Notes to Accounts of United Bank of India [Amalgamated]

Mar 31, 2019

As a Capital planning measure, during FY 2018-19, the Bank has raised the following Capital:

a) During Q2 of the current FY, Bank had issued and allotted 2,92,02,589 new Equity Shares of Face Value of Rs.10/- each at an issue price of Rs.10.55/- per share to the eligible employees of the Bank under United Bank of India - Employee Share Purchase Scheme, 2018, thereby raising Equity Capital of Rs.30.81 crore including share premium of Rs.1.61 crores.

b) During Q3 and Q4 of the FY 2019, Bank had received an amount of Rs.4998 crore from Government of India in two tranches towards capital infusion.

a. Bank had received Rs.2159 crore on 31.12.2018 towards contribution of the Central Government in the preferential allotment of equity shares of the Bank, as Government’s investment. On 11.02.2019, Bank had allotted 1,81,73,40,067 equity shares of Rs.10/- each at a price of Rs.11.88/- per share to the President of India on behalf of Central Government including share premium of Rs.341.66 crores.

b. Bank had received Rs.2839 crore on 26.02.2019 to issue equity shares by way of preferential allotment to Government of India. On 29.03.2019, Bank had allotted 2,57,38,89,392 equity shares of Rs.10/- each at a price of Rs.11.03/- per share to the President of India acting on behalf of Central Government including share premium of Rs.265.11 crores.

RBI vide its circular DBR.No.BP.BC.102/21.04.048/2017-18 dated April 2, 2018 and DBR.No. BP.BC.113/21.04.048/2017-18 dated June 15, 2018 has permitted Banks to spread provisioning for Mark to Market (MTM) losses on investment held in AFS & HFT for the quarter ended December 31, 2017, March 31, 2018 and June 30, 2018. The loss can be spread over four quarters commencing from the quarter in which loss has been incurred. The staggered provision as on September 30, 2018 amounting to Rs.159.67 crores (Rs.90.59 crores & Rs.69.08 crores for the quarter ending December 31, 2018 & March 31, 2019 respectively) has been fully provided during the quarter ended 31st December, 2018 and there is no further staggered provision.

1. Sale and Transfers to/from Held to Maturity (HTM) category

1. Sale of Central Government Security & State Development Loan from HTM category during the FY 2018-19 was NIL.

2. Central Government Securities having face value of Rs.1299.14 crores (Book value Rs.1316.23 crores) was transferred from AFS to HTM on 06.04.2018.

3. State Development Loan Securities having Face Value of Rs.3458.65 crores (Book Value Rs.3492.92 crores) was transferred from AFS to HTM Category and State Development Loan having Face Value of Rs.4966.30 crores (Book Value Rs.4993.26 crores) was transferred from HTM to AFS category on 06.04.2018.

4. Venture Capital Securities having Face Value of Rs.0.03 crores (Book Value Rs.5.23 crores) were transferred from HTM to AFS Category.

2. Transactions involving Foreign Exchange

Monetary Assets and liabilities, excluding outstanding Forward Exchange Contracts in each currency, except currency of Bangladesh (BDT 23,00,131.26 equivalent INR 18.40 lacs) which is valued at notional value due to non availability of spot rates, are revalued at the balance Sheet date at closing spot rates announced by the Foreign Exchange Dealers Association of India (FEDAI).

2.2 Disclosures on risk exposure in derivatives

A) Qualitative Disclosures

a) The Bank has not undertaken derivative transactions in currency futures for trading (arbitrage) & hedging purposes.

b) Risk management of derivative transactions has been segregated into three functional areas namely,

i) Front-Office for undertaking transaction;

ii) Mid-Office for risk management and reporting; and

iii) Back-Office for settlement, reconciliation and accounting.

c) The risk measurement, reporting and monitoring function is undertaken by the mid-office. The Board of Directors is the apex body to oversee the overall risk measurement, monitoring and reporting functions of the Bank including derivative transactions through Risk Management Committee of the Board (RMCBOD). The bank also internally monitors risk management through in-house Risk Management Committee, Asset Liability Committee (ALCO), Operational Risk Management Committee (ORMC) and Internal Committee on Investment (ICI).

d) Identification of underlying hedge items for hedging / mitigating credit risk, operational risk and market risk arising out of derivative transactions is done in accordance with the Board approved Integrated Treasury Policy. The customer related derivative transactions are covered with counter party banks, on back to back basis for identical amounts and tenure and the bank does not carry market risk for such transactions.

e) The Integrated Treasury Policy prescribes accounting for hedge and non-hedge transactions, income recognition and valuation procedure for outstanding contracts. The income recognition is done as per AS-11 on “The Effects of changes in Foreign exchange Rates” and the guidelines issued by RBI / FEDAI from time to time. The integrated Treasury Policy also prescribes various limits such as Client Level Limits, Trading Member Level Limits, Net Open Position Limits for credit risk mitigation.

2.3 In compliance with RBI directives on the Assets Quality Review (AQR) for their classification over the six quarters ending March 31, 2017, the Bank had made the classification of Advances and provisioning as per directives of RBI and IRAC norms as on 31.03.2017. The effect of AQR has fully provided till 31.03.2017.

2.4. Bank has maintained a provision of Rs.16.03 crores towards exposure on Food Credit availed by State Government of Punjab having outstanding amount of Rs.320.50 crores as on 31.03.2019 i.e. 5% on outstanding balance as on 31.03.2019.

2.5 Risk category-wise country Exposure

The Bank has analyzed its risk exposure to various countries as on 31st March, 2019 and such exposure is less than the threshold limit of 1% of the total assets of the Bank. In terms of RBI guidelines, no provision is required for this exposure.

2.6 Penalty Imposed by RBI

During the financial year 2018-19, RBI imposed penalty of Rs.3.00 crores on United Bank of India under Section 46(4) of Banking Regulation Act 1949.

3. Disclosures as per Accounting Standards (AS) in terms of RBI guidelines:

3.1 AS-5 Net Profit or Loss for the period, prior period items and changes in the Accounting Policies

There is no change in accounting policy during the year. The impact of prior period items is immaterial in the opinion of the management.

3.2 AS-9 Revenue Recognition

Revenue is recognized as per the Accounting Policies disclosed in Schedule 17.

3.3 AS-10 Accounting for Fixed Assets

3.3.1 Accounting for Fixed Assets is done as per the Accounting Policies disclosed in Schedule 17.

3.4 AS-12 Government Grants

During the year Rs.NIL crores has been received in the form of subsidies/grants/incentives from RBI and State Government as below:

3.6 AS-17 Segment Reporting

The Banks operations are classified into two primary business segments viz. “Treasury Operations” and “Banking Operations”. The relevant information is given hereunder in the prescribed format:

3.7 Leases (AS-19) (As compiled by the Management)

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: (As compiled and certified by Management)

i) Future lease rents and escalation in the rent are determined on the basis of agreed terms.

ii) At the expiry of the initial lease term, generally the bank has an option to extend the lease for a further pre-determined period.

3.8 AS-21 consolidated Financial Statements/AS-23-Accounting for Investments in Associates in consolidated Financial Statements

The Bank does not have any subsidiary and as such, AS-21 and AS-23 are not applicable.

(c) The Bank has recognised net Deferred Tax Assets of Rs.2233.70 crores during the year 2018-19 on account of timing differences in accordance with Accounting Standard- 22 on “Taxes on Income” issued by the Institute of Chartered Accountants of India and the guidelines issued by the Reserve Bank of India.

3.9 AS-28 Impairment of Assets

In the opinion of the Bank, there is no indication of any material impairment of fixed assets and consequently no provision is required.

3.10 AS 29 - Provisions, contingent liabilities and contingent Assets

Movements in significant Provisions and Contingent Liabilities have been disclosed at the appropriate places in the Notes forming part of the accounts.

3.11 Strategy for Ind AS implementation and its progress

The strategy adopted by Bank for Ind AS implementation vis-a-vis the progress made by the Bank is given below:

As per the RBI guideline, the Bank is in the process of implementing the Indian Accounting Standards (Ind AS). A Steering Committee has been formed to take the required steps on a continuous basis for smooth convergence. The Bank has appointed M/s. Deloitte Haskins & Sells, LLP as the consultant for assisting the bank in smooth implementation of Indian Accounting Standards. The pro-forma financial statement for the quarter ended 31.12.2018 has been submitted to RBI within the prescribed due date. In order to facilitate smooth transition to Ind AS, after receipt of final guidelines from RBI, Bank shall identify the changes required to be made in the IT system and other policies to comply with Ind AS. Bank is also in the process of developing Expected Credit Loss (ECL) Model in line with the requirements of IND AS 109.

4.1 Disclosure of letter of comforts (Locs) issued by the Bank

a) During the current financial year ended 31.03.2019, the Bank has issued NIL (previous year 451) Letter of Comforts/Letter of Undertakings amounting to Rs.NIL (previous year Rs.1540.86 crores).

b) There are 9 nos (previous year 186) of outstanding Letter of Comforts as on 31.03.2019 amounting to Rs.75.25 crores (previous year Rs.487.37 crores).

4.2. Provision coverage Ratio (PcR)

The provision coverage ratio (PCR) for the Bank as on 31st March 2019 is 72.94%.

4.3 Unamortized Pension and Gratuity Liabilities

RBI vide its communication DBR No. BP.BC.9730/21.04.018/2017-18 dated April 27, 2018 has given the option to Banks to spread additional liability on account of the enhancement in gratuity limits from Rs.10 lakhs to Rs.20 lakhs from March 29, 2018 under Payment of Gratuity Act, 1972, over four quarters beginning with the quarter ended March 31, 2018. The Bank has exercised the option and has fully provided Rs.140.36 crores by 31st December, 2018.

The bank does not have any Unamortized Pension and Gratuity Liabilities (Previous year unamortized Gratuity liability was Rs.105.25 crores).

4.4 credit Default Swaps

The Bank has not undertaken any Credit Default Swaps in the year 2018-19 as well as in the year 2017-18.

4.5 Qualitative Disclosure around LcR

The Liquidity Coverage Ratio (LCR) standard aims to ensure that a Bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario specified by supervisor. Bank has implemented and is computing LCR since 1st January, 2015.

LCR is calculated as a ratio of HQLA to net cash outflow under stress scenario over the next 30 calendar days.

As per RBI guideline, Bank is required to maintain minimum 100% LCR as on 31.03.2019.

LCR of the Bank is assessed at 237.92 % for the quarter ended on 31.03.2019 which is well above the minimum requirement as prescribed by Reserve Bank of India.

4.6 a) Registration formalities are pending in case of one property consisting of Rs.1.65 Crores, WDV as on 31.03.2019: Rs.0.96 Crores (Previous Year Rs.1.39 Crores).

b) Premises include leased properties amounting to Rs.136.10 Crores (net of amortization) as at 31st March 2019 (Previous Year Rs.167.71 Crores).

5. Based on information available with the bank, there are few suppliers/services who are registered as Micro Small or Medium Enterprise under the Micro Small and Medium Enterprise development act 2006 (MSMED ACT, 2006) information in respect of micro and small enterprises as required by MSMED.

6. Pending settlement of the Bipartite agreement on wage revision (due from November, 2017), an adhoc amount of Rs.52 crores has been provided during the current quarter towards wage revision and cumulative provision held as on March 31, 2019 for wage revision is Rs.153 crores.

7. During the year Bank has reported 81 numbers of fraud cases involving total amount of Rs.427.95 crores against which Bank has some existing provision. A further provision of Rs.253.50 crores has been made during the year, out of which Rs.1.90 crores is for non advance related frauds and Rs.251.60 crores is for advance related frauds. No amount is required against unamortised provision except under noted account.

Further, in view of fraud reported by certain banks in respect of Frost International Limited, the Bank has declared the account as fraud involving a total funded exposure of Rs.185.06 crores, out of which Rs.46.26 crore has been provided on 31.03.2019 being 25% of funded exposure. The quantum of unamortised provision of Rs.138.80 crores being 75% of the funded exposure has been debited from Revenue & Other Reserve and will be provided in next three quarters.

8. In terms of RBI communication DBR NO. BP. BC. 1924/21.04.048/2017-18 dated August 28, 2017, Rs.423.90 crores has been additionally provided in respect of eligible NCLT (List 1 & List 2) accounts as on 31st March, 2019. Total actual provision made as on 31st March 2019 for NCLT (List 1 & List 2) accounts is Rs.3205.40 crores instead of Rs.2781.50 crores as per IRAC norms.

9. RBI vide circular no. DBR.No.BP.BC.108/21.04/018/2017-18 dated June 6, 2018 permitted Banks to continue the exposures to MSME borrowers to be classified as standard assets where the dues between September 1, 2017 and December 31, 2018 are paid not later than 180 days from their respective original due dates. Accordingly, the Bank has retained MSME exposure of Rs.195.11 crores as standard asset as on March 31, 2019. In accordance with the provisions of the circular, the Bank has not recognised interest income of Rs.2.49 crores and is maintaining a standard asset provision of Rs.9.76 crores as on March 31, 2019 in respect of such borrowers. In addition to above, subsequent to RBI Circular DBR No. BP. BC. 18/21.04.048/2018-19 dated January 01, 2019, the Bank has restructured without downgrading the following accounts as per extant instruction:

10. The Bank has exercised call option on Additional Tier-1 Bonds on 11.04.2018 and accordingly redeemed Additional Tier-1 Bonds at par aggregating Rs.940 crores.

11. Based on the available financial statements and the declaration from borrowers, the Bank has estimated the liability towards Unhedged Foreign Currency Exposure to their constituents in terms of RBI Circular DBOD No.BP.BC.85/21.06.200/2013-14 dated January 15, 2014 and holds a provision of Rs.0.05 crores as on 31st March, 2019.

13. Previous Year’s figures have been regrouped/rearranged wherever considered necessary to make them comparable with those of the current year.

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Mar 31, 2018

As a Capital Planning measure, during FY 2017-18, the Bank has raised the folio wing Capital:

a) Bank had received amount of Rs.2634 crore from Government of lndia on 29.03.2018 towards capital infusion under the PSBs recapitalization plan. As on 31.03.2018, Bank has altotted Rs.2620.36 crore by way of preferential allotment to Government of lndia. The balance of Rs. 13.64 crore is lying in the “Share Application Money pending altotment” as on 31.03.2018. Bank has considered the same amount as part of Common Equity Tier l (CF.T-1) capital fund as on 31.03.2018.

b) Bank raised Additional Tier 1( ATI) capital of Rs.590 crore in two iranchcsi.cRs.490 crore on 10.11 2017 and Rs 100 crore on 27.12.2017 through issuance of Basel-Ill complied ATI Bonds.

c) Bank also raised Tier 2 capital of Rs.990 crore in three tranches i.e Rs.500 crore on 23.08.2017, Rs. 150 crorc on 27.09.2017 and R s.340 crore on 10.11.2017 through issuance of Basel-Ill complied Tier-2 Bonds

RBI vide its circular DBR No. BR BC. 102/21 .n4.0l 8/2017-18 dated April (12.201ft i: run led Banks the option to spread provisioning for Mark to Market (MTM) Losses on investments held in AFS and HFT for the quarters ended December 31, 2017 and Mareh 31, 201H. The provisioning for each of these quarters may he spread equally over up to four quarters commencing with the quarter in which the Loss is incurred. Accordingly, the Bank has spread 50% MTM Losses for December 2017 quarter and 75% MTM Losses for Mareh 2018 quarter amounting to Rs. 115.43 eroivs and Rs. 105.95 erores respectively.

1.1.1 Sale and Transfers to/from Held to Maturity (HTM) Category

1. Central Government Securities having face value of Rs. 1055.00 crores (Book value Rs.l050.36 crores) & Stale Development Loan having face value of Rs.75.00 Crores (Book Value Rs.74.57 crores) was sold from HTM category during the FY2017-18. Surplus earned on sale of securities from 11TM category for Central Government Securities & Slate Development Loan was Rs.02.27 crores and Rs.7.65 crores respectively.

2. Central! Government Securities having face value of Rs.9071.63 crores (Book value Rs 9269.26 crores) was transferred from HTM to AFS Category and Central Government Securities having Face Value of Rs.2554.31 crores (Book Value Rs.2785.64 Crores) was transferred from AFS to HTM Category during the first quarter of FY 2017-18.

3. State Development Loan Securities having Face Value of Rs.2645.27 Crores (Book Value Rs.2 684.62 Crores) was transferred from AFS to HTM Category during the first quarter of FY 2017-18.

4. Venture Capital Securities having Face Value of Rs.0.08 Crores (Book Value Rs.9.64 Crores) were transferred from HTM to AFS Category.

1.1.2 Transactions involving Foreign Exchange

Monetary Assets and liabilities, excluding outstanding Forward Kx change Contracts in each currency, except currency of Bangladesh (BDT 23,01,281 26 equivalent INR 15 78 lacs) which is valued at notional value due to non availability of spot rales, are revalued at the balance Sheet dale at ctosing spot rates announced by The Foreign Exchange Dealers Association of lndia (FEDAI).

1.1.3 Disclosures on risk exposure in derivatives

A) Qualitative Disclosures

a) The Bank has undertaken derivative transactions in currency futures for trading (arbitrage) & hedging purposes

b) Risk management of derivative transactions has been segregated into three functional areas namely,

i) Front-Office tor undertaking transact ion;

ii) Mid-Office for risk management and reporting. and

iii) Back-Office for settlement, reconciliation and accounting.

C) The risk measurement, reporting and monitoring function is undertaken by the mid-office. The Board of Directors is the apex body to oversee the overall risk measurement, monitoring and reporting functions of the Bank including derivative transactions through Risk Management Committee of the Board (RMCBOD). The bank also internally monitors risk management through in-house Risk Management Committee. Asset Liability Committee (ALCO). Operational Risk Management Committee (ORMC) and Interna) Committee on Investment (ICII.

d) Identification of underlying hedge items for hedging mitigating crcdii risk, ope rai i onal risk and marled ri sk arising out of dcri vative transactions is done in accordance with the Hoard approved Integrated Treasury Policy. The customer related derivative transactions are covered with counter parly banks, nil back to back basis for identical amounts and tenure and the bank docs not carry market risk for such transactions.

c) The Integrated Treasury Policy prescribes accounting for hedge and non-hedge transactions, income recognition and valuation procedure for outstanding contracts The income recognition is done as per AS-11 on “The Effects of changes in Foreign exchange Rates” and the guidelines issued by RBI -’ FUDAI from lime to time. The integrated Treasury Policy also prescribes various limits such as Client Levet Limits, Trading Member Level Limits. Net Open Position Limits for credit risk mi ligation.

1.1.4 In compliance with RBI directives on the Assets Qualiiy Review (AQR) for thcii classification over the six quarters ending Seareh 51.2017. the Bank had made the classification of Advances and provisioning as per directives of RBI and IR A C norms as on 31.03.2017. The cftect of AQR has fully provided till 31.03 2017.

1.1.5 Dm ing the year Bank has written back Rs.33.10 crores on account of written back of provision on Food (‘redu availed by State (Interment of Punjab as advised by RBI/ide letter dated 08.02.2018. that Banks may write back the provision of 10% on account offal repayment of instalments upto 12 months and (b) authorization of the Punjab Government to RBI to debit i is account. Accordingly. Bank has retained 5% provision on outstanding exposure of Rs.331.67 Crore as on 31.03.2018.

In compliance with RBI Circular No. DBR No. BP BC 34 21.04.132 2016-17 dated 10.11.2016 with respect to “Scheme for Stressed Assets-Revisions”. unreali/ed interest amounting to Rs.6.27 Crore for the year 2017-1}! (against Rs.224.90 crores for FY 2016-17) in respect of standard assets under Strategic Debt Restructuring (SDR) and Scheme for Sustainable Structuring of Stressed Assets (S4 A) has been prov idcd for.

2 .1 Penalty- imposed by RBI

During the financial year 2017- 18. no penalty imposed on United Bank of India under Section46(4)of Banking Regulation Act 1949

3 Disclosures as per Accounting Standards (AS) in terms of RBI guidelines:

3.1. AS 5- Net Profit or Loss for the period, prior period items and changes in the Accounting Policies

There is no change in accounting policy during the year. The impact of prior period items is immaterial in the opinion of the management.

3.2 AS 9 - Revenue Recognition

Revenue is recognized as per the Accounting Policies disclosed in Schedule 17.

3.3 AS 10 -Accounting for Fixed Assets

3.3.1 Accounting for Fixed Assets is done as per the Accounting Policies disclosed in Schedule 17.

3.4 AS-12 Government Grants

During the year Rs. Nil Crores has been received in the form of subsidies/grants/incentives from RBI and State Government as below:

3.5 Leases (AS-19) (As compiled by The Management)

a) Lease rent paid for operating leases are recognized us an expense in the profit & Loss Account in the year to which it relates.

b) Future Lease Rent Payable fur operating lease: (As compiled and certified by Management)

3.6 AS 21 Consolidated Financial Statements/AS-23-Accounting for Investments in Associates in Consolidated Financial Statements

The Bank does not have any subsidiary and as such. AS-21 and AS-2 3 are not applicable.

3.7 AS 28- Impairment of Assets

In The opinion of the Bank, there is no indication of any material impairment of fixed asset sand consequently no provision is required.

3.8 AS 29- Provisions, Contingent Liabilities and Contingent Assets

Movements in significant Provisions and Contingent Liabilities have been disclosed at the appropriate places in the Notes forming part of the accounts.

3.14 Strategy- for lnd AS implementation and its progress

The strategy adopted by Bank for Ind AS implementation vis-a-vis the progress made by the Bank is given below:

As per the RBI guideline, the Bank is in the process of implementing the Indian Accounting Standards (Ind A S). A Steering Committee has been formed to take the required steps on a continuous basis for smooth convergence. The Bank has appointed M/’s. Detoitte Haskins & Sells, LLP as the consultant fur assisting the bank in smooth implementation of Indian Accounting Standards The pro-forma financial statement for the quarter ended 30.06.2017 has been submit led to RBI within the prescribed due date, in order to facilitate smooth transition to the application of Ind AS. Bank is in the process of identifying the changes required to be made in the IT system and other policies to comply with Ind AS. Bank is also in I he process of developing Expected Credit Loss (ECL) Model in line with the requirements of IND AS 109.

4.1 Disclosure of Letter of Comforts (LoCs) issued by the Bank

a) During the current financial year ended 31.03 2018. the Bank has issued 451 (previous year 550) Letter of Comforts/Letter of Undertakings amounting to Rs. 1540.86 crores (previous year Rs. 1578.25 crores).

b) There are 186 nos (previous year 204) of outstanding Letter of Comforts as on 31.03.2018 amounting to Rs.487.37 crores (previous year Rs.564.59 crores).

4.2 Provision Coverage Ratio (PCR)

The provision coverage ratio (PCR) for the Bank as on 31 March 2018 is 53.48 %.

4.3. Unamortised Pension and Gratuity liabilities

The bank does not have any unamortised Pension

RBI vide its letter DBR No. BN it.9730/21.04.018/2017-18 dated 27.04.2018 has given the option to Banks to spread additional liability on account of the enhancement in gratuity limits from Ks. 10 lakh to Rs 20 lakh from 29 03 20IX under Payment of Gratuity Act. 1972 over four quarters beginning with The quarter ended March 31,20 IS. Accordingly, the Rank has exercised the option and provided Rs.35.tl9 crores in the quarter ended Mareh 31.2018 and deferred Rs. 105.25 crores to subsequent three quarters of the ensuing financial year.

4.4 Credit Default Swaps

Bank has not undertaken any Credit Default Swaps in the year 2017-18 as well as in they ear 2016-17.

4.5 Unhedged Foreign Currency Exposure

The incremental provision/Capital requirement is arrived by considering likely Loss & EB1D of the borrowers as per RBI guidelines. The unhedged Foreign Currency Exposures. Incremental provisions and capital requirements that are provided by the hank as oil 31 March 2018 are given below:

4.6 Qualitative Disclosure around LCR

The Liquidity Coverage Ratio (LCR) Standard aims to ensure that a Bank maintains an adequacy level of unencumbered High Quality Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario specified by supervisor Bank has implemented and is computing LCR since 1st January, 2015.

LCR ts calculated as a ratio of’ HQL A to net cash outflow under stress scenario over the next 30 calendar days.

As per RBI guideline. Bank is required to maintain minimum 90^% LCR as on 31.03.2018

LCR of the Bank is assessed at 205.57% for the quarter ended on 31.03.2018 which is well above the mini mu in requirement as prescribed by Reserve Bank of lndia.

4.7 a) Registration formalities are pending in case of one properties consisting of Rs 1.50 Crores. WDV as on 31.03.2018: Rs.139 Crores (Previous Year Rs. 1.36 Crores).

b) Premises include leased properties amounting to Rs. 167.71 Crores (net of amortization) as at 31st March 2018 (Previous Year Rs. 161.10 Crores)

5. Based on information available with the bank, there are few suppliers services who are registered as Micro Small or Medium Enterprise under the Micro Small and Medium Enterprise Development act 2006 (MSMED ACT, 2006)information in respect of micro and small enterprises as required by MSMLD.

6. During the year Bank has reported 81 numbers of fraud cases involving total amount of Rs.881.42 Crores against which Bank has some existing provision. A further provision of Rs. 15.30 crores has been made during the year, out of which Rs.2.40 crores is for non advance related frauds and Rs. 12.90 crores is for advance related frauds. No amount is required against unamortised provision.

Further, in view of fraud reported by certain banks in respect of two Gems and Jewellery borrower group accounts, the Bank has declared these accounts as fraud involving a total funded exposure of Rs.330.crores, out of which Rs.82.74 crore has been provided being 25% of funded exposure. The quantum of unamortised provision of RS.248.21 crores being 75% of the funded exposure has been debited from Revenue & Other Reserve and will be provided in next three quarters.

7. In accordance with RBI letter DBR NO. BP 11756/21.04.048/2017-18 dated April 02. 2018. The provisioning requirements in respect of NCLT accounts is reduced from 50% of secured portion to 40% of secured portion as at March 31,2018. The Bank has availed the option of dispensation available and as a result the provision of Rs.249.40 Crores has been reduced in such accounts.

8. Previous Year’s figures have been regrouped/rearranged wherever considered necessary to make them comparable with those of the current year.

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Mar 31, 2017

1. Sale and Transfers to/from Held to Maturity (HTM) Category

1. Central Govt Securities worth Rs. 2439.75 Crore (Book Value)was sold from HTM Category during the FY-2016 17.

2. Central Govt Securities having Face Value of Rs. 2872.46 Crore (Book Value Rs. 2758.56 Crore) was transferred from HTM to AFS Category and Central Govt Securities Having Face Value of Rs. 2575.90 Crores (Book value Rs. 2633.00 Crores) was transferred from AFS to HTM Category on 18-05-2016.

3. Venture Capital Securities Rs. 7.36 Crores was transferred from HTM to AFS Category.

4. Transactions involving Foreign Exchange

Monetary Assets and liabilities, excluding outstanding Forward Exchange Contracts in each currency, except currency of Bangladesh (BDT 23,02,661.26 equivalent INR 15.79 lacs) which is valued at notional value due to non availability of spot rates, are revalued at the balance Sheet date at closing spot rates announced by the Foreign Exchange Dealers Association of India (FEDAI).

5. Disclosures on risk exposure in derivatives A) Qualitative Disclosures

6. The Bank has undertaken derivative transactions in currency futures for trading (arbitrage) & hedging purposes.

7. Risk management of derivative transactions has been segregated into three functional areas namely,

8. Front-Office for undertaking transaction;

9. Mid-Office for risk management and reporting; and

10. Back-Office for settlement, reconciliation and accounting.

11. The risk measurement, reporting and monitoring function is undertaken by the mid-office. The Board of Directors is the apex body to oversee the overall risk measurement, monitoring and reporting functions of the Bank including derivative transactions through Risk Management Committee of the Board (RMCBOD). The bank also internally monitors risk management through in-house Risk management Committee, Asset Liability Committee (ALCO), Operational Risk Management Committee (ORMC) and Internal Committee on Investment (ICI).

12. Identification of underlying hedge items for hedging / mitigating credit risk, operational risk and market risk arising out of derivative transactions is done in accordance with the Board approved Integrated Treasury Policy. The customer related derivative transactions are covered with counter party banks, on back to back basis for identical amounts and tenure and the bank does not carry market risk for such transactions. However, during the year under review, bank has not used any derivative product to hedge its own portfolio.

13. The Integrated Treasury Policy prescribes accounting for hedge and non-hedge transactions, income recognition and valuation procedure for outstanding contracts. The income recognition is done as per AS-11 on “The Effects of changes in Foreign exchange Rates” and the guidelines issued by RBI / FEDAI from time to time. The integrated Treasury Policy also prescribes various limits such as Client Level Limits, Trading Member Level Limits, Net Open Position Limits for credit risk mitigation..

14. The above disclosures, including sacrifice are as compiled and certified by the Bank’s Management.

15. The quantum of economic sacrifice during the year on the restructured assets has been calculated by the NPV method as on 31.03.2017 for standard and NPA assets of Rs. 1 crore and above. For the remaining assets, economic sacrifice has been provided @ 5% of outstanding balance.

16. The increase in balance of restructured accounts as on 31.03.2017 has been included under up gradation and the decrease in balance of restructured accounts as on 31.03.2017 has been included under down gradation.

17. In compliance with RBI directives on the Assets Quality Review (AQR) for their classification over the six qua ters ending March 31, 2017, the Bank has made the classification of Advances and provisioning as per directives of RBI and IRAC norms.

18. In compliance to RBI letter no. DBR.NO.BP.13018/21.04.048/2015-16 dated 12.04.2016., Bank has provided 15% of the existing outstanding exposure of Rs.342.10 Crores as on 31.03.2017 under the food credit availed by State Government of Punjab.

19. Risk Category-wise Country Exposure

The Bank has analyzed its risk exposure to various countries as on 31st March, 2017 and such exposure is less than the threshold limit of 1% of the total assets of the Bank. In terms of RBI guidelines, no provision is required for this exposure.

The position of risk category-wise country exposure is given below:

In compliance with RBI Circular No. DBR No. BP.BC.34/21.04.132/2016-17 dated 10.11.2016 with respect to “ Scheme for Stressed Assets- Revisions”, unrealized interest amounting to Rs.224.90 crores for the year 2016-17 in respect of standard assets under Strategic Debt Restructuring (SDR) and Scheme for Sustainable Structuring of Stressed Assets (S4A) has been provided for.

20. Penalty Imposed by RBI

RBI under Sec 35 A of Banking Regulation Act 1949 and RBI Directive No 3158/09.39.00 (Policy) 2009-10 dated 19/11/2009 a penalty of Rs.0.04 Crores imposed on United Bank of India for the FY 2016-17.

21. AS 5 - Net Profit or Loss for the period, prior period items and changes in the Accounting Policies - There is no change in accounting policy during the year. The impact of prior period items is immaterial in the opinion of the management.

22. AS 9 - Revenue Recognition Revenue is recognized as per the Accounting Policies disclosed in Schedule 17.

23. AS 10 - Accounting for Fixed Assets

24. Accounting for Fixed Assets is done as per the Accounting Policies disclosed in Schedule 17.

25. AS - 12 Government Grants

26. Related Party Disclosures (AS-18) (As Compiled by the management)

27. Names of the related parties and their relationship with the Bank: Associates:

28. No amount has been written off/written back in respect of dues from/to related parties.

29. No provision is required in respect of dues to related parties.

30. Leases (AS-19) (As compiled by the Management)

31. Lease rent paid for operating leases are recognized as an expense in the Profit & Loss Account in the year to which it relates.

32. Future Lease Rent Payable for operating lease: (As compiled and certified by Management)

33. Future lease rents and escalation in the rent are determined on the basis of agreed terms.

34. At the expiry of the initial lease term, generally the bank has an option to extend the lease for a further predetermined period.

35. AS 21 - Consolidated Financial Statements/AS-23-Accounting for Investments in Associates in Consolidated Financial Statements

The Bank does not have any subsidiary and as such, AS-21 and AS-23 are not applicable.

36. The bank has recognized Deferred Tax Assets of Rs.1136.50 Cr and Rs 244.74 Cr on account of timing difference arising out of excess NPA Provision over and above the Deduction for bad and doubtful debts and Funded Interest Term Loan respectively under the provision of Income Tax acts 1961.

Bank has also recognized Deferred Tax Assets of Rs. 72.04 Cr on Provisions for Stressed Assets. Hitherto the same was not recognized.

37. AS 28 - Impairment of Assets

In the opinion of the Bank, there is no indication of any material impairment of fixed assets and consequently no provision is required.

3.13 AS 29 - Provisions, Contingent Liabilities and Contingent Assets

Movements in significant Provisions and Contingent Liabilities have been disclosed at the appropriate places in the Notes forming part of the accounts.

38. Strategy for Ind AS implementation and its progress

The strategy adopted by Bank for Ind AS implementation vis-a-vis the progress made by the Bank is given below: A Steering Committee, with Executive Director as Chairman of the implementation committee and members from cross functional areas of the Bank has been formed as directed by RBI by its circular DBR.BP.BC. No.76/21.07.001/2015-16 dated February 11, 2016.

The Audit Committee of the Board is overseeing the progress of the Ind AS implementation process.

Bank has submitted proforma Ind AS financial statement for the half year ended September 30, 2016 in pursuance to RBI Circular No: DBR.BP.BC.No.106/21.07.001/2015-16 Dtd:23.06.2016.

Bank has selected M/s Deloitte Haskins & Sells, LLP as the Ind AS consultant of the Bank.

Requisite training is being imparted to officials of the Bank from time to time to implement the Ind AS guidelines issued by RBI.

39. Additional Disclosures

40. Provisions and Contingencies

The break-up of ‘Provisions and Contingencies’ shown under the head “Expenditures in Profit and Loss Account is as under:

41. Disclosure of Letter of Comforts (LoCs) issued by the Bank

42. During the current financial year ended 31.03.2017 the Bank has issued 550 (510) letter of comforts /letter of Undertaking amounting to Rs.1578.25 Crores (Previous Year Rs.827.25 Crores).

43. There are 204 nos (previous year 237) of outstanding LOCs as on 31.03.2017 amounting to Rs.564.59 crores (previous year Rs.388.46 crore) .

44. Provision Coverage Ratio (PCR)

The provision coverage ratio (PCR) for the Bank as on 31st March 2017 is. 56.45%.

45. Qualitative Disclosure around LCR

The Liquidity Coverage Ratio (LCR) standard aims to ensure that a Bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario specified by supervisor. Bank has implemented and is computing LCR since 1st January, 2015.

LCR is calculated as a ratio of HQLA to net cash outflow under stress scenario over the next 30 calendar days.

As per RBI guideline, Bank is required to maintain minimum 80% LCR as on 31.03.2017.

LCR of the Bank is assessed at 348.81% for the quarter ended on 31.03.2017 which is well above the minimum requirement as prescribed by Reserve Bank of India.

46. Registration formalities are pending in case of one properties consisting of Rs.1.50 Crores, WDV as on 31.03.2017 Rs.1.36 Crores (Previous Year Rs.1.43Crores).

47. Premises include leased properties amounting ro Rs. 161.10 Crores (net of amortization) as at 31st March 2017 (Previous Year Rs. 76.90 Crores).

48. Based on information available with the bank, there are few suppliers/services who are registered as Micro Small or Medium Enterprise under the Micro Small and Medium Enterprise development act 2006 (MSMED ACT, 2006)information in respect of micro and small enterprises as required by MSMED.

49. Previous Year’s figures have been regrouped/rearranged wherever considered necessary to make them comparable with those of the current year.

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Mar 31, 2016

1. Sale and Transfers to/from Held to Maturity (HTM) Category

(a) Securities having book value of Rs.499.49 Crores (Previous year: Rs.257.48 Crores) were sold during the year from HTM Category.

(b) At the beginning of the year (i.e on13.04.2015), the Bank has shifted Central Govt. Securities having face value of Rs.1859.05 Crores (Book Value Rs.1861.73 Cr) and State Govt. Securities having face value of Rs.1260.90 Crores ( Book Value Rs.1264.72 Cr) scrip wise from Held to Maturity (HTM) to Available For Sale (AFS) Category and Similarly the bank has shifted State Govt. Securities having Face value of Rs.1585.79 (Book Value of Rs.1680.75 Cr ) from AFS to HTM category. This was with the approval of the Board of Directors.

(c) The value of sales and transfer of securities to/from HTM Category (excluding the exempted transfer) did not exceed 5% of book value of the Investment in HTM Category at the beginning of the year.

2. Transactions involving Foreign Exchange Monetary Assets and liabilities, excluding outstanding Forward Exchange Contracts in each currency, except currency of Bangladesh (BDT 23,03,236.26 equivalent INR 15.80 lacs) which is valued at notional value due to non availability of spot rates, are revalued at the balance Sheet date at closing spot rates announced by the Foreign Exchange Dealers Association of India (FEDAI).

3. Derivatives

3.1 Disclosures on risk exposure in derivatives A) Qualitative Disclosures

a) The Bank has undertaken derivative transactions in currency futures for trading (arbitrage) & hedging purposes.

b) Risk management of derivative transactions has been segregated into three functional areas namely, i) Front-Office for undertaking transaction;

ii) Mid-Office for risk management and reporting; and

iii) Back-Office for settlement, reconciliation and accounting.

c) The risk measurement, reporting and monitoring function is undertaken by the mid-office. The Board of Directors is the apex body to oversee the overall risk measurement, monitoring and reporting functions of the Bank including derivative transactions through Risk Management Committee of the Board (RMCBOD). The bank also internally monitors risk management through in-house Risk management Committee, Asset Liability Committee (ALCO), Operational Risk Management Committee (ORMC) and Internal Committee on Investment (ICI).

d) Identification of underlying hedge items for hedging / mitigating credit risk, operational risk and market risk arising out of derivative transactions is done in accordance with the Board approved Integrated Treasury Policy. The customer related derivative transactions are covered with counter party banks, on back to back basis for identical amounts and tenure and the bank does not carry market risk for such transactions. However, during the year under review, bank has not used any derivative product to hedge its own portfolio.

e) The Integrated Treasury Policy prescribes accounting for hedge and non-hedge transactions, income recognition and valuation procedure for outstanding contracts. The income recognition is done as per AS-11 on "The Effects of changes in Foreign exchange Rates" and the guidelines issued by RBI / FEDAI from time to time. The integrated Treasury Policy also prescribes various limits such as Client Level Limits, Trading Member Level Limits, Net Open Position Limits for credit risk mitigation.

3.2 In compliance with RBI directives on the Assets Quality Review(AQR) for their classification over the two quarters ending December 31,2015 and March 31, 2016, the Bank has made the classification of Advances and provisioning as per directives of RBI and IRAC norms.

3.3 In compliance to RBI letter no. DBR.NO.BP.13018/21.04.048/2015-16 dated 12.04.2016., Bank has provided a sum of Rs.41.14 Crores being 7.5% of the existing outstanding exposure of Rs.548.60 Crores as on 31.03.2016 under the food credit availed by State Government of Punjab.

*The above disclosures are as compiled and certified by the Bank''s Management. Figures in bracket represent Previous Year''s figures.

4. Penalty Imposed by RBI

a) RBI under Sec 35 A of Banking Regulation Act 1949 and RBI Directive No 3158/09.39.00 (Policy) 2009-10 dated 19/11/2009 a penalty of Rs.0.05 Crores imposed on United Bank of India for the FY 2015-16.

5. Disclosures as per Accounting Standards (AS) in terms of RBI guidelines:

5.1. AS 5 - Net Profit or Loss for the period, prior period items and changes in the Accounting Policies There is no change in accounting policy during the year. The impact of prior period items is immaterial in the opinion of the management.

5.2 AS 9 -Revenue Recognition

Revenue is recognized as per the Accounting Policies disclosed in Schedule 17.

5.3 AS 10 Accounting for Fixed Assets

5.3.1 Accounting for Fixed Assets is done as per the Accounting Policies disclosed in Schedule 17.

5.3.2 During the year Bank has revalued the premises forming part of its Fixed Assets Schedule based on the reports of external independent Valuers. The surplus arising from the revaluation amounting to Rs. 346.67 Crores is credited to " Revaluation Reserve" under " Reserves and surplus" and 45% of the same has been reckoned in Tier 1 capital as per RBI guidelines.

Bank has acquired shares of two companies amounting to Rs.19.97 Crores by conversion of debt into equity as part of a strategic debt restructuring which are exempt from Capital Market Exposure limits.

6. Risk Category-wise Country Exposure

The Bank has analyzed its risk exposure to various countries as on 31st March, 2016 and such exposure is less than the threshold limit of 1% of the total assets of the Bank. In terms of RBI guidelines, no provision is required for this exposure.

* Other Benefits include Privilege Leave, Casual leave, Sick Leave and LFC/LTC. Note: The above statement is based on the report of the Actuary.

7. AS 17 - Segment Reporting

The Banks operations are classified into two primary business segments viz. "Treasury Operations" and "Banking Operations". The relevant information is given hereunder in the prescribed format:

Part B: Geographical Segment Since the Bank does not have any overseas branch, reporting under geographical segment is not applicable.

8. Related Party Disclosures (AS-18) (As Compiled by the management)

8.1 Names of the related parties and their relationship with the Bank: Associates:

(c) The bank has recognized Deferred Tax Assets of Rs. 333.82 Cr., Rs. 147.09 Cr and Rs. 14.24 Cr. on account of timing difference arising out of excess provision over & above the deduction for bad and doubtful debts, Funded Interest Term Loan and provision on Food Credit respectively under the provision of Income Tax acts 1961. Hitherto the same was not recognized.

9. Leases (AS-19) (As compiled by the Management)

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: (As compiled and certified by Management)

i) Future lease rents and escalation in the rent are determined on the basis of agreed terms.

ii) At the expiry of the initial lease term, generally the bank has an option to extend the lease for a further pre-determined period.

10. AS 21 - Consolidated Financial Statements/AS-23-Accounting for Investments in Associates in Consolidated Financial Statements The Bank does not have any subsidiary and as such, AS-21 and AS-23 are not applicable.

11. AS 22 - Accounting for Taxes on Income

12. AS 28 - Impairment of Assets

In the opinion of the Bank, there is no indication of any material impairment of fixed assets and consequently no provision is required.

13. AS 29 - Provisions, Contingent Liabilities and Contingent Assets Movements in significant Provisions and Contingent Liabilities have been disclosed at the appropriate places in the Notes forming part of the accounts.

14. Additional Disclosures

14.1 Provisions and Contingencies

The break-up of ''Provisions and Contingencies'' shown under the head "Expenditures in Profit and Loss Account" is as under:

In terms of clause 6.5(A)(a)(ii) of Reserve Bank of India''s (RBI''s) Master Circular No.DBR.No.BP.2/21.04.048/2015-16 dated 1st July,2015, the Bank has utilized its countercyclical/floating provisions held as at 1st April,2015 of Rs.52.76 Crores for adjustment of loss arising out of sale of assets, below the net book value, to Assets Reconstruction Company.

*Provision made towards Income Tax during the year includes reversal of excess provision of Rs,78.85 Crores relating to previous years.

Pursuant to RBI Circular No RBI/2014-15/535 DBR.No.BP.BC.83/21.04.048/2014-15 dated 01.04.2015, the Bank has made a provison of Rs.62.38Crores (PY Rs.2.09 Crores) during the year ended 31st March 2016 in respect of frauds/suspected frauds and balance unprovided amount of Rs.53.74 Crores has been debited to Revenues & Other Reserves in terms of RBI circular No. RBI/2015-16/376DBR No.BP.BC.92.21/04.048/2015-16 dated 18th April 2016.The same will be reversed by debit to the Profit and Loss account in subsequent quarters in the next financial year.

15. Draw Down from Reserves

Pursuant to RBI Circular No RBI/2014-15/535 DBR.No.BP.BC.83/21.04.048/2014-15 dated 01.04.2015, the Bank has drawn Rs.53.74 from Revenue Reserve against provision for Fraud/suspected fraud.

16. Disclosure of Letter of Comforts (LoCs) issued by the Bank

a) During the current financial year the Bank has issued 510 nos LoCs (Previous Year 378) amounting to Rs.827.25 Crores (Previous Year Rs.5187.84 Crores) for providing Buyers Credit facility.

b) There are 237 nos (Previous Year 212) of outstanding LoCs as on 31.03.2016 amounting to Rs.388.46 Crores (Previous year Rs.312.71 Crores).

17. Provision Coverage Ratio (PCR)

The provision coverage ratio (PCR) for the Bank as on 31st March 2016 is 53.36 %.

* The above disclosures are as compiled and certified by the Bank''s Management.

18. Qualitative Disclosure around LCR

The Liquidity Coverage Ratio (LCR) standard aims to ensure that a Bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario specified by supervisor. Bank has implemented and is computing LCR since 1st January, 2015.

LCR is calculated as a ratio of HQLA to net cash outflow under stress scenario over the next 30 calendar days.

As per RBI guideline, Bank is required to maintain minimum 70% LCR as on 31.03.2016.

LCR of the Bank is assessed at 242.26% which is well above the minimum requirement as prescribed by the regulator.

19. a) Registration formalities are pending in case of two properties consisting of Rs.2.57 Crores, WDV as on 31.03.2016 Rs.2.37 Crores (Previous Year Rs.2.11Crores). b) Premises include leased properties amounting to Rs.76.90 Crores (net of amortization) as at 31st March 2016(Previous Year Rs.75.87Crores).

20. Based on information available with the bank, there are few suppliers/services who are registered as Micro,Small or Medium Enterprise under the Micro,Small and Medium Enterprise development act 2006 (MSMED ACT, 2006)information in respect of micro and small enterprises as required by MSMED.

21. Previous Year''s figures have been regrouped / rearranged wherever considered necessary to make them comparable with those of the current year.

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Mar 31, 2015

1. Confirmation/reconcilation of balances with foreign branches, SBI and other Banks, NOSTRO Accounts, Drafts Payable, Clearing Difference, Inter office adjustments, etc. is in progress on an on-going basis. Pending final clearance/adjustment of the above, the overall impact, if any, on the Financial Statements, in the opinion of the management, is not likely to be significant.

2. Capital

a) During the year, with the approval of its shareholders by the resolution at the Annual General Meeting held on 18th August 2014, Bank allotted 7,74,00,000(Seven Crore Seventy Four Lacs) equity shares of 10/-(Rupees Ten only) each at a premium of 25.50(Rupees twenty five and Paisa Fifty only) per share to the Government of India by conversion of 27,477(Twenty Seven Thousand Four Hundred Seventy Seven) number of Perpetual Non-cumulative Preference Shares(PNCPS) out of total 80,000(PNCPS) of 1,00,000/- each held by the Government of India aggregating to 274.77 crore through preferential allotment under Chapter VII of the SEBI ICDR Regulation 2009, as amended.

b) During the year the Bank has allotted 8,45,07,042(Eight Crore Forty Five Lac Seven Thousand Forty Two) number of Equity Shares of 10/-(Rupees Ten only) each at a premium of 25.50 (Rupees Twenty Five and Paisa Fifty only) per share aggregating to 300 crore(Three Hundred Crore only) on preferential basis to Life Insurance Corporation of India(LIC of India) under Chapter VII of the SEBI ICDR Regulation 2009, as amended.

c) During the year, with the approval of its shareholders by the resolution at the Extra-ordinary General Meeting held on 13th March 2015, Bank has alloted to the Government of India 12,28,60,818(Twelve Crore Twenty Eight Lac Sixty Thousand Eight Hundred Eighteen) number of Equity Shares of 10/-(Rupees Ten only) each at a premium of 32.75(Rupees Thirty Two and Paisa Seventy Five only) per share aggregating to 525,22,99,969.50(Five Hundred Twenty Five Crore Twenty Two Lacs Ninety Nine Thousand Nine Hundred Sixty Nine and paise Fifty only) by conversion of 52,523 units of PNCPS of 1,00,000/- each under Chapter VII of the SEBI ICDR Regulation 2009, as amended.

3. Sale and Transfers to/from Held to Maturity(HTM) category

a) Securities having book value of 257.48 Crores(Previous year 47.12 Crores) were sold during the year from HTM category.

b) At the beginning of the year (02.06.2014) with the approval of the Board of Directors, the Bank has shifted securities having face value of 325.00 Crores(Book Value 324.72 crore) and State Government Securities having face value of 325.00 crore(Book Value 327.07 crore) from Held to Maturity (HTM) Category to Available for Sale(AFS) scrip wise in accordance with RBI Guidelines.

c) The value of sales and transfer of securities to/from HTM Category(excluding the exempted transfer) did not exceed 5% of book value of the Investment in HTM Category at the beginning of the year.

4. Transactions involving Foreign Exchange

Monetary Assets and Liabilities, excluding outstanding Forward Exchange Contracts in each currency, except currency of Bangladesh (BDT 23,04,536.20 equivalent INR 15.81 lacs) which is valued at notional value due to non-availability of spot rates, are revalued at the Balance Sheet date at closing spot rates announced by the Foreign Exchange Dealers Association of India(FEDAI).

5. Disclosures on risk exposure in derivatives

A) Qualitative Disclosures

a) The Bank has undertaken deriative transactions in currency futures for trading(arbitrage) & hedging purposes.

b) Risk management of derivative transactions has been segregated into three functional areas namely,

i) Front-Office for undertaking transaction;4

ii) Mid-Office for risk management and reporting; and

iii) Back-Office for settlement, reconciliation and accounting.

c) The risk measurment, reporting and monitoring function is undertaken by the mid-office. The Board of Directors is the apex body to oversee the overall risk measurement, monitoring and reporting functions of the Bank including derivative transactions through Risk Management Committee of the Board(RMCBOD). The bank also internally monitors risk management through in-house Risk management Committee, Asset Liability Committee (ALCO), Operational Risk Management Committee(ORMC) and Internal Committee on Investment(ICI).

d) Identification of underlying hedge items for hedging/mitigating creditrisk, operational risk and market risk arising out of derivative transactions is done in accordance with the Board approved Integrated Treasury Policy. The customer related derivative transactions are covered with counter party banks, on back to back basis for identical amounts and tenure and the bank does not carry market risk for such transactions. However, during the year under review, bank has not used any derivative product to hedge its own portfolio.

e) The Integrated Treasury Policy prescribes accounting for hedge and non-hedge transactions, income recognition and valuation procedure for outstanding contracts. The income recognition is done as per AS-11 on "The Effects of changes in Foreign exchange Rates" and the guidelines issued by RBI/FEDAI from time to time. The integrated Treasury Policy also prescribes various limits such as Client Level Limits, Trading Member Level Limits, Net Open Position Limits for credit risk mitigation.

6. Risk Category-wise Country Exposure

The Bank has analyzed its risk exposure to various countries as on 31st March,2014 and such exposure is less than the threshold limit of 1% of the total assets of the Bank. In terms of RBI guidelines, no provision is required for this exposure.

7. Penalty Imposed by RBI

a) RBI/FIU levied penalty of 0.06 crores under section 13 of Prevention of Money Laundering Act(PMLA),2002.

8. Disclosures as per Accounting Standards(AS) in terms of RBI guidelines:

a) AS5-Net Profit or Loss for the period, prior period items and changes in the Accounting Policies

b) The depreciation includes 2.93 crore for prior period charged to Profit and Loss for the year.

c) The Bank has identified useful life of fixed assets as per the requirements of Schedule II of the Companies Act, 2013, and has provided depreciation on Fixed Assets accordingly.

Further, the additional depreciation of 10.60 crores arising due to adjustment of impact arising on the first-time application of transitional provision to schedule II has been charged to General Reserve.

d) The additional depreciation of 4.82 crores on revalued assets has been charged to P&I account and an amount equivalent to the additional depreciation has been transferred from revaluation reserve to General Reserve as per Companies Act, 2013.

9. AS9-Revenue Recognition

Revenue is recognized as per the Accounting Policies disclosed in Schedule 17.

10. AS10-Accounting for Fixed Assets

11. Accounting for Fixed Assets is done as per the Accounting Policies disclosed in Schedule 17.

12. As per the transitional provisions under Schedule II of Companies Act 2013 with effect from 01.04.2014:

a) Carrying amount of the existing assets will be amortized or depreciated over the remaining useful life of the assets keeping residual value as 5%.

b) Where the remaining useful life of the assets is nil, may be recognized in the opening balance of retained earnings.

13. AS-12 Government Grants

During the year 0.76 crore has been received in the form of subsidies/grants/incentives from RBI and State Government as below:

14. AS-15 Employee Benefits

In terms of the provisions of RBI Circular no.DBOD.BP.BC.80/21.04.018/2010-11 dated 9th February,2011 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits, 447.31 crore was to be amortized over a period of five years with effect from Financial Year 2010-11. Accordingly 89.46 crore has been charged to the Profit and Loss account being the proportionate amount for the year ended 31st March, 2015 (89.46 crore for the previous year). The unamortized liability as at 31st March, 2015 stands at Nilcrore(Previous Year 89.47 crore).

Pending settlement of the proposed wage revision effective from November 2012, an adhoc provision of 290 crores is held as at 31st March 2015. In addition 124.75 crore provision has been made for incremental pension liability due to wage revision on estimation basis.

15. AS17-Segment Reporting

The Banks operations are classified into two primary business segments viz. "Treasury Operations" and "Banking Operations". The relevant information is given here under in the prescribed format:

16. Leases(AS-19) (As compiled by the Management)

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 (As compiled and certified by Management)

i) Future lease rents and escalation in the rent are determined on the basis of agreed terms.

ii) At the expiry of the initial lease term, generally the bank has an option to extend the lease for a further pre-determined period.

17. AS21- Consolidated Financial Statements/AS-23-Accounting for Investments in Associates in Consolidated Financial Statements

The Bank does not have any subsidiary and as such, AS-21 and AS-23 are not applicable.

18. AS28-Impairment of Assets

In the opinion of the Bank, there is no indication of any material impairment of fixed assets and consequently no provision is required.

19. AS29-Provisions, Contingent Liabilities and Contingent Assets

Movements in significant Provisions and Contingent Liabilities have been disclosed at the appropriate places in the Notes forming part of the accounts.

20. Additional Disclosures

a) Provisions and Contingencies

The break-up of 'Provisions and Contingencies' shown under the head "Expenditures in Profit and Loss Account" is as under:

b) Floating Provisions(Countercyclical provisioning buffer)

Pursuant to Reserve Bank of India's(RBI's) Circular No.DBR.No.BP.BC.79/21.04.048/2014-15 dated 30th March 2015, the Bank has utilized 50% of its counter cyclical/floating provisions held as at 31st December 2014. As per the said RBI Circular, an amount of 52.75 crores out of floating provision of 105.51 crores held as at 31st December 2014 has been utilized for making specific provisions for non-performing assets, as per the policy approved by the Board.

c) Draw Down from Reserves

There was no Draw Down from Reserves during the year.

d) Disclosure of complaints

a) Customer Complaints

b) Awards passed by the Banking Ombudsman

e) Disclosure of Letter of Comforts(LoCs) issued by the Bank

a) During the current financial year the Bank has issued 378 nos LoCs (Previous Year 458) amounting to 5187.84 crore (Previous Year 3122.00 crore) for providing Buyers Credit facility.

b) There are 194 nos(Previous Year 204) of outstanding LoCs as on 31.03.2015 amounting to 300.47 crore(Previous year 1043.28 crore).

f) Provision Coverage Ratio(PCR)

The provision coverage ration(PCR) for the Bank as on 31st March 2015 is 58.50% which is calculated taking into account the total technical write offs made by the Bank.

21. Unamortised Pension and Gratuity Liabilities

In terms of the provisions of RBI Circular no.DBOD.BP.BC.80/21.04.018/2010-11 dated 9th February, 2011 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits, 447.31 crore was to be amortized over a period of five years with effect from Financial Year 2010-11. The unamortized liability as at 31st March,2015 stands NIL(Previous Year 89.47 crore).

22. Credit Default Swaps

The Bank has not undertaken any Credit Default Swaps in the year 2014-15 as well as in the year 2013-14

23. Unhedged Foreign Currency Exposure

Provision made for incremental provisioning under Unhedged Foreign Currency Exposure (UFCE) to the tune of 24,82,831.00 in March 2015 as per RBI Circular No.DBDO.No.BP.BC.85/21.06200/2001314 dated 15.01.2014. This approach of UFCE came to force first in June 2014. Capital held towards UFCE Risk in March 2015 is Nil as there is not a single instance where an exposure has become eligible for comparing incremental capital requirement.

24. Qualitative Disclosure around LCR

Bank maintained adequate liquidity during the quarter ended March 2015 which is evident from the Bank's average Liquidity Coverage Ratio (LCR) was 196.62% as against regulatory requirement of 60%. The comfortable liquidity position was on account of substantial level of High Quality Liquid Assets(HQLA). HQLA could be mainly attributed to high level of excess SLR. Bank did not have any exposure to derivatives; hence there was no liquidity risk on account of the same. Since Bank's exposure to any 6 foreign currency was less than 5% of total business of the Bank, there was no significant risk of currency wise liquidity mismatch. Bank mainly depended on diversified base of retail deposits for its funding requirements thus there was no risk of concentration of funding sources.

25. a) Registration formalities are pending in case of two properties costing 3.01 crore, WDV as on 31.03.2015 2.11 crore(Previous Year 1.12 crore).

b) Premises include leased properties amounting to 75.87 crore(net of amortization) as at 31st March 2015 (Previous Year 76.71 crore).

26. Previous Year's figures have been regrouped/ rearranged wherever considered necessary to make them comparable with those of the current year.

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Mar 31, 2014

CONTIGENT LIABILITIES (in thousands)

As on 31.03.2014 As on 31.03.2013



I. Claims against the bank not acknowledged as debts 3,87,15 5,51,12

II. Liability for partly paid investments 33,20,98 44,32,63

III. Liability on account of outstanding forward exchange contracts 5012,06,27 7180,52,37

IV Guarantees given on behalf of constituents (net of cash margin) :

a) In India 2517,93,87 1815,61,76

b) Outside India 1038,88,69 2119,75,64

c) BG invoked but not paid (in India) 4,70,26 4,77,18

Acceptances, endorsements and other obligations (net of cash margin) 1276,54,07 1908,24,82

VI. Other items for which the Bank is contingently liable 21,11,72 58,91,86

TOTAL : 9908,33,01 13137,67,38

2. Sale and Transfers to/from Held to Maturity (HTM) Category

(a) Scurities having book value of Rs. 47.12 Crores (Previous year: 568.33 Crores) was sold during the year from HTM Category.

(b) At the begining of the year (20.04.2013). with the approval of the Board of Directors, the Bank has shifted securities having face value of Rs. 453.15 Crores (Previous year Rs. 1476.00) at lower of book value or market value, scrip wise from Available For Sale (AFS) to Held to Maturity (HTM , Category and securities having face value of Rs.1919.25 Crores (Previous year Rs. 319.79) from HTM to AFS in accordance with RBI Guidelines in this regard.

(c) On the basis of special dispensation being allowed by the Reserve Bank of India vide its circular No. DBOD/BP.BC.No.41.21.04.141/2013-14 dated 23.08.2013, the Bank also undertook shifting of Securities for the second time on 18.09.2013 having face value of Rs. 6172.66 crore from AFS to HTM Category. In order to shift these securities at market value, Rs. 89.00 crore was reduced from the Book value being the MTM loss on the date shifting.

(d) The value of sales and transfer of securities to/from HTM Category (excluding the exempted transfer) did not exceed 5% of book value of the Investment in HTM Category at the beginning of the year.

3. Transactions involving Foreign Exchange

Monetary Assets and Liabilities, excluding outstanding Forward Exchange Contracts in each currency except currency of Bangladesh (BDT 23,05,806 equivalent INR 15.81 lacs) which is valued at notional value due to non- availability of spot rates, are revalued at the Balance Sheet date at closing spot rates announced by the Foreign Exchange Dealers Association of India (FEDAI).

4. Derivatives

4.1 Disclosures on risk exposure in derivatives:

A) Qualitative Disclosures

a) The Bank has undertaken derivative transactions in currency futures for trading (arbitrage) & hedging purposes.

b) Risk management organization of derivative transactions has been segregated into three functional areas namely,

i) Front-Office for undertaking transaction;

ii) Mid-Office for risk management and reporting; and

iii)Back-Office for settlement, reconciliation and accounting.

c) The risk measurement, reporting and monitoring function is undertaken by the mid-office. The Board of Directors is the apex body to oversee the overall risk measurement, monitoring and reporting functions of the Bank including derivative transactions through Risk Management Committee of the Board (RMCBOD). The bank also internally monitors risk management through in-house Risk management Committee, Asset Liability Committee (ALCO), Operational Risk Management Committee (ORMC) and Internal Committee on Investment (ICI).

d) Identification of underlying hedge items for hedging / mitigating credit risk, operational risk and market risk arising out of derivative transactions is done in accordance with the Board approved Integrated Treasury Policy. The customer related derivative transactions are covered with counter party banks, on back to back basis for identical amounts and tenure and the bank does not carry market risk for such transactions. However, during the year under review, bank has not used any derivative product to hedge its own portfolio.

e) The Integrated Treasury Policy prescribes accounting for hedge and non-hedge transactions, income recognition and valuation procedure for outstanding contracts. The income recognition is done as per AS-11 on "The Effects of changes in Foreign exchange Rates" and the guidelines issued by RBI / FEDAI from time to time. The integrated Treasury Policy also prescribes various limits such as Client Level Limits, Trading Member Level Limits, Net Open Position Limits for credit risk mitigation.

5. Risk Category-wise Country Exposure

The Bank has analyzed its risk exposure to various countries as on 31st March 2014 and such exposure is less than the threshold limit of 1% of the total assets of the Bank. In terms of RBI guidelines, no provision is required for this exposure.

6. Penalty imposed by RBI

a) RBI levied penalty of Rs.1,27,465/- for default in maintaining required percentage of CRR on daily basis on one day on 28th February, 2014 during the fortnight ended on 7th March, 2014.

b) RBI levied penalty of Rs.2.50 crores for violation of instructions in "Know Your Customer/Anti Money Laundering" norms.

7. Disclosures as per Accounting Standards (AS) in terms of RBI guidelines:

7.1. AS 5 - Net Profit or Loss for the period, prior period items and changes in the Accounting Policies

There were no material prior period income/expenditure items requiring disclosure under AS-5.

7.2 AS 9 - Revenue Recognition

Revenue is recognized as per the Accounting Policies disclosed in Schedule 17.

8. AS - 15 Employee Benefits

In terms of the provisions of RBI Circular no. DBOD. BP.BC.80/21.04.018/2010-11dated 9th February, 2011 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits, Rs.447.31crore is being amortized over a period of five years with effect from Financial Year 2010-11. Accordingly Rs.89.46 crore has been charged to the Profit and Loss account being the proportionate amount for the year ended 31st March, 2014 (Rs.89.46 crore for the previous year). The unamortized liability as at 31st March, 2014 stands at Rs.89.47 crore (Previous YearRs.178.93 crore).

Pending settlement of the proposed wage revision effective from November 2012, an adhoc provision of Rs.170 crores is held as at 31st March 2014.

9. AS 17 - Segment Reporting

F The Banks operations are classified into two primary business segments viz. "Treasury Operations" and "Banking Operations". The relevant information is given hereunder in the prescribed format:

10. Related Party Disclosures (AS-18)(As Compiled by the management)

11. Names of the related parties and their relationship with the Bank:

Associates (Regional Rural Bank)

i. Assam Gramin Vikash Bank

ii. Bangiya Gramin Vikash Bank

iii. Manipur Rural Bank

iv. Tripura Gramin Bank

3.6.2 Key Management Personnel

(I) Mr. Deepak Narang. - Executive Director

(ii) Mr.Sanjay Arya - Executive Director

(iii) Mrs.Archana Bhargava- Ex-Chairperson & Managing Director

12. AS 21 - Consolidated Financial Statements / AS 23 - Accounting for Investments in Associates in Consolidated Financial Statements

13. AS 22 - Accounting for Taxes on Income

14. AS 28 - Impairment of Assets

In the opinion of the Bank, there is no indication of any material impairment of fixed assets and consequently no provision is required.

15. AS 29 - Provisions, Contingent Liabilities and Contingent Assets

Movements in significant Provisions and Contingent Liabilities have been disclosed at the appropriate places in the Notes forming part of the accounts.

16. Additional Disclosures

16.1 Floating Provisions:

Pursuant to Reserve Bank of India''s (RBI''s) Circular No.DBDO.No.BP.95/21.04.048/2013-14 dated 7th February 2014, the Bank has utilized 33% of its countercyclical/floating provisions held as at 31st March 2013. As per the said RBI Circular, an amount of Rs. 51.97 crores out of floating provision of Rs.157.48 crores held as at 31st March 2013 has been utilized for making specific provisions for non-performing assets, as per the policy approved by the Board.

16.2 Draw Down from Reserves:

Pursuant to Reserve Bank of India''s (RBI''s) Circular No.DBDO.No.BP.BC.77/21.04.018/2013-14 dated 20th December 2013, the Bank has created Deferred Tax Liability on the Special Reserve under section 36(1)(viii) of the Income Tax Act, 1961. As required by the said RBI Circular, the expenditure, amounting to Rs.72.03 due to the creation of DTL on Special Reserve of Rs.220.00 Crores as at 31st March 2013, not previously charged to Profit and Loss Account, has now been adjusted directly from the Reserves. Had this amount been charged to the Profit and Loss Account in accordance with the generally accepted accounting principles in India, the amount of Loss for the year would have been higher by such amount.

16.3 Disclosure of Letter of Comforts (LoCs) issued by the Bank

a) During the current financial year the Bank has issued 458 = nos LoCs (Previous Year 118) amounting to Rs.3122.00 crore (Previous Year Rs.3168.00 crore) for providing Buyers Credit facility.

b) There are 204 nos (Previous Year 231) of outstanding LoCs as on 31.03.2014 amounting to Rs. 1043.28 crore (Previous year Rs. 2299.91 crore).

17. Provision Coverage Ratio (PCR)

The provision coverage ratio (PCR) for the Bank as on 31st ™ March 2014 is 52.25 %, which is calculated taking into account the total technical write offs made by the Bank.

17.1 a) Registration formalities are pending in case of one property costing Rs.1.88 crore, WDV as on 31.03.2014 Rs.1.12 crores (Previous Year Rs.1.28 crore).

b) Premises include leased properties amounting to Rs.76.71 crore (net of amortization) as at 31st March 2014 (Previous Year: Rs.29.49 crore).

18. Previous Year''s figures have been regrouped / rearranged wherever considered necessary to make them comparable with those of the current year.

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Mar 31, 2013

A) Other usual and necessary provisions.

b) Government of India subscribed to 1,37,08,019 Equity Shares of Rs. 10/- each of the Bank at a price of Rs. 72.95 (including a premium of Rs. 62.95) per share aggregating to Rs. 99.99 crore through preferential allotment in accordance with regulation 76(1) of SEBI (ICDR) Regulations, 2009. The shareholders approved the issue by a special resolution at the Extraordinary General Meeting of the Bank convened for the purpose on 12th March, 2013. The Bank completed the allotment on 13th March 2013.

c) During the year ended 31st March, 2013 the Bank has raised Rs. 300 Crores through Perpetual Tier-I Bonds on private placement basis through issuance of unsecured subordinated non-convertible listed Bonds.

1.1.1 Sale and Transfers to/from Held to Maturity (HTM) Category

(a) Securities having book value of Rs. 568.00 Crores (Previous year: 541.74 Crores) was sold during the year from HTM Category.

(b) The bank shifted at the beginning of the year, with the approval of the board of directors, securities having face value of Rs. 1476.00 Crores (Previous year: Rs. 1745.88 Crores) at lower of book value or market value, scrip wise, from Available For Sale (AFS) to HTM Category which is in accordance with RBI Guidelines in this regard.

(c) There was no other transfer to / from HTM Category during the year.

(d) The value of sales and transfer of securities to/ from HTM Category did not exceed 5 % of book of Investment in HTM Category at the beginning of the year.

1.1.2 Disclosures on risk exposure in derivatives: -

A) Qualitative Disclosures

a. The Bank has undertaken derivative transactions in currency futures for tradingiarbitrage) & hedging purposes.

b. Risk management organization of derivative transactions has been segregated into three functional areas namely, i) Front- Office for undertaking transaction; ii) Mid-Office for risk management and reporting; and iii) Back-Office for settlement, reconciliation and accounting.

c. The risk measurement, reporting and monitoring function is undertaken by the mid-office. The Board of Directors is the apex body to oversee the overall risk measurement, monitoring and reporting functions of the Bank including derivative transactions through Risk Management Committee of the Board (RMCBOD). The bank also internally monitors risk management through in-house Risk management Committee, Asset Liability Committee (ALCO), Operational Risk Management Committee (ORMC) and Internal Committee on Investment (ICI).

d. Identification of underlying hedge items for hedging / mitigating credit risk, operational risk and market risk arising out of derivative transactions is done in accordance with the Board approved Integrated Treasury Policy . The customer related derivative transactions are covered with counter party banks, on back to back basis for identical amounts and tenure and the bank does not carry market risk for such transactions. However, during the year under review, bank has not used any derivative product to hedge its own portfolio.

e) The Integrated Treasury Policy prescribes accounting for hedge and non-hedge transactions, income recognition and valuation procedure for outstanding contracts. The income recognition is done as per AS-11 on "The Effects of changes in Foreign exchange Rates " and the guidelines issued by RBI/FEDAI from time to time. The integrated Treasury Policy also prescribes various limits such as Client Level Limits, Trading Member Level Limits, Net Open Position Limits for credit risk mitigation.

1. The above disclosures, including sacrifice, are as compiled and certified by the Bank''s Management.

2. The quantum of economic sacrifice during the year on the restructured assets has been calculated by the NPV Method as on 31.03.2012 for Standard Assets of 10 lacs and above and for NPA of Rs. 1 crore and above. For the remaining assets, economic sacrifice has been provided @ 5% of outstanding balance.

3. Figures in brackets represent Previous Year''s figures.

1.2.1 Risk Category-wise Country Exposure

The Bank has analyzed its risk exposure to various countries as on 31st March, 2013 and such exposure is less than the threshold limit of 1% of the total assets of the Bank. In terms of RBI guidelines, no provision is required for this exposure.

1.2.2 Details of Single Borrower Limit (SBL)/ Group Borrower Limits (GBL) exceeded by the Bank

During the Financial Year 2012-13, the Bank has not exceeded the prudential exposure limit in respect of lending to Group Borrower Limit and Single Borrower limit.

1.2.3 Unsecured Advances :

Total Advances against intangible securities such as charge over the rights, licenses, authority, etc. amounted to Rs. 1369.78 Crores (Previous year Rs. 1292.09 crores). The Estimated Value of such intangible collaterals amounted to Rs. 1684.83 Crores (Previous year Rs. 1563.43 Crores)

1.3 Penalty imposed by RBI

During the year no penalty was imposed by RBI

2. Disclosures as per Accounting Standards (AS) in terms of RBI guidelines:

2.1 AS 5 - Net Profit or Loss for the period, prior period items and changes in the Accounting Policies

There were no material prior period income/expenditure items requiring disclosure under AS-5.

2.2 AS 9 - Revenue Recognition

Revenue is recognized as per the Accounting Policies disclosed in Schedule 17.

2.3 AS 15 - EmployeesBenefits

In terms of the provisions of RBI Circular no.DBOD.BP.BC.80/21.04.018/2010-11dated 9th February, 2011 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits, Rs. 447.31crore is being amortized over a period of five years with effect from Financial Year 2010-11. Accordingly Rs.89.46 crore has been charged to the Profit and Loss account being the proportionate amount for the year ended 31st March, 2013 (Rs. 89.46 crore for the previous year). The unamortized liability as at 31st March,2013 stands at Rs. 178.93 crore (Previous Year Rs.268.39 crore).

2.4 AS 17 - Segment Reporting

The Banks operations are classified into two primary business segments viz. "Treasury Operations" and "Banking Operations". The relevant information is given hereunder in the prescribed format:

2.5 Related Party Disclosures (AS-18)

2.5.1 Names of the related parties and their relationship with the Bank:

Associates (Regional Rural Bank)

i. Assam Gramin Vikash Bank

ii. Bangiya Gramin Vikash Bank

iii. Manipur Rural Bank

iv. Tripura Gramin Bank

2.5.2 Key Management Personnel

(i) Mr. Bhaskar Sen. - Chairman and Managing Director

(ii) Mr.S.L.Bansal - Executive Director

(iii) Mr. Deepak Narang - Executive Director

(iv) Mr. Sanjay Arya - Executive Director

3.1 Disclosure of Letter of Comforts (LoCs) issued by the Bank

a) During the current financial year the Bank has issued 368 nos LoCs Previous Year 118 amounting to Rs.3168.00 crore (Previous Year Rs. 806.00 crore) for providing Buyers Credit facility.

b) There are 231 nos (Previous Year 112) of outstanding LoCs as on 31.03.2013 amounting to Rs. 2299.91 crore (Previous year Rs. 493.17 crore).

3.2 Provision Coverage Ratio (PCR)

The provision coverage ratio (PCR) for the Bank as on 31st March 2013 is 62.50 %, which is calculated taking into account the total technical write offs made by the Bank.

3.3 a) Registration formalities are pending in case of one property costing Rs. 1.88 crore, WDV as on 31.03.2013 Rs. 1.28 crores (Previous Year Rs. 1.24 crore).

b) Premises include leased properties amounting to Rs. 29.49 crore (net of amortization) (Previous Year: Rs. 15.53 crore).

3.4 Disclosure under Accounting Standard 12 (AS 12)

During the year 39,63,484.75 has been received in the form of subsidies/grants/incentives from RBI and State Government as below:

3.5 The Board of Directors has recommended dividend of 2.10 (21%) per equity share for the year ended 31st March 2013 subject to approval of the shareholders.

4. Previous Year''s figures have been regrouped / rearranged wherever considered necessary to make them comparable with those of the current year.

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Mar 31, 2012

A) Life Insurance Corporation of India (LIC) subscribed to Rs1,65,78,299 Equity Shares of Rs10/- each of the Bank at a price of Rs79.74 per share aggregating to Rs132.20 crore through preferential allotment under Chapter VII of SEBI (ICDR) Regulations, 2009. The shareholders approved the issue by a special resolution at the Extraordinary General Meeting of the Bank convened for the purpose on 27th March 2012.

b) During the year ended 31st March 2012, the Bank has also raised Rs200 Crore as lower Tier-II Capital on private placement basis through issuance of unsecured subordinate redeemable non-convertible Bonds.

1.1.1 (a) Banks SLR investments under 'Held to Maturity' (HTM) category was Rs18577.65 crore (Previous Year: Rs16126.68 crore) representing 21.94% (Previous Year : 21.03%) of Demand and Time Liability (DTL) as against ceiling of 25% (Previous Year: 25%) prescribed by RBI.

(b) During the Year ended 31.03.2012 the Bank has shifted Rs1745.88 crore (Face Value) (Previous Year: Rs3536.08 crore) of investments at Book Value (BV) from AFS to HTM category in terms of RBI guidelines and has provided depreciation of Rs35.78 crore (Previous Year: Rs130.29 crore).

1.1.2 Disclosures on risk exposures in derivatives:

A) Qualitative Disclosures

The Bank has undertaken derivative transactions in currency futures for trading (arbitrage) & hedging purposes.

a. Risk management organization of derivative transactions has been segregated in to three functional areas namely, i) Front Office (for undertaking transaction); ii) Mid-Office (for risk management and reporting) and iii) Back Office (for settlement, reconciliation and accounting).

b. The risk measurement, reporting and monitoring function is undertaken by the mid-office. The Board of Directors is the apex body to oversee the overall risk measurement, monitoring and reporting functions of the Bank including derivative transaction through Risk Management Committee of the Board (RMCBOD). The bank also internally monitors risk management through in-house Risk management Committee, ALCO, Operational Risk Management Committee (ORMC) and Internal Committee on Investment (ICI).

c. The Board approved integrated Treasury Policy prescribes identification of underlying hedge items for hedging /mitigating credit risk, operational risk and market risk arising out of derivative transactions. The customer related derivative transaction are covered with counter party banks, on back to back basis for identical amounts and tenure and the bank does not carry market risk for such transactions. However, during the year under review, bank has not used any derivative product to hedge its own portfolio.

d. The policy prescribes accounting for hedge and non-hedge transactions, income recognition and valuation procedure for outstanding contracts. The income recognition is done as per (AS-11) on "The Effects of changes in Foreign exchange Rates" and the guidelines issued by RBI / FEDAI from time to time. The integrated Treasury Policy also prescribes various limits such as Client Level Limits, Trading Member Level Limits, Net Open Position Limits for credit risk mitigation.

1. The above disclosures, including sacrifice, are as compiled and certified by the Bank's Management.

2. The quantum of economic sacrifice during the year on the restructured assets has been calculated by the NPV Method as on 31.03.2012 for Standard Assets of Rs10 lacs and above and for NPA of Rs1 crore and above. For the remaining assets, economic sacrifice has been provided @ 5% of outstanding balance.

3. Figures in brackets represent Previous Year's figures.

1.2.1 Risk Category-wise Country Exposure

The Bank has analyzed its risk exposure to various countries as on 31st March, 2012 and such exposure is less than the threshold limit of 1% of the total assets of the Bank. In terms of RBI guidelines, no provision is required for this exposure.

1.2.2 Details of Single Borrower Limit (SBL)/ Group Borrower Limits (GBL) exceeded by the Bank

During the FinancialYear2011-12, the Bank has not exceeded the prudential exposure limit in respect of lending to Group Borrower but the bank has exceeded the Single Borrower limit in one account, the details of which are as under

1.3 During the year no penalty was imposed by RBI 2. Disclosures as per Accounting Standards (AS) in terms of RBI guidelines:

2.1 Net Profit or Loss for the period, prior period items and changes In the Accounting Policies (AS-5)

There were no material prior period income/expenditure items requiring disclosure underAS-5.

2.2 Revenue Recognition (AS-9)

Revenue is recognized as per the Accounting Policy disclosed in Schedule 17.

2.3 Employees Benefits (AS-15)

In terms of the provisions of RBI Circular no.DBOD. BP.BC.80/2L04.018/2010-11dated 9th February, 2011 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits, Rs447.31 crore is being amortized over a period of five years with effect from Financial Year 2010-11. Accordingly Rs89.46 crore has been charged to the Profit and Loss account being the proportionate amount for the year ended 31st March, 2012 (Rs89.46 crore for the previous year). The unamortized liability as at 31st March,2012 stands at Rs268.39 crore (Previous Year Rs357.85 crore).

2.4 Segment Reporting (AS-17)

The Banks operations are classified into two primary business segments viz. "Treasury Operations" and "Banking Operations". The relevant information is given hereunder in the prescribed format:

Part B: Geographical Segment - Since the Bank does not have any overseas branch, reporting under geographical segment is not applicable.

2.5 Related Party Disclosures (AS-18)

2.5.1 Names of the related parties and their relationship with the Bank:

Associates (Regional Rural Bank)

i. Assam Gramin Vikash Bank

ii. Bangiya Gramin Vikash Bank

iii. Manipur Rural Bank

iv. Tripura Gramin Bank

2.5.2 Key Management Personnel

(i) Mr. Bhaskar Sen. - Chairman and Managing Director

(ii) Mr.S.L.Bansal - Executive Director*

(iii) Mr. Deepak Narang - Executive Director **

Remuneration Paid to Key Management Personnel:

2.6. 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:

i) Future lease rents and escalation in the rent are determined on the basis of agreed terms.

ii) At the expiry of the initial lease term, generally the bank has an option to extend the lease for a further pre determined period.

2.7 Consolidated Financial Statement (AS-21)/ Accounting for Investments in Associates in Consolidated Financial Statements (AS-23)

The Bank does not have any subsidiary and as such,AS-21 andAS-23 are not applicable.

2.8. Impairment of Assets (AS-28)

There is no indication of any material impairment of fixed assets and consequently no provision is required.

2.9. Provisions, Contingent Liabilities and Contingent Assets (AS-29)

Movements in significant Provisions have been disclosed at the appropriate places in the Notes forming part of the accounts.

3.1 Disclosure of Letter of Comforts (LoCs) issued by the Bank

a) During the current financial year the Bank has issued 189 nos LoCs amounting to Rs806.00 crore for providing Buyers Credit facility.

b) There are 112 nos. of outstanding LoCs as on 31.03.2012 amounting to Rs493.17 crore.

3.2 Provision Coverage Ratio (PCR)

The provision coverage ratio (PCR) for the Bank as on 31.03.2012 is 69.15 %, which is calculated taking into account the total technical write offs made by the Bank.

3.3 a) Registration formalities are pending in case of one property costing Rs1.88 crore, WDV as on 31.03.2012 Rs1.24 crore (Previous Year Rs 1.31crore).

b) Premises include leased properties amounting to Rs15.53 crore (net of amortization) (Previous Year: Rs17.43 crore).

3.4 The Board of Directors has recommended dividend of Rs2.40 (24%) per equity share for the year ended 31st March 2012 subject to approval of the shareholders

4. Previous Year's figures have been regrouped / rearranged wherever considered necessary to make them comparable with those of the current year.

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Mar 31, 2010

1. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

As per the Accounting Standard 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 when a reliable estimate of die amount of die obligation can be made.

Contingent Assets are not recognized in the Financial Statements since tiiis may result in the recognition of income that may never be realized.

1 (a) i) As per Government of India letter no. 11/25/2005- BOA dated 07/07/09, the Government has approved the restructuring of paid-up equity capital of the Bank by return of an amount of Rs. 1266.00 Crores to the Government of India and simultaneously infusion of this amount in the Capital Reserve of the Bank during the Year 2009-10, thereby reducing the paid-up capital of die Bank to Rs. 266.43 Crores.

ii) During the current Year, die Bank has come out with a Initial Public Issue of 500,00,000 Equity Shares of Rs. 10/- each at a price of Rs. 66/- per Share for Non-Institutional & QIB bidders & Rs. 63/- per Share for retail individual bidders & eligible employees. Accordingly, Equity Share Capital of the Bankhas increased by Rs.50.00 Crores to Rs. 316.43 Crores & Share Premium Account has been credited by Rs. 275.15 Crores. The Public Issue expenses of Rs 13.44 Crores are adjusted against Share Premium received in accordance with the Accounting Policy of the Bank.

(b) There are current and old unadjusted entries outstanding in Inter Branch Accounts and NOSTRO Accounts, the reconciliation/ adjustment of which is under progress.

In the opinion of the management, consequential impact of the above on accounts will not be material.

(c) As per RBI Circular No. DBOD.BP.BC. No.133/21.04.018/2008-09 dated 11.05.09, the amount credited to Profit and Loss Account (on account of write-off of entries in Blocked/Unclaimed Deposits Accounts) should be appropriated to die General Reserve and will not be available for declaration of dividend. An amount of Rs. 102,66,808 has been booked as profit on write-back entries in Blocked Accounts and Unclaimed Deposits Accounts upto a value of Rs. 119763/- (USD 2500) originating upto 31.03.02. No claim has been received in respect of these entries till 31.03.10.

2. a) Banks SLR investments under Held to Maturity

(HTM) category was Rs.13310.06 Crores (Previous Year : Rs.11429.30 Crores) representing 19.11% (Previous Year 21.50%) of Demand and Time Liability (DTL) as against ceiling of 25% (Previous Year : 25%) prescribed by RBI

b) During the Year ended 31.03.2010 the Bank has shifted Rs.1171.17 Crores (Previous Year: Rs.866.70 Crores) of investments at Book Value (BV) from AFS to HTM category in terms of RBI guidelines and has provided depreciation of Rs. 6.45 Crores (Previous Year: Rs. 46.56 Crores).

3. Based on new agreement reached between IBA on behalf of member banks with All India Unions of workmen/officers on 27/04/10 towards increment of 17.5% w.e.f. November, 2007, a provision of Rs.264 crores has been made on estimated basis upto March, 2010 of which Rs. 194 crores was made during the current year.

4. a) Premises include properties of Rs.1.38 Crores (Previous Year: Rs.1.45 Crores) net of depreciation, cost: Rs. 1.88 Crores (Previous Year: Rs.1.88 Crores) in respect of which registration formalities are pending.

b) Premises include leased properties amounting to Rs.18.22 Crores (net of depreciation) (Previous Year: Rs.19.64 Crores).

c) Depreciation over and above the normal depreciation attributable to revalued premises is set off against Revaluation Reserve.

5.3.3 Disclosure on risk exposures in derivatives:

a. Qualitative Disclosure

The Investment Policy for using Derivative Instruments to hedge Banks assets / liabilities has been approved by the Board of Directors. For transactions in Rupee Derivatives, there are defined delegated powers in the Investment Policy and accordingly required reporting is done to Internal Committee for Investment / Board of Directors. A well defined Risk Management Policy approved by the Board of Directors is in place. The Bank entered into Interest Rate Swap (IRS) deals only for hedging purpose.

No Derivative transaction was undertaken in Foreign Exchange.

b. Quantitative Disclosure

The Bank enters into derivative contracts such as Interest Rate Swaps (IRS) to hedge on Balance Sheet Assets. The notional principal value of SWAPs outstanding as on 31.03.2010 was Rs.Nil (against Previous Year Rs.NIL). The fair value of SWAPs as on 31.03.2010 was Rs.Nil (Previous Year Rs. NIL).

5. Disclosure of Penalties imposed by RBI

Penalty of Rs.0.12 Crores (Previous Year Rs. NIL) has been imposed by RBI under the provision of Section 46(4) of the Banking Regulation Act,1949, during Year ended 31st March, 2010.

5.2 Fees/Remuneration received in respect of Bancassurance business.

6. Disclosure as per Accounting Standards (AS) notified under the Companies (Accounting Standards Rules,2006) and in terms of RBI guidelines:

6. Cash Flow Statement (AS-3)

The Cash Row Statement for the Year ended 31/03/10 is annexed separately. Cash and Cash Equivalents include Cash in hand, balances with Reserve Bank of India, balances with other Banks and money at call and short notice.

6.1 Net Profit or Loss for the period, Prior Period items and changes in Accounting Policies (AS-5)

There is no material Prior Period items included in the Profit & Loss Account.

6.2 Revenue Recognition (AS-9)

Revenue is recognized as per the Accounting Policy in this regard disclosed elsewhere in the Schedule.

6.3 Employees Benefits(AS-15)

a) The Bank has adopted Accounting Standard 15(Revised) "Employees Benefit", with effect from Is April 2007.

Pursuant to the adoption, the transitional obligations of Rs.413.79 Crores have been recognized. The said amount represents the difference between the liability in respect of various employees benefits determined under AS-15 (Revised) as on 1st April, 2007 and the liability as on that date as per AS-15 prior to the revision. The above amount is being wntten off over a period of 5 Years. During the Year ended 31st March, 2010, Rs. 82.48 Crores has been wntten off and the balance amount of Rs. 164.93 Crores will be written off over a period of 2 Years.

b) The summarized position of post-employment benefits and long term employee benefits recognized in the Profit & Loss Account and Balance Sheet as required in accordance with Accounting Standard-15 (Revised) are as under :-

6.4 Segment Reporting (AS-17)

The Banks operations are classified into two primary business segments viz. "Treasury Operations" and "Banking Operations". The relevant information is given hereunder m the prescribed format:

Pricing of Inter-Segmental Transfers:

Banking operations is a primary resource mobilizing unit and Treasury Operations compensates the former for funds lent by it taking into consideration the average cost of deposits.

Part B: Geographical Segment — Since the Bank does not have any overseas branch, reporting under geographical segment is not applicable.

6.5 Related Party Disclosures (AS-18)

Names of the Related parties and their relationship with the Bank:

6.6.1 Associates(Regional Rural Bank)

(ii) Assam Gramin Vikash Bank

(iii) Bangiya Gramin Vikash Bank

(iv) Manipur Gramin Bank

(v) Tripura Gramin Bank

6.6.2Key Management Personnel

(i) Mr. Bhaskar Sen Chairman and Managing Director (lomed on 01.03.2010)

(ii) Mr. S.C.Gupta Ex - Chairman and Managing Director (Retired on 28.02.2010)

(iii) Mr. T.M.Bhasin Executive Director

6.3 Consolidated Financial Statement (AS-21)/ Accounting for Investments in Associates in Consolidated Financial Statements (AS-23)

The Bank does not have any subsidiary and as such AS-21 and AS-23 are not applicable.

6.4 Intangible Assets (AS-26)

Computers include intangible assets comprising of software, the details of which are as follows:

6.5 Impairment of Assets (AS-28)

The Bank has identified that diere is no material impairment of fixed assets and as such no provision is required as per the Accounting Standard (AS-28) notified under the Companies (Accounting Standard Rules,2006).

6.6 Provisions, Contingent Liabilities and Contingent Assets (AS-29)

Movements in significant Provisions have been disclosed at the appropriate places in the Notes forming part of the accounts.

7.0 Disclosure of complaints and unimplemented awards of Banking Ombudsman

a) Customer Complaints

(a) No, of complaints pending at the 113 beginning of the Year (1.4.2009)

(b) No. of complaints received during 1931 the Year (1.4.2009 to 31.3.2010)

(c) No. of complaints redressed during 1940 the Year(1.4.2009 to 31.3.2010)

(d) No. of complaints pending at the 104 end of the Year(31.3.2010)

7.1 Disclosure of Letter of Comforts (LoCs) issued by the Bank

a) During the current financial year the Bank has issued 108 nos LoCs amounting to Rs.313.20 Crores for providing Buyers Credit facility.

b) There are 110 nos. of outstanding LoCs as on 31.03.2010 amounting to Rs.320.30 Crores.

7.2 Concentration of deposits, Advances, Exposures and NPAs

( As compiled by the management and relied upon by the auditors):

7.3 a) Government of India has notified Relief Scheme namely "Agricultural Debt Waiver and Debt Relief Scheme,2008" for giving debt waiver to marginal and small farmers and relief to other farmers who have availed direct agricultural loans. Bank has made full provision of inadmissible interest, expenses and differential amount of eligible claim. Under Agricultural Debt Waiver Scheme of the Government of India, the Bank made a claim for Rs 211.19 Crores (Previous Year Rs. 211.19 Crores) and during the Year an additional claim through redressal of grievance was admitted for Rs. 0.03 Crores. Out of the total sum of Rs.211.22 Crores, till date Rs 136.75 Crores has been received from the Government of India. The remaining balance of Rs 74.47 Crores is being shown as Advance.

b) In respect of Debt Relief Scheme, Bank has made a provision of Rs. 0.49 Crores against loss in Present Value Terms on amount receivable from eligible farmers.

8. Previous Years figures have been regrouped / rearranged wherever considered necessary.

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Mar 31, 2009

CONTINGENT LIABILITIES (Rupees in thousand)

As on 31.3.2009 As on 31.3.2008

I. Claims against the bank not acknowledged as debts 8,37,64 3,10,26

II.Liability for partly paid investments 37,72,38 12,13

III: liability on account of outstanding forward exchange contracts 2305,07,03 3156,49,24

IV. Guarantees given on behalf of constituents (net of cash margin)

a) In India 1648,33,63 1414,55,37

b) Outside India 286,01,44 226,57,31

V. Acceptances, endorsements and other obligations (net of cash margin) 908,89,67 780,47,52

VI. Other items for which the Bank is contingently liable 89,96,84 1,96,58

TOTAL 5284,38,63 5583,28,41

1.a) There are current and old unadjusted entries outstanding in Inter Branch Accounts, balances with Reserve Bank of India and other Banks and NOSTRO Account, the reconciliation of which is under progress.

In the opinion of the management, consequential impact of the above on accounts will not be material.

b) ATM settlement account balances are under reconciliation.

2.a) Banks SLR investments under Held to Maturity (HTM) category was Rs.l1429.30 Crore (Previous year :Rs.l0791.47 Crore) representing 21.50% (Previous year : 23.01%) of Demand and Time Liability (DTL) as against ceiling of 25% (Previous year: 25%) prescribed by RBI.

b) During the year the Bank has shifted Rs.866.70 Crore (Previous year: Rs.886.74 Crore) of investments at Book Value (BV) from AFS to HTM category in terms of RBI guidelines and has provided depreciation of Rs. 46.56 Crore (Previous year: Rs.91.10 Crore).

3.a) During the year the Bank has appropriated Rs. 37.50 Crore being the available Net Profit (Previous year: Rs. 79.74 Crore) representing 20.30% as against stipulated 25% (Previous year: 25%) of the net profit to the Statutory Reserve after transferring Rs.147.21 Crore (Previous year: Rs. 12.78 Crore) to the Capital Reserve being the profit on sale of HTM securities. Out of the balance of Rs NIL (Previous year: Rs. 226.43 Crore), Rs. NIL (Previous Yean Rs.45.97 Crore) has been provided towards dividend payable to the Government of India, tax on dividends Rs.NIL (Previous Year: Rs.7.81 Crore) and appropriated the balance of Rs.NIL (Previous Year.Rs. 172.64 Crore) to Revenue and other reserves.

b) Excess Income Tax provision of Rs.260.56 Crore had been written back last year. This amount was arrived at based on the concluded assessment and appeal proceedings including pending appeals in similar matters for other assessment years. The amount referred above was worked out after considering the relevant provisions of the Income Tax Act,1961, the favourable judicial pronouncements and the legal opinions obtained. Out of aforesaid Rs.260.56 Crore, claims for Rs.88 Crore are pending at present.

4.a) . Premises include properties of Rs.l.45 Crore (Previous year: Rs. 1.53 Crore) net of depreciation, cost:Rs.l.88 Crore (Previous year: Rs.1.88 Crore) in respect of which registration formalities are pending. remises include leased properti?s amounting to Rs.19.64 crore (net of depreciation.) (Previous year Rs. 20.44 Crore). c) Depreciation over and above the normal depreciation attributable to revalued premises is set off against Revaluation Reserve.

5. Long term employee benefits (benefits which are payable after the end of twelve months from the end of the period in which the employees render service namely sick leave, casual leave, medical benefit and leave fare concession and post retirement benefits namely gratuity, pension and leave encashment are measured on a discounted basis under the Projected Unit Credit Method on the basis of annual third parry actuarial valuations.

6 In respect of employees who have opted for Provident Fund Scheme, matching contribution is made to a recognized Trust. For others who have opted for Pension Scheme, contribution to Pension Fund is based on actuarial valuation at the year-end.

7. Long Term employee benefits recognized in the balance sheet represent the present value of the obligation as adjusted for unrecognized past service cost, if any, and as reduced by the fair value of plan assets, wherever applicable and actuarial gain / loss to the extent recognized in Profit & Loss Account.

8. The transitional liability in respect of long term employee benefits is recognized as an expense on a straight line basis over a period of five years.

9. STATIONERY

The stock of stationery in hand as on the closing date is accounted for at cost.

10. TAXATION:

a. Provision for taxation is made on the basis of estimated tax liability. ___

b. Deferred tax liability/asset is recognized in terms of Accounting Standard 22.

11. IMPAIRMENT OF ASSETS: Impairment Losses (if any) on Fixed Assets (including revalued assets) are recognized in accordance with the Accounting Standard 28 ("Impairment of Assets").

12. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

As per the Accounting Standard 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 when a reliable estimate of the amount of the obligation can be made. Contingent Assets are not recognized in the Financial Statements since this may result in the recognition of income that may never be realized.

b) Disclosure of Penalties imposed by RBI

No penalty has been imposed by RBI during the year.

c) Disclosure as per Accounting Standard (AS) issued by ICAI in terms of RBI guidelines:

i) Net Profit or Loss for the period, Prior Period items and changes in Accounting Policies (AS-5) During the year, there has been no change in Accounting Policy followed by the Bank except as referred to at para 7.6 and 8 hereunder. There are no material Prior Period items included in the Profit & Loss Account.

d) Revenue Recognition (AS-9)

Revenue is recognized as per the Accounting Policy in this regard disclosed elsewhere in the Schedule. iii) Employees Benefits

a) The Bank has adopted Accounting Standard 15(Revised) "Employees Benefit" issued by the Institute of Chartered Accountants of India, with effect from 1st April 2007.

Pursuant to the adoption, the transitional obligations of Rs.413.79 crore have been recognized. The said amount representing the difference between the liability in respect of various employees benefits determined under AS-15 (Revised) as on 1st April, 2007 and the liability as on the date as per AS-15 prior to the revision.

b) The summarized position of post-employment benefits and long term employees benefits recognized in the Profit & Loss Account and Balance Sheet as required in accordance with Accounting Standard-15 (Revised) are is under:

iv) Segment Reporting (AS-17)

The Banks operations are classified into two primary business segments viz. Treasury Operations and "Banking Operations". The relevant information is given in the prescribed format:

vi) Consolidated Financial Statement (AS-21)/ Accounting for Investments in Associates in Consolidated Financial Statements (AS-23) The Bank does not have any subsidiary and as such no consolidation is required.

ix) Impairment of Assets (AS-28)

The Bank has identified that there is no material impairment of fixed assets and as such no provision is required as per the Accounting Standard (AS-28) issued by the ICAI.

x) Provisions, Contingent Liabilities and Contingent Assets (AS-29)

Movement in significant Provisions have been disclosed at the appropriate places in the Notes forming part of the accounts.

13 Disclosure of Letter of Comforts (LOCs) issued by the Bank

The Bank had an outstanding of 24 Nos. of Letter of Comforts involving aggregate amount of Rs. 152.84 crore as on March 31,2009.

14 Pursuant to RBI instructions as contained in Circular DBOD No. BP.BC.No. 37/21.04.132/2008-09 dated August 27,2008 and the subsequent Circulars, Bank has allowed restructure in 30709 No. of Standard Accounts involving a total sum of Rs. 1640.43 crore and 44 nos. of NPA accounts involving a total sum of Rs 96.05 crore for which provision of Rs 41.17 crore made on account of diminution in Fair value. Besides, 318 applications involving Rs. 18.82 crore were under process as on March 31, 2009 which have been treated as Standard in terms of RBI Circular DBOD.No.BP.BC. No.105 / 21.04.132 / 2008-09 dated February 04, 2009.

15 Consequent to change in accounting policy in respect of interest on Matured Term Deposits, interest amounting to Rs 21.66 crores has been provided during the year, resulting in interest expenditure " being higher by this amount.

16 The Bank has made an adhoc provision of Rs 70 crores towards wage revision pending negotiation which has been considered adequate by the Management.

17. Under Agricultural Debt Waiver Scheme of the Government of India, the Bank made a claim for Rs 211.19 crore. Out of the aforesaid sum, till date Rs 86.59 crore, fust instalment has been received from the Government of India. The remaining balance of Rs 124.60 crore is being shown as Advance. Interest/ charges of Rs 3.52 crore has been drawn from Floating Provisions.

18 Sub-ordinated Debts : Rs 250 crores (previous year Rs 575 crore) was issued as Unsecured Redeemable Bonds under Tier-II Capital , and the amount is shown in "Other Liabilities & Provisions" in "Schedule 5" of the Balance Sheet.

19. Previous years figures have been regrouped / rearranged wherever considered necessary.