Master Circular on ‘Basel III - Capital Regulations’.
ii. Common Equity Shares which satisfy all of the following conditions:
a) not issued by a bank/financial institution/NBFC or any of its affiliated entities;
b) included in NSE CNX Nifty index and/or S&P BSE Sensex index.
c) Concentration of funding sources;
Amount to be received by RBI / Central banks.
(e) Derivative exposures and potential collateral calls;
(f) Currency mismatch in the LCR;
(g) A description of the degree of centralization of liquidity management and interaction between the group’s units; and
The Fund Management desk in Treasury Management Department (TMD) is centralized liquidity management desk that manages the flow of funds between the two units.
(h) Other inflows and outflows in the LCR calculation that are not captured in the LCR common template but which the institution considers to be relevant for its liquidity profile.
16. The bank has drawn down a sum of Rs, NIL/- (Previous year Rs, NIL) from General Reserve on account of payment of Lapsed Demand Drafts which were taken to general reserve earlier as per RBI approval.
17. Bank is not having adequate information in respect of Suppliers/Service providers covered under Micro, Small and Medium Enterprises Development Act, 2006. In view of this, information required to be disclosed u/s 22 of the said Act is not given.
18. Implementation of INDAS:
The Bank is in the process of implementation of IND AS. The Bank is also availing services of external consultants for this purpose. Proforma financial statements for the half year ended Sep’16 have been compiled and submitted to RBI. The Bank is confident of complying with the timelines prescribed by RBI for implementation of INDAS.
19. Previous year’s figures have been re-grouped / re-classified / re-cast wherever necessary to conform to current year’s classification.
20. Cash flow has been prepared using Indirect method.