UNION BANK OF INDIA

NSE : UNIONBANKBSE : 532477ISIN CODE : INE692A01016Industry : Bank - PublicHouse : PSU
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NSE168.15-2.45 (-1.44 %)
PREV CLOSE(Rs.)170.60
OPEN PRICE(Rs.)171.00
BID PRICE (QTY) 0.00 (0)
OFFER PRICE (QTY) 168.15 (642)
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Notes of Account

Year End: March 2016

Schedule 1- Significant Accounting Policies

1 Accounting Convention

The financial statements are brpared under the historical cost convention, on the accrual basis of accounting on going concern basis, unless otherwise stated and conform in all material aspects to Generally Accepted Accounting Principles (GAAP) in India, which comprise applicable statutory provisions, regulatory norms/guidelines brscribed by the Reserve Bank of India (RBI), Banking Regulation Act 1949, Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI), and the practices brvalent in the banking industry in India. In respect of foreign offices, statutory provisions of practices brvailing in respective foreign countries are complied with.

2 Use of Estimates

The brparation of financial statements requires the management to make estimates and assumptions considered in the reported amount of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and the expenses during the reporting period. Management believes that the estimates wherever used in the brparation of the financial statements are prudent and reasonable. Difference between the actual results and estimates is recognized in the period in which the results are known/ materialized.

3 Revenue Recognition

3.1 Income and Expenditure is generally accounted for on accrual basis unless otherwise stated.

3.2 Income from Non-Performing Assets (NPAs) is recognized to the extent realized as per the prudential norms brscribed by RBI.

3.3 Bank commission, exchange and brokerage earned, rent on Safe Deposit Lockers (SDV), commission on biometric cards, income from Aadhaar cards etc. are accounted for on realization basis.

3.4 Income (other than interest) on investments in “Held to Maturity” (HTM) category acquired at discount to the face value is recognized as follows:

a) On interest bearing securities, it is recognized only at the time of sale / redemption.

b) On zero coupon securities, it is accounted for over the balance tenor of the securities on a constant yield basis.

3.5 Dividend is accounted on an accrual basis where the right to receive the same is established.

4 Cash Flow Statements

Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and short notice.

5 Investments

5.1 Classification

i) In conformity of the requirements in form A of the Third Schedule to the Banking Regulations Act, 1949, Investments are classified as under:

a) Government Securities

b) Other Approved Securities

c) Shares

d) Debentures & Bonds

e) Investments in Subsidiaries & Joint Ventures, and

f) Other Investments

The Investment portfolio of the Bank is further categorized in accordance with the RBI guidelines into:

a) Held to Maturity (HTM)

b) Available for Sale (AFS)

c) Held for Trading (HFT)

5.2 Basis of Valuation

As per RBI guidelines, the following principles have been adopted for the purpose of valuation:

i) Securities held in “HTM” – at acquisition cost.: The excess of acquisition cost over the face value is amortized over the remaining period of maturity and in case of discount; it is not recognized as income.

ii) Investment in Regional Rural Banks are valued at carrying cost.

iii) Investments in Subsidiaries and Joint Ventures are valued at carrying cost

iv) Diminution other than temporary, if any, in valuation of such investments is provided for.

v) Securities held in “AFS” and “HFT” categories are valued classification wise and scrip wise and net debrciation, if any, in each classification is charged to Profit and Loss account while net apbrciation, if any, is ignored.

5.3 Interbank REPO / Reverse REPO transactions are accounted for in accordance with extant RBI guidelines.

5.4 As per the extant RBI guidelines, the shifting of securities from one category to another is accounted for as follows:

5.4.1 From AFS / HFT categories to HTM category, at lower of book value or market value as on the date of shifting. Debrciation, if any, is fully provided for.

5.4.2 From HTM category to AFS / HFT category, ? If the security is originally placed at discount in HTM category, at acquisition cost/ book value If the security is originally placed at a brmium, at an amortized cost.

5.4.3 From AFS to HFT category and vice versa, at book value.

5.4.4 The securities so shifted are revalued immediately and resultant debrciation is fully provided for.

5.5 The non-performing investments are identified and debrciation/ provision is made as per the extant RBI guidelines.

5.6 Profit / Loss on sale of investments in any category is taken to the Profit and Loss account. However, in case of profit on sale of investments in “HTM” category, an equivalent amount (net of taxes and net of transfer to Statutory Reserves) is appropriated to the Capital Reserve account.

5.7 Commission, brokerage, broken period interest etc. on securities is debited / credited to Profit & Loss account.

5.8 As per the extant RBI guidelines, the Bank follows ‘Settlement Date’ for accounting of investments transactions.

6 Derivative Contracts

The Interest Rate Swap (IRS) which hedges interest bearing asset or liability are accounted for in the financial statements on accrual basis except the swap designated with an asset or liability that is carried at market value or lower of cost or market value. Gains or losses on the termination of swaps are recognized over the shorter of the remaining contractual life of the swap or the remaining life of the asset / liability.

i) Trading swap transactions are marked to market with changes recorded in the financial statements.

ii) In the case of option contracts, guidelines issued by Foreign Exchange Dealers Association of India (FEDAI) from time to time for recognition of income, brmium and discount are being followed.

7 Advances

7.1 Advances in India, are classified under four categories,

i.e. (a) Standard, (b) Sub-standard, (c) Doubtful and (d) Loss assets. Provisions required on such advances are made as per the extant prudential norms issued by the RBI. In respect of Advances made in overseas branches, Advances are classified in accordance with Prudential Norms brscribed by the RBI or local laws of the host country in which advances are made, whichever is more stringent.

7.2 Advances are stated net of specific loan loss provisions, counter cyclical provisioning buffer and provision for diminution in fair value of restructured advances and unrecovered interest held in sundry / claims received from Credit Guarantee Trust for Micro & Small Enterprises (CGTMSE)/Export Credit Guarantee Corporation (ECGC) relating to non-performing assets.

7.3 The general provision on standard advances is held in “Other Liabilities and Provisions” reflected in Schedule 5 of the balance sheet and is not considered for arriving at both net NPAs and net advances.
"

8 Fixed Assets and Debrciation

8.1 Premises and Other Fixed Assets are stated a cost, net of accumulated debrciation and accumulated impairment losses, if any. The cost comprises of purchase price less trade discounts and rebates, eligible borrowing costs and directly attributable costs of bringing the asset to its working condition for its intended use. Subsequent expenditure incurred on assets put to use is capitalized only when it increases the future benefits from such assets or their functional capability. Land and Buildings, if revalued are stated at revalued amount. The apbrciation on revaluation is credited to Revaluation Reserve and the debrciation provided thereon is deducted there from.

8.3 Application Software is capitalized and clubbed under intangible assets. Debrciation on computers and software forming an integral part of Computer Hardware and on ATM is provided on Straight Line Method at the rate of 33.33% as per the guidelines of RBI.

8.4 Debrciation on additions to assets made up to 30th September of the year is provided at full rate and on additions made thereafter, at half the rate.

8.5 Debrciation on brmises is provided on composite cost, wherever the value of land and buildings is not separately identifiable.

8.6 No debrciation is provided on assets sold / disposed off during the year.

8.7 Debrciation on leased assets and leasehold improvements is recognized on a straight-line basis using rates determined with reference to the primary period of lease.

9 Impairment of Assets

The carrying costs of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying cost of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value using a br-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. After impairment, debrciation is provided on the revised carrying cost of the asset over its remaining useful life. A brviously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have brvailed by charging usual debrciation, if there was no impairment.

10 Counter Cyclical Provisioning Buffer

The Bank has a policy for creation and utilization of Counter Cyclical Provisioning Buffer separately for advances and investments. The quantum of provision to be created is assessed at the end of each financial year. The counter cyclical provisions are utilized only for contingencies under extra ordinary circumstances specified in the policy with prior permission of the RBI.

11 Transactions involving Foreign Exchange

11.1 Accounting for transactions involving foreign exchange is done in accordance with AS 11, (The Effects of Changes in Foreign Exchange Rates), issued by the ICAI. As stipulated in AS 11, the foreign currency operations of the Bank are classified as

a) Integral Operations and

b) Non Integral Operations.

All Overseas Branches, Offshore Banking Units, Overseas Subsidiaries are treated as Non Integral Operations and domestic operations in foreign exchange and Rebrsentative Offices are treated as Integral Operations.

11.2 Translation in respect of Integral Operations

11.2.1 Income and Expenditure items are recognized at the exchange rates brvailing on the date of the transaction.

11.2.2 Foreign Currency Monetary and Non- Monetary Assets and Liabilities are translated at the closing spot rates notified by FEDAI at the end of each quarter.

11.2.3 Contingent liabilities on account of guarantees, acceptances, endorsements and other obligations are stated at the exchange rates notified by FEDAI at the close of the year.

11.2.4 The resulting exchange differences are recognized as income or expenses and are accounted through Profit and Loss Account

11.2.5 Forward exchange contracts are recorded at the exchange rate brvailing on the date of commitment. Outstanding forward exchange contracts are revalued at the exchange rates notified by FEDAI for specified maturities and at interpolated rates for contracts of ‘inbetween’ maturities. The resultant gains or losses are recognized in the Profit and Loss account.

11.3 Translation in respect of Non Integral Operations

11.3.1 Assets and Liabilities (including contingent liabilities) are translated at the closing spot rates notified by FEDAI at the end of each quarter

11.3.2 Foreign Exchange Spot and Forwards contingent liabilities outstanding as at the balance sheet date are translated at the closing spot and forward rates respectively notified by FEDAI and at interpolated rates for contracts of interim maturities.

11.3.3 Income and Expense are translated at quarterly average rate notified by FEDAI at the end of each quarter.

11.3.4 The resulting exchange differences are not recognized as income or expense for the period but accumulated in a separate account “Foreign Currency Translation Reserve” till the disposal of the net investment.

12 Employee Benefits

Retirement benefits in the form of provident fund are a defined contribution scheme. The contributions to the provident fund are charged to the Profit and Loss account for the year when the contributions are due. The Bank has no obligation, other than the contribution payable to the provident fund.

Gratuity liability, Pension fund and provision towards leave are defined benefit obligations, and are provided for on the basis of an actuarial valuation as per AS 15 (Revised) made at the end of each financial year, based on the projected unit credit method. Actuarial gains/losses are immediately taken to the Profit and Loss account.

The New Pension Scheme is applicable to employees who joined the Bank on or after 01.04.2010 is a defined contribution scheme. Bank pays fixed contribution at brdetermined rate and the obligation of the Bank is limited to such fixed contribution. The contribution is charged to Profit and Loss Account.

Employee benefits relating to employees employed at foreign offices are valued and accounted for as per the local laws/regulation of the respective countries.

13 Segment Reporting

The Bank recognizes the Business Segment as the Primary Reporting Segment and Geographical Segment as the Secondary Reporting Segment, in accordance with the RBI guidelines and in the compliances with the Accounting Standard 17 issued by ICAI.

Business Segments are classified into (a) Treasury operations, (b) Corporate and Wholesale Banking, (c) Retail Banking operations and (d) Other Banking operations.

14 Lease Transactions

Lease payments for assets taken on operating lease are amortized over the lease term. The properties taken on lease / rental basis are renewable / cancellable at the option of the Bank. The Bank’s liabilities in respect of disputes pertaining to additional rent / lease rent are recognized on settlement or on renewal.

15 Earnings per Share

Earnings per share are calculated by dividing the net profit or loss (after tax) for the year attributable to the equity share holders by the weighted average number of equity shares outstanding during the year.

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

16 Taxation

Provision for tax is made for both current and deferred taxes. Current tax is provided on the taxable income using applicable tax rates and tax laws. Deferred Tax Assets and Deferred Tax Liabilities arising on account of timing differences and which are capable of reversal in subsequent periods are recognized using the tax rates and the tax laws that have been enacted or substantively enacted till the date of the Balance Sheet.

Deferred tax assets are recognized only if there is virtual certainty of realization of such assets in future. Deferred tax assets/ liabilities are reviewed at each Balance Sheet date based on developments during the year.

17 Provisions, Contingent Liabilities and Contingent Assets

As per AS 29 (Provisions, Contingent Liabilities and Contingent Assets) issued by the ICAI, the Bank recognizes provisions only when it has a brsent 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.

18 Share Issue Expenses:

Share Issue expenses are charged to the Share Premium account.

A. DISCLOSURES IN TERMS OF THE RESERVE BANK OF INDIA GUIDELINES

1.1 CAPITAL

The Bank is subjected to Basel III capital adequacy guidelines stipulated by RBI with effect from April 1, 2013. The guidelines provide a transition schedule for Basel III implementation till March 31, 2019. As per guidelines, the Tier I capital is made up of Common Equity Tier I (CET I) and Additional Tier I. Basel III guidelines require the Bank to maintain minimum capital to Risk Weighted Assets ratio (CRAR) of 9% with minimum CET I of 5.5% and minimum Tier I CRAR OF 7% as at March 31, 2016. RBI vide the Circular RBI/2015-16/127 DBR.BP.BC. NO.31/21.04.018/2015-16 dated July 16, 2015 advised that commencing April 1, 2015, deposit placed with NABARD/ SIDBI/NHB on account of shortfall in priority sector targets should be included under schedule 11- Other Assets under the subheads ‘Others’ of the Balance Sheet. The exposure to RIDF of NABARD/SIDBI/NHB as of 31/03/2016 aggregating to Rs. 8076.88 crore (Previous year Rs.9631.25 crore) is included under other assets.

1.2.3 Sale and transfers to/from HTM Category

The Bank has not made sales and transfers to/from HTM category during the financial year 2015-16 exceeding 5 per cent of the book value of investments held in HTM category at the beginning of the year. During the year 2015-16, the Bank had carried out one time transfer of securities to/from HTM category with the approval of Board of Directors aggregating Rs. 765.48 crore and Rs. 5640.96 crore being face value and book value respectively. Bank in order to comply to the Reserve Bank of India circular no. RBI/2014-15/254 BDOD. No.BP.BC.42/21.04.141/2014-15 dated October 7, 2014 directing banks to reduce its total SLR securities held in the HTM category to below 22.00 per cent with effect from September 19, 2015 of the NDTL as on the last Friday of the second brceding fortnight, the Bank on September 5, 2015, transferred securities from HTM to AFS Category aggregating Rs. 3,323.95 crore (face value) and Rs. 3,155.62 crore (book value). The Bank during the FY 2015-16 sold securities worth Rs. 1,677.45 crore to Reserve Bank of India under br announced OMO auctions.

Note:

I. Interest rate swaps in Indian Rupees were undertaken for hedging Tier II Bonds.

II. The Bank has entered into Floating to Fixed or Fixed to Floating Interest Rate Swap transactions for trading during the year.

III. All underlying for hedge transactions are on accrual basis

1.3.3 Disclosures on risk exposures in derivatives

A. QUALITATIVE DISCLOSURE

a) The Bank deals in two groups of derivative transactions within the framework of RBI guidelines.

i) Over the Counter Derivatives

ii) Exchange Traded Derivatives

The Bank deals in Forward Rate Agreement, Interest Rate Swaps, Cross Currency Swap and Currency Options in Over the Counter Derivatives group.

In Exchange Traded Derivatives Group, the Bank trades in Currency Futures and Interest Rate Futures. The Bank is Trading & clearing member with three Exchanges viz.

National Stock Exchange (NSE), Bombay Stock Exchange (BSE) & Metropolitan Stock Exchange (MSEIL), on their Currency Derivative segment, as permitted by Reserve Bank of India. The Bank carries out proprietary trading in currency futures on these exchanges. The Bank has set up the necessary infrastructure for Front, Mid and Back office operations. Daily Mark to Market (MTM) and Margin obligations are settled with the exchanges as per guidelines issued by the Regulators.

The Bank trades in Interest Rate Futures on National Stock Exchange. The bank has necessary infrastructure for Front, Mid and Back office operations in place. Daily Mark to Market (MTM) and Margin obligations are settled with the exchanges as per guidelines issued by the Regulators. The Bank undertakes derivative transactions for proprietary trading/market making, hedging own balance sheet and for offering to customers, who use them for hedging their risks within the brvalent regulations. Proprietary trading/market making positions are taken in Rupee Interest Rate Swap, Currency Futures and Interest Rate Futures.

While derivative instruments brsent immense opportunity for making a quantum leap in noninterest income and also for hedging market risk, it exposes the Bank to various risks. The Bank has adopted the following mechanism for managing different risks arising out of derivative transactions.

In terms of the structure, operations in the Treasury Branch are segregated into following three functional areas, which are provided with trained officers with necessary systems support and their responsibilities are clearly defined.

I) Front Office — Dealing Room. Ensures Compliance with trade origination requirements as per Bank’s policy and RBI guidelines.

II) Mid-Office --- Risk Management, Accounting Policies and Management

III) Back Office- Settlement, Reconciliation, Accounting.

Mid Office monitors transactions in the trading book and excesses, if any, are reported to Risk management Department for necessary action. Mid Office also measures the financial risk for transactions in the trading book on a daily basis, by way of Mark to Market. Daily Mark to Market position is reported to Risk Management Department, for onward reporting of the risk profile to the Directors’ Committee on the Assets and Liability Management.

In case of corporate clients transactions are concluded only after the inherent credit exposures are quantified and approved in terms of approval process laid down in the Treasury Policy for customer appropriateness and suitability. The necessary documents like ISDA agreements are duly executed. The bank has adopted Current Exposure Method for monitoring credit exposures. b) Treasury Policy of the Bank lays down the types of financial derivative instruments, scope of usages, and approval process as also the limits like the open position limits, deal size limits, stop loss limits and counterpart exposure limit for trading in approved instruments.

Various Risk Limits are set up and actual exposures are monitored vis-à-vis the limits. These limits are set up taking in to account market volatility, business strategy and management experience. Risk limits are in place for risk parameters viz. PV01, stop loss, counterparty credit exposure. Actual positions are measured against these limits periodically and breaches if any are reported promptly. The Bank ensures that the Gross PV01 position arising out of all non option derivative contracts is within the 0.25% of net worth of the Bank.

c) The Bank also uses financial derivative transactions for hedging its own Balance Sheet Exposures. Treasury Policy of the Bank spells out approval process for hedging the exposures. The hedge transactions are monitored on a regular basis. The notional profit or loss calculated on Mark to Market basis, PV01 and VaR on these deals are reported to the Assets Liability Committee (ALCO) every month. Hedge effectiveness is the degree to which changes in the fair value or cash flows of the hedged items that are attributed to a hedged risk are offset by changes in the fair value or cash flows of the hedging instruments. This exercise is carried out periodically to ensure hedge effectiveness.

d) The hedged/un-hedged transactions are recorded separately. The hedged transactions are accounted for on accrual basis. All trading contracts are mark-to-market and resultant gross gain or loss is recorded in income statement.

In case of Option contracts, guidelines issued by FEDAI from time to time for recognition of income, brmium, and discount are being followed.

To mitigate the credit risk, the Bank has policy in place to sanction limits to counterparty the Banks and Counterparty clients. The Bank adopts Current Exposure method for monitoring counterparty exposure periodically. While sanctioning derivative limit, the competent authority may stipulate condition of obtaining collaterals/margin as deemed appropriate. The derivative limit is reviewed periodically along with other credit limits.

The customer related derivative transactions are covered with counterparty banks, on back-to-back basis for identical amount and tenure and the bank does not carry any market risk.

8 Investment in Joint Ventures (AS – 27)

• Investments include Rs.65 Crores (Previous year Rs. 65 Crores) rebrsenting Bank’s interest in Star Union Dai-ichi Life

Insurance Co.it’s jointly controlled entity.

9 Impairment of Asset (AS-28)

In the opinion of the Management, there is no indication for Impairment during the year with regard to the asset to which Accounting Standards 28 applies.

10 Contingent Liabilities (AS – 29)

Contingent liabilities referred to in Schedule-12 at S. No.(I) & (VI)(i) are dependent upon the outcome of court/arbitration/out of court settlement, the amount being called up, terms of contractual obligations, devolvement and raising of demand by parties concerned, disposal of appeals respectively.

11.17 Un-hedged Foreign Currency Exposure

In terms of guidelines issued by Reserve Bank of India with regard to UFCE, Bank has approved Policy on Unhedged Foreign Currency Exposure of Clients 2015-16. While framing the policy, bank has taken into consideration the exchange risks arising out of volatility in the forex market and accordingly has made suitable provisions to reduce the risks. Bank has also taken into consideration credit risks arising out of unhedged foreign currency exposure and accordingly Bank has put in place risk mitigation measures by incorporating additional loan pricing framework. Total provision made for exposures to entities with UFCE for the year ended March 2016 is Rs.33.30 Crores (Rs.24.98 Crores as on 31.03.2015).

12 Liquidity Coverage Ratios (LCR)

A. Qualitative Disclosure

LCR 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 RBI.

LCR is the ratio of HQLA to Net Cash Outflow.

LCR = HQLA

Net Cash Outflows over 30 days Minimum requirement of LCR as stipulated by RBI is 60% for the calendar year 2015 and 70% for the calendar year 2016. LCR is applicable to Bank’s domestic operations as well as overseas operations.

HQLA:

Liquid assets comprise of high quality assets that can be readily sold or used as collateral to obtain funds in a range of stress scenarios. They should be unencumbered i.e. without legal, regulatory or operational impediments. Assets are considered to be high quality liquid assets if they can be easily and immediately converted into cash at little or no loss of value.

HQLA is categorized into two a) Level 1 Assets, and b) Level 2 Assets. Level 2 Assets are also sub divided into Level 2A Assets & Level 2B Assets based on Liquidity & Price Volatility.

Level 1

Levels 1 Asset mainly comprise Cash including excess CRR, Excess SLR, MSF (2% of NDTL) & FALLCR (8% of NDTL).

Level 2A Assets

15% haircut is applied on current market value of Level 2A asset. Level 2A assets mainly comprise Securities issued by PSEs with 20% risk weight not issued by a bank/financial institution/NBFC, Corporate bonds, not issued by bank/financial institution/NBFC, rated AAor above and Commercial Papers with rating AA- or above.

Level 2B Assets

50% haircut is applied on current market value of Level 2B asset. Level 2B assets comprise not more than 15% of the total stock of HQLA. Level 2B assets mainly comprise Securities with risk weights higher than 20% but not higher than 50%, i.e., with credit rating not lower than BBB- and Equity Shares not issued by bank/ financial institution/NBFC and included in any index.

Brief about LCR of the Bank:

For all 12 months during FY 2015-16, i.e., April’15 to March’16, Bank’s LCR stood more than the minimum 60% regulatory requirement for 2015 Calendar year and 70% for 2016 calendar year.

HQLA:

Bank is having sufficient High Quality Liquid Assets so as to maintain LCR above regulatory brscription. Level 1 asset is the main driver of HQLA, contributing around 89% in the Total HQLA of the Bank.

Outflows & Inflows:

Bank has diversified sources of funding of which retail deposits and Deposits are the main source of funds. Bank’s exposure is mainly in Indian rupee.

13 FIXED ASSETS

a) Documentation formalities are yet to be completed in respect of five ( P.Y. nine) immovable properties held by the Bank at written down value of Rs. 36.43 crores ( P.Y. Rs..11.17 crores.) in respect of which steps have already been initiated.

b) Land and Buildings revalued as on 31.3.1995 at fair market value as determined by an approved valuer, have further been revalued as on 30.11.2007 at fair market value by approved valuer. The resultant increase in value thereof on such revaluation amounting to Rs. 456.59 crores as on 31.3.1995 and Rs. 1290.68 crores as on 30.11.2007 have been credited to Revaluation Reserve and debrciation amounting to Rs. 56.56 crores (Rs. 34.62 crores) attributable thereto has been deducted there from. Certain assets were revalued during the year 2015-16 and as a result of which. the revaluation reserve have increased by Rs. 1213.10 crore for the year ended March 31, 2016

15 BALANCING OF BOOKS, RECONCILIATION OF INTER BRANCH / BANK TRANSACTIONS

Adjustment of outstanding entries in Suspense Accounts, Sundry Deposits, Clearing Adjustments, Bank Reconciliation Statements and various inter-branch/office accounts is in progress on an ongoing basis.

Pending final clearance of the same, the overall impact, if any, on the accounts, in the opinion of the management will not be significant.

16 INVESTMENTS

i) Profit of Rs. 97.97 crore (brvious year Rs. 58.43crore) on sale of “Held to Maturity” category securities have been taken to the Profit and Loss account initially and thereafter an amount of Rs. 44.85 crores (brvious year Rs. 27.00 crore) has been appropriated to Capital Reserve net of taxes.

ii) In respect of “Held to Maturity” category, as stated in Significant Accounting Policy No.5 (ii)(a), the excess of acquisition cost over face value of the securities amortized during the year amounted to Rs. 134.48 crore (brvious year Rs. 124.07 crore).

iii) Total investments made in shares, convertible debentures and units of equity linked mutual funds / venture capital funds and also advances against shares aggregate to Rs. 1432.61 crore (brvious year Rs. 1,200.93 crore).

1 During the current year, there are no material prior period item and change in accounting policy (as per AS 5) and no discontinued operations (as per AS 24).

2 The figures of the brvious year have been regrouped /rearranged wherever considered necessary.

 (NITESH RANJAN)

Dy. General Manager

(VIVEK KAMATH)

General Manager

(VINOD KATHURIA)

Executive Director

(Rakesh Sethi)

Executive Director

(Arun Tiwari )

Chairman & Managing Director

(MIHIR KUMAR)

Director

(ANIL KUMAR MISRA)

Director

(JAG MOHAN SHARMA)

Director

(DR. K. RAMESHA)

Director

(DR. R. H. DHOLAKIA)

Director

(G. K. LATH)

Director

(DR. UTTAM KUMAR SARKAR)

Director

AS PER OUR REPORT OF EVEN DATE ATTACHED.

FOR J GUPTA & CO.

CHARTERED ACCOUNTANTS

FIRM REGN.NO. 314010E

(H. K. DATTA)

PARTNER

(M.NO. 012208)

FOR G P KAPADIA & CO.

CHARTERED ACCOUNTANTS

FIRM REGN.NO.104768W

(NIMESH BHIMANI)

PARTNER

(M.NO.030547)

FOR ASHWANI & ASSOCIATES

CHARTERED ACCOUNTANTS

FIRM REGN.NO.000497N

(ADITYA KUMAR)

PARTNER

(M.NO.506955)

FOR GBCA & ASSOCIATES

CHARTERED ACCOUNTANTS

FIRM REGN.NO.103142W

(TANSUKH CHHEDA)

PARTNER

(M.NO.047157)

FOR SUNDAR SRINI & SRIDHAR

CHARTERED ACCOUNTANTS

FIRM REGN.NO.004201S

(S. SRIDHAR)

PARTNER

(M.NO.025504)

FOR P A & ASSOCIATES

CHARTERED ACCOUNTANTS

FIRM REGN.NO.313085E

(PRASHANT PANDA)

PARTNER

(M.NO.051092)

Place : MUMBAI

Date : 13th MAY, 2016.

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