...THE LAKSHMI VILAS BANK LIMITED Notice is hereby given that the 93 rd (Ninety Third) Annual...

Secretarial Department CIN L65110TN1926PLC001377

___________________________________________________________________________ The Lakshmi Vilas Bank Ltd., Corporate Office, “LVB HOUSE”, No.4, Sardar Patel Road, Guindy,

Chennai – 600 032 | Phone: 044-22205306 | Email: [email protected]

Ref/Sec/93rdAGM/79/2020-2021 September 01, 2020 The General Manager Department of Corporate Services National Stock Exchange of India Exchange Plaza, C-1-Block G Bandra Kurla Complex, Bandra-E Mumbai - 400 051 Company symbol: LAKSHVILAS

The General Manager Department of Corporate Services BSE Limited Listing Department PhirozeJeejeeboy Tower Dalal Street, Fort Mumbai - 400 001 Security code no: 534690

Dear Sir / Madam,

Sub: Notice of the 93rd AGM & Annual Report for the year 2019-20 of The Lakshmi Vilas Bank Limited (“Bank”).

In compliance with the applicable regulations of SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015, as amended, we herewith enclose the

Notice of the 93rd Annual General Meeting (AGM) and Annual Report for the year

2019-20 of the Bank.

The same is also made available on the website of the Bank at the following link:

Notice of the 93rd Annual General Meeting

https://www.lvbank.com/UserFiles/LVB%2093rd%20AGM%20Notice%202020.pdf

Annual Report of the Bank for the year 2019-2020

https://www.lvbank.com/UserFiles/LVB%2093rd%20Annual%20Report%202019-20.pdf

Dispatch of the Notice of 93rdAGM and the Annual Report for FY 2019-20 (by e-mail

only) to the shareholders will be carried out by National Securities Depository Limited

(NSDL) on September 02, 2020.

This is for your kind information.

Thanking you, Yours faithfully,

N Ramanathan Company Secretary

mailto:[email protected]

https://www.lvbank.com/UserFiles/LVB%2093rd%20AGM%20Notice%202020.pdf

https://www.lvbank.com/UserFiles/LVB%2093rd%20Annual%20Report%202019-

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CIN L65110TN1926PLC001377

Registered Offi ce: Salem Road, Kathaparai, Karur - 639 006.Corporate Offi ce: “LVB House”, No.4, Sardar Patel Road, Guindy, Chennai - 600 032.

Website: www.lvbank.com, Tel. No.: 044-22205306, Email: [email protected]

NOTICE TO THE MEMBERS

THE LAKSHMI VILAS BANK LIMITED

Notice is hereby given that the 93rd (Ninety Third) Annual General Meeting of the Members of The Lakshmi Vilas Bank Limited (“Bank”) will be held through Video Conferencing (“VC”)/Other Audio Visual Means (“OAVM”) on Friday, 25th September, 2020, at 11.00 a.m. The Meeting is held through Video Conferencing (“VC”)/Other Audio Visual Means (“OAVM”) on account of outbreak of COVID-19 (coronavirus) pandemic and in accordance with the relevant circulars issued by the Ministry of Corporate Affairs. The meeting shall transact the following business.

ORDINARY BUSINESS

1. To receive, consider and adopt the audited fi nancial statements of the Bank for the fi nancial year ended 31st March, 2020 and the report of the Directors and the statutory auditors thereon.

2. To appoint a director in the place of Shri N.Saiprasad, DIN 00137910, who retires by rotation and being eligible, offers himself for re-appointment.

3. To appoint and to approve the fees / remuneration of the statutory auditors and if thought fi t to pass, with or without modifi cation(s), the following resolution as an ORDINARY RESOLUTION:

“RESOLVED THAT pursuant to Section 139 and Section 142 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the applicable provisions of Banking Regulation Act, 1949, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the rules, circulars, guidelines issued by the Reserve Bank of India, as applicable, each including statutory modifi cation(s) or re-enactment thereof for the time being in force, M/s. P. Chandrasekar LLP, Chartered Accountants, (Firm Registration No.000580S/S200066) be and is hereby re-appointed as the statutory auditors of the Bank, and shall hold offi ce from the conclusion of this meeting till the conclusion of the next annual general meeting of the Bank, on approved terms of the Reserve Bank of India, at a proposed annual remuneration of ` 30,00,000/-(Rupees Thirty Lakhs Only) plus out of pocket expenses and applicable goods and services tax, with the board of directors (the “Board”) being authorized, on the recommendations of the Audit Committee of the Board, to make such revision to the annual remuneration as it may deem necessary based on regulatory advice or on mutually agreed terms with the statutory auditors.”

SPECIAL BUSINESS

4. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as an ORDINARY RESOLUTION:

“RESOLVED THAT the board of directors of the Bank be and is hereby authorized to appoint, in consultation with statutory auditors, as branch auditors, such persons who are qualifi ed to act as auditors, including statutory auditors, pursuant to Section 143(8) and other applicable provisions of the Companies Act, 2013, for the purpose of audit of the branches of the Bank, to decide the branch offi ces to be audited by such branch auditors, and to fi x their remuneration and reimbursement of out of pocket expenses incurred, if any, in connection with the audit, based on the recommendation of the Audit Committee of the Board.”

5. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as an ORDINARY RESOLUTION:

"RESOLVED THAT pursuant to Sections 196, 197, 203 read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other relevant rules thereunder, the Banking Regulation Act, 1949, relevant circulars issued by the Reserve Bank of India (RBI) from time to time, each including any amendments, modifi cations, variations or re-enactments thereof, and as approved by the Reserve Bank of India under Section 35B of the Banking Regulation Act, 1949, and the recommendation of the Nomination, Remuneration and Compensation Committee of the board and the Board of Directors of the Bank (hereinafter referred to as the “Board”) consent of members of the Bank be and is hereby accorded for the appointment of Shri S.Sundar, DIN 08655632 as the Managing Director and Chief Executive Offi cer (“MD & CEO”) of the Bank for a period of 11 months from January 01, 2020 till November 30, 2020, or till a regular managing director and chief executive offi cer takes charge, whichever is earlier (and who will be a director of the

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Bank not liable to retirement by rotation),on such terms and conditions, including remuneration, as are set out in the explanatory statement to the resolution as per Item No. 5 of this notice.

RESOLVED FURTHER THAT subject to the provisions of the Companies Act, 2013 and any other applicable law, the consent of the members of the Bank be and is hereby accorded to the Board to revise the remuneration and perquisite payable to Shri S.Sundar, DIN 08655632 as MD & CEO of the Bank, from time to time.

6. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as an ORDINARY RESOLUTION.

“RESOLVED THAT pursuant to Sections 149 and 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualifi cation of Directors) Rules, 2014, the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provisions of the Banking Regulation Act, 1949, and the circulars issued by the Reserve Bank of India from time to time, each including any amendments, modifi cations, variations or re-enactments thereof and the recommendations of the Nomination, Remuneration and Compensation Committee of the board and the Board of Directors of the Bank, Shri Gorinka Jaganmohan Rao, DIN 06743140, who was appointed as an additional non-executive and independent director with effect from 02nd December, 2019 and who holds offi ce up to the date of this annual general meeting of the Bank, pursuant to Section 161 and other applicable provisions, if any of the Companies Act, 2013, be and is hereby appointed as non-executive and independent director of the Bank, for a period of two (2) years from the date of this meeting, and is not liable to retire by rotation.”


“RESOLVED THAT pursuant to Section 152 and other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Appointment and Qualifi cation of Directors) Rules, 2014, and applicable provisions of the Banking Regulation Act, 1949, and circulars issued by the RBI from time to time, each including any amendments, modifi cations, variations or re-enactments thereof, and the recommendations of the Nomination, Remuneration and Compensation Committee of the Board and the Board of Directors of the Bank, Shri Raghuraj Gujjar, DIN 02734451, who was appointed as an additional non-executive and non-independent director with effect from 02nd December, 2019 and who holds offi ce up to the date of this annual general meeting of the Bank, pursuant to Section 161 and other applicable provisions, if any of the Companies Act, 2013, be and is hereby appointed as non-executive and non-independent director of the Bank, liable to retire by rotation.”


“RESOLVED THAT pursuant to Sections 149 and 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualifi cation of Directors) Rules, 2014, the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provisions of the Banking Regulation Act, 1949, and the circulars issued by the Reserve Bank of India from time to time, each including any amendments, modifi cations, variations or re-enactments thereof and the recommendations of the Nomination, Remuneration and Compensation Committee of the Board and the Board of Directors of the Bank, Shri Shakti Sinha, DIN 02876853, who was appointed as an additional non-executive and independent director with effect from 02nd December, 2019 and who holds offi ce up to the date of this annual general meeting of the Bank, pursuant to Section 161 and other applicable provisions, if any of the Companies Act, 2013, be and is hereby appointed as non-executive and independent director of the Bank, for a period of two (2) years from the date of this meeting, and is not liable to retire by rotation.”


“RESOLVED THAT pursuant to Sections 149 and 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualifi cation of Directors) Rules, 2014, the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provisions of the Banking Regulation Act, 1949, and circulars issued by the Reserve Bank of India from time to time, each including any amendments, modifi cations, variations or re-enactments thereof and the recommendations of the Nomination, Remuneration and Compensation Committee of the Board and the Board of Directors of the Bank, Shri Satish Kumar Kalra, DIN 01952165, who was appointed as an additional non-executive and independent director with effect from 02nd December, 2019 and who holds offi ce up to the date of this annual general meeting of the Bank, pursuant to Section 161 and other applicable provisions, if any of the Companies Act, 2013, be and is hereby appointed as non-executive and independent director of the Bank, for a period of two (2) years from the date of this meeting, and is not liable to retire by rotation.”


“RESOLVED THAT pursuant to Sections 149 and 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualifi cation of Directors) Rules, 2014, the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provisions of the Banking Regulation Act, 1949, and circulars issued by the Reserve Bank of India from time to time, each including any amendments,

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modifi cations, variations or re-enactments thereof and the recommendations of the Nomination, Remuneration and Compensation Committee of the Board and the Board of Directors of the Bank, Smt. Meeta Makhan, DIN 07135150, who was appointed as an additional non-executive and independent director with effect from 23rd January, 2020 and who holds offi ce up to the date of this annual general meeting of the Bank, pursuant to Section 161 and other applicable provisions, if any of the Companies Act, 2013, be and is hereby appointed as non-executive and independent director of the Bank, for a period of two (2) years from the date of this meeting, and is not liable to retire by rotation.”


“RESOLVED THAT pursuant to Section 152 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualifi cation of Directors) Rules, 2014, applicable provisions of the Banking Regulation Act, 1949, and circulars issued by the Reserve Bank of India from time to time, each including any amendments, modifi cations, variations or re-enactments thereof and the recommendations of the Nomination, Remuneration and Compensation Committee of the Board and the Board of Directors of the Bank, Shri K.R.Pradeep, DIN 00153097, who was appointed as an additional non-executive and non-independent director with effect from 23rd January, 2020 and who holds offi ce up to the date of this annual general meeting of the Bank, pursuant to Section 161 and other applicable provisions, if any, of the Companies Act, 2013, be and is hereby appointed as non-executive and non-independent director of the Bank, liable to retire by rotation.”

12. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a SPECIAL RESOLUTION.

“RESOLVED THAT pursuant to Sections 149 and 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualifi cation of Directors) Rules, 2014, the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provisions of the Banking Regulation Act, 1949, and circulars issued by the Reserve Bank of India from time to time, each including any amendments, modifi cations, variations or re-enactments thereof and the recommendations of the Nomination, Remuneration and Compensation Committee of the Board and the Board of Directors of the Bank, Shri B.K.Manjunath, DIN 00319891, who was appointed as an additional non-executive and independent director with effect from 10th June, 2020 and who holds offi ce up to the date of this annual general meeting of the Bank, pursuant to Section 161 and other applicable provisions, if any of the Companies Act, 2013, be and is hereby re-appointed as non-executive and independent director of the Bank, for a period of two (2) years from the date of this meeting, and is not liable to retire by rotation.”

13. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a SPECIAL RESOLUTION.

“RESOLVED THAT pursuant to Sections 149 and 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualifi cation of Directors) Rules, 2014, the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provisions of the Banking Regulation Act, 1949, and circulars issued by the Reserve Bank of India from time to time, each including any amendments, modifi cations, variations or re-enactments thereof and the recommendations of the Nomination, Remuneration and Compensation Committee of the Board and the Board of Directors of the Bank, Shri Y.N.Lakshminarayana Murthy, DIN 07534836, who was appointed as an additional non-executive and independent director with effect from 30th July, 2020 and who holds offi ce up to the date of this annual general meeting of the Bank, pursuant to Section 161 and other applicable provisions, if any, of the Companies Act, 2013, be and is hereby re-appointed as non-executive and independent director of the Bank, for a period of two (2) years from the date of this meeting, and is not liable to retire by rotation.”

14. To consider and if thought fi t, to pass with or without modifi cation(s) the following resolution as an ORDINARY RESOLUTION:

“RESOLVED THAT pursuant to Section 61(1)(a) of the Companies Act, 2013, as amended read with Articles of Association of the Bank and the relevant rules formed thereunder and subject to all other applicable provisions, if any, the authorized share capital of the Bank be increased from ` 650,00,00,000/- (Rupees Six Hundred and Fifty Crores Only) divided into 65,00,00,000 equity shares of ` 10/- each, to ` 1000,00,00,000/- (Rupees One Thousand Crores Only) divided into 100,00,00,000 equity shares of ` 10/- each, ranking pari-passu in all respect with the existing equity shares of the Bank.

RESOLVED FURTHER THAT the existing Clause 6 of the memorandum of association of the Bank be amended and shall stand substituted as follows, subject to the approval of the Reserve Bank of India.

“6. The liability of the members is limited. The authorized capital of the Bank is ` 1000,00,00,000/-(Rupees One Thousand Crores Only) divided into 100,00,00,000 equity shares of ` 10/- each”.

RESOLVED FURTHER THAT Shri K.Hariharan, Chief Financial Offi cer and Shri N.Ramanathan, Company Secretary, be and are hereby jointly or severally authorized to fi le necessary forms with the Registrar of Companies and do all such acts, deeds, matters and things as may be required to be done to give effect to the above resolution.”

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15. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a SPECIAL RESOLUTION

“RESOLVED THAT pursuant to the relevant provisions of the memorandum and articles of association of the Bank, the provisions of Sections 23, 41, 42 and 62 and other applicable provisions, if any, of the Companies Act, 2013 read with the rules made thereunder (including any amendments, statutory modifi cation(s) and / or re-enactment thereof for the time being in force) (the “Companies Act”), the relevant provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)Regulations, 2018 (including any amendment, modifi cation, variation or re-enactment thereof) (the “ICDR Regulations”), the applicable listing agreements entered into by the Bank with the stock exchange(s) where the equity shares of the Bank of face value of `10 each (the “Equity Shares”) are listed or are currently proposed to be listed, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any amendment, modifi cation, variation or re-enactment thereof) (the “Listing Regulations”), to the extent applicable, the provisions of the Foreign Exchange Management Act, 1999 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof) and the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof), the Banking Regulation Act, 1949 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof), the Depository Receipts Scheme, 2014 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof) (the “DR Scheme”) and all other applicable statutes, rules, regulations, guidelines, notifi cations, circulars and clarifi cations as may be applicable, as amended from time to time, issued by the Government of India, Ministry of Corporate Affairs, the Reserve Bank of India, BSE Limited and National Stock Exchange of India Limited (together with BSE Limited, the “Stock Exchanges”), the Securities and Exchange Board of India, and / or any other regulatory / statutory authorities, in India or abroad, from time to time, to the extent applicable and subject to the approvals, permissions, consents and sanctions of any regulatory / statutory authorities and guidelines and clarifi cations issued thereon from time to time and subject to such conditions and modifi cations as may be prescribed by any of them while granting such approvals, permissions, consents and / or sanctions, which may be agreed to by the Board of Directors of the Bank (hereinafter referred to as the “Board” which term shall be deemed to include any committee(s) constituted / to be constituted by the Board to exercise its powers including powers conferred by this resolution), the Bank be and is hereby authorised to create, offer, issue and allot (including with provisions for reservations on fi rm and / or competitive basis, for such part of the issue and for such categories of persons as may be permitted and to provide a discount to the issue price to such categories of persons, as permitted under applicable law) of such number of Equity Shares, Global Depository Receipts (“GDRs”), American Depository Receipts (“ADRs”), Foreign Currency Convertible Bonds (“FCCBs”), fully convertible debentures / partly convertible debentures, preference shares convertible into Equity Shares, securities or fi nancial instruments convertible into Equity Shares, securities linked to Equity Shares, securities with or without detachable warrants with right exercisable by the warrant holders to convert or subscribe to Equity Shares (including non-convertible debt instruments with warrants) or any other eligible securities (hereinafter referred to as “Securities”), or any combination thereof, in one or more tranches, in the course of Indian and / or international offering(s) in one or more foreign markets, for cash, at such price or prices, at market price(s) or at a discount, as may be permissible under applicable law or premium to market price(s) in terms of the applicable regulations and as permitted under the applicable laws, in such manner in consultation with the merchant banker(s) and / or other advisor(s) or otherwise, upon exercise or conversion of all securities so issued and allotted, for an aggregate amount not exceeding `1000 crores (Rupees Thousand crores only) by way of one or more public and / or private offerings, including by way of a further public offer in accordance with the provisions of Chapter IV of the ICDR Regulations, qualifi ed institutions placement in accordance with the provisions of Chapter VI of the ICDR Regulations (“QIP”), and / or any other permitted modes through a prospectus and / or an offer document and / or a private placement offer letter and / or such other documents / writings / circulars / memoranda, by way of issue of any Securities, with or without premium, to be subscribed to in Indian and / or any foreign currencies by all eligible investors that may be permitted to invest in such issuance of Securities as per the extant regulations / guidelines, including eligible qualifi ed institutional buyers (“QIBs”) as defi ned in the ICDR Regulations, foreign or resident investors (including institutions, incorporated bodies, mutual funds, individuals or otherwise), venture capital funds (foreign or Indian), alternate investment funds, foreign portfolio investors, Indian and / or multilateral fi nancial institutions, mutual funds, insurance companies, non-resident Indians, stabilizing agents, pension funds or any other categories of investors (whether or not such investors are members of the Bank) or any combination of the above as may be deemed appropriate by the Board in its absolute discretion and, whether or not such investors are members of the Bank (hereinafter collectively referred to as the “Investors”), to all or any of them, jointly or severally through a prospectus / an offer document / placement document and / or other letter or circulars may be deemed appropriate, in the sole discretion by the Board in such manner and on such terms and conditions as may be determined and deemed appropriate by the Board in its absolute discretion at the time of such issue and allotment (considering the prevailing market conditions and other relevant factors), including in relation to, the categories of Investors, to whom the offer, issue and allotment of Securities shall be made to the exclusion of others, in such manner, including allotment to stabilizing agent in terms of a green shoe option, if any, exercised by the Bank, and where necessary in consultation with the book running lead manager(s) and / or underwriters and / or stabilizing agent and / or other advisors, whether the Securities will be issued as fully or partly paid-up, making of calls and manner of appropriation of application money or call money in respect of different class(es)of Investor(s) and / or in respect of different Securities, number of Securities to be issued, face value, number of Equity Shares to be allotted on conversion / redemption / extinguishment of debt(s), rights attached to the warrants, period of conversion, fi xing of record date or book closure terms, if any, securities premium, or its equivalent amount in such foreign currencies as may be necessary;

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at such price or prices, (whether at prevailing market price(s) or at discount or premium to market price(s) permissible under the applicable regulations) as the Board may in its absolute discretion decide, in each case subject to applicable law.

RESOLVED FURTHER THAT the issue of Securities shall be subject to the following terms and conditions: (i) the Equity Shares that may be issued and allotted directly or on conversion of other convertible or exchangeable Securities that may be issued asaforesaid shall be subject to the provisions of the memorandum and articles of association of the Bank and rank pari – passu with the then existing Equity Shares in all respects including dividend; and (ii) the number and / or conversion price in relation to Equity Shares that may be issued and allotted on conversion of other convertible Securities that may be issued as aforesaid shall be appropriately adjusted for corporate actions such as bonus issue, rights issue, stock split and consolidation of share capital, merger, de-merger, transfer of undertaking, sale of division or any such capital or corporate restructuring.

RESOLVED FURTHER THAT in case of a further public offer, the Securities shall be issued by the Bank incompliance with Chapter IV of the SEBI ICDR Regulations and other applicable laws.

RESOLVED FURTHER THAT in case of issue and allotment of Securities by way of QIP in terms of Chapter VI of the ICDR Regulations (hereinafter referred to as “Eligible Securities” within the meaning rendered to such term under Regulation 171(a) of the ICDR Regulations):

1. the allotment of the Eligible Securities, or any combination of the Eligible Securities as may be decided by the Board and subject to applicable laws, shall be completed within 365 days from the date of passing of this special resolution of the shareholders of the Bank or such other time as may be allowed under the ICDR Regulations and shall only be made to eligible QIBs within the meaning of ICDR Regulations;

2. the Eligible Securities under the QIP shall be allotted as fully paid up;

3. in the event Equity Shares are issued, the ‘relevant date’ for the purpose of pricing of the Equity Shares to be issued, shall be the date of the meeting in which the Board decides to open the proposed issue of Equity Shares, subsequent to the receipt of members’ approval in terms of provisions of Companies Act, 2013 and other applicable laws, rules, regulations and guidelines in relation to the proposed issue of the Equity Shares;

4. in the event that Eligible Securities issued are eligible convertible securities, the ‘relevant date’ for the purpose of pricing of the convertible securities to be issued, shall be, either the date of the meeting in which the Board decides to open the proposed issue or the date on which the holders of such eligible convertible securities become entitled to apply for Equity Shares, as decided by the Board;

5. the tenure of the convertible or exchangeable Eligible Securities issued through the QIP shall not exceed sixty months from the date of allotment;

6. any issue of Eligible Securities made by way of a QIP shall be at such price which is not less than the price determined in accordance with the pricing formula provided under Part IV of Chapter VI of the ICDR Regulations (the “QIP Floor Price”). The Board may, however, subject to the approval of the shareholders of the Bank, issue Equity Shares at a discount of not more than fi ve percent or such other discount as may be permitted under applicable regulations to the QIP Floor Price; and

7. the Eligible Securities allotted in the QIP shall not be eligible for sale by the respective allottees, for a period of one year from the date of allotment, except on a recognized stock exchange or except as may be permitted from time to time by the ICDR Regulations.

RESOLVED FURTHER THAT in case of any offering of Securities, including without limitation any GDRs / ADRs / FCCBs / other Securities convertible into Equity Shares, the Board is hereby authorized to issue and allot such number of Equity Shares as may be required to be issued and allotted upon conversion, redemption or cancellation of any such Securities referred to above in accordance with the terms of issue / offering in respect of such Securities and / or as may be provided in the offer document and / or offer letter and / or offering circular and / or listing particulars.

RESOLVED FURTHER THAT without prejudice to the generality of the above, the Securities may have such features and attributes or any terms or combination of terms in accordance with domestic and international practices to provide for the tradability and free transferability thereof as per applicable law including but not limited to the terms and conditions in relation to payment of interest, additional interest, premium on redemption, prepayment and any other debt service payments whatsoever including terms for issue of additional Equity Shares or variation of the conversion price of the Securities during the duration of the Securities and the Board be and is hereby authorized in its absolute discretion, in such manner as it may deem fi t, to dispose of such of the Securities that are not subscribed in accordance with applicable law.

RESOLVED FURTHER THAT the Board be and is hereby authorized to do all such acts, deeds, actions and sign such documents as may be required in furtherance of, or in relation to, or ancillary to, the offering, issue and allotment of Securities, including authorizing any director(s) or offi cer(s) of the Bank to sign offer documents, execute any necessary documents, agreements, forms, deeds, appoint intermediaries, open and close the period of subscription, determine the Investors or class(es) of Investors

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to whom the offer is to be made, determine the terms and conditions of the issuance of Securities, including the timing, fl oor price (including any discount thereto, as may be permitted under applicable law) and the issue price in respect of the Securities, fi le any necessary forms with regulatory authorities and allot the Securities and to amend, vary or modify any of the above as authorized by the Board or such authorized persons may consider necessary, desirable or expedient, and enter into and execute all such arrangements / agreements as the case may be with any lead managers, managers, underwriters, advisors, lawyers, guarantors, depositories, custodians and all such agencies as may be involved or concerned in such offerings of the Securities and to remunerate all such agencies including payment of commissions, brokerage, fees or the like, and also to seek the listing of such Securities in one or more stock exchanges in India and / or overseas as the case may be.

RESOLVED FURTHER THAT the board of directors of the Bank be and is hereby authorized to delegate all or any of the powers herein conferred to any committee of directors or any whole-time director(s) of the Bank in such manner as they may deem fi t in their absolute discretion with the power to take such steps and to do all such acts, deeds, matters and things as they may deem fi t and proper for the purposes of the Issue and settle any questions or diffi culties that may arise in this regard to the Issue without being required to seek any further consent or approval of the members or otherwise to the end and intent that the members of the Bank shall be deemed to have given their approval thereto expressly by the authority of this resolution.”

16. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a SPECIAL RESOLUTION:

“RESOLVED THAT pursuant to Section 42 and other applicable provisions, if any, of the Companies Act, 2013 read with the rules made thereunder including Companies (Prospectus and Allotment of Securities) Rules, 2014, the Companies (Share Capital and Debenture) Rules, (the “Companies Act”), Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008, the applicable provisions of the Banking Regulation Act, 1949, and the rules, circulars and guidelines issued by the Reserve Bank of India (“RBI”) from time to time, each including any statutory amendment(s) or modifi cation(s) or re-enactment(s) thereof for the time being in force, and all other relevant provisions of applicable law(s), the provisions of the memorandum and articles of association of the Bank and subject to such other approval(s), consent(s), permission(s) and sanction(s) as may be necessary from the concerned statutory authority(ies), including RBI, BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”, and together with the BSE, the “Stock Exchanges”), the approval of the members of the Bank be and is hereby accorded to the Board of Directors of the Bank (hereinafter referred to as “Board” and which term shall be deemed to include any Committee of the Board or any other persons to whom powers are delegated by the Board as permitted under the Companies Act, 2013) for borrowing / raising of funds in Indian / foreign currency by issue of debt securities including but not limited to refi nance from term lending institutions and non-convertible debentures, bonds (including bonds forming part of Tier I capital / Tier II Capital in accordance with and subject to the terms and conditions specifi ed in the Basel III Capital Regulations prescribed by RBI, long terms infrastructure bonds or such other bonds as may be permitted by RBI from time to time), or a combination thereof, in domestic and / or overseas market, on a private placement basis and / or for making offers and / or invitations therefor and / or issue(s) / issuances therefor, on private placement basis, for a period of one year from the date hereof, in one or more tranches and / or series and under one or more shelf disclosure documents and / or one or more letters of offer and on such terms and conditions for each series / tranches including the price, coupon, premium, discount, tenor etc., as deemed fi t by the Board, as per the structure and within the limits permitted by RBI, of an amount not exceeding `500 crores (Rupees Five Hundred crores only), in aggregate for additional Tier I and / or Tier II capital within the overall borrowing limits of the Bank, as approved by the members of the Bank from time to time.

RESOLVED FURTHER THAT the Board be and is hereby authorized to negotiate, modify and fi nalize the terms and conditions of the debt securities and sign the relevant documents / agreements in connection with the private placement of the debt securities, including without limitation, the private placement offer letter (along with the application form), information memorandum, disclosure documents, debenture subscription agreement, debenture trust deed and any other documents as may be required, and do all such acts, deeds, actions and sign such documents as may be required in furtherance of, or in relation to, or ancillary to, the offering(s), issuance(s) and / or allotment(s) on private placement of debt securities by the Bank and to further delegate the above powers to any Committee of Directors or any whole-time director of the Bank in such manner as the Board may deem fi t in its absolute discretion with the power to take such steps and to do all such acts, deeds, matters and things as they may deem fi t and proper for the purposes of giving effect to this resolution and settle any questions or diffi culties that may arise in this regard without being required to seek any further consent or approval of the members of the Bank or otherwise to the end and intent that the members of the Bank shall be deemed to have given their approval thereto expressly by the authority of this resolution”.

17. To consider and, if thought fi t, to pass the following resolution as a SPECIAL RESOLUTION:

“RESOLVED THAT in supersession of the resolution passed at the 87th Annual General Meeting held on 26th September, 2014, subject to the applicable provisions of the Foreign Exchange Management Act, 1999 (FEMA), including the regulations, guidelines and circulars issued thereunder, the Companies Act, 2013, to the extent applicable, Banking Regulation Act, 1949, to the extent applicable, Foreign Exchange Management (Non-debt Instruments) Rules, 2019, the Consolidated Foreign Direct Investment Policy Circular of 2017, as amended, Master Directions of the Reserve Bank of India on Foreign Investment in India and all other applicable laws, rules, regulations, guidelines and subject to the approvals, consents and permissions of the Department of

7

Financial Services, Ministry of Finance (“DFS”), Government of India, the Reserve Bank of India (“RBI”) and any other appropriate authorities, institutions or bodies as may be necessary and applicable rules, regulations, guidelines, circulars, policies and laws, as applicable, each including any modifi cations or re-enactment(s) thereof, from time to time, and subject to all applicable approval(s), permission(s), sanction(s), consent(s) and intimation(s), as may be required, and subject to such condition(s) as may be prescribed by the RBI or any other the relevant authorities, while granting such approval(s), permission(s), sanction(s) and consent(s), as may be required, the consent of the members of the Bank be and is hereby accorded to permit foreign investors including FPI’s and NRI’s to acquire shares of the Bank by purchase or acquisition on the recognized Stock Exchanges, subject to the condition that the individual holding of the above investors shall not exceed 5% of the paid up capital which is subject to the regulatory approval and the total holding of all eligible foreign investors shall not exceed an aggregate limit of 74% of the total paid up share capital of the Bank, within which the aggregate NRI holding shall not exceed 24%, both of which may be increased to such other maximum limit as may be prescribed from time to time.

RESOLVED FURTHER THAT the Board be and is hereby authorized to do all such acts, matters, deeds and things necessary or desirable in connection with or incidental to giving effect to the object of the above resolution.”

BY ORDER OF THE BOARDFor THE LAKSHMI VILAS BANK LIMITED

N.RAMANATHANPlace: Chennai Company SecretaryDate: 26.08.2020 ACS No. 28366

Notes:

1. In view of the current extraordinary circumstances due to the COVID-19 pandemic prevailing in the country and continuing restrictions on movement of persons at several places and social distancing norms, the Ministry of Corporate Affairs (“MCA”) vide its circular dated May 05, 2020 had permitted companies to hold annual general meeting through VC or OAVM) Accordingly, in compliance with the applicable provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended and other applicable circulars and notifi cations issued by the Regulators, this annual general meeting of the Bank (“AGM”) will be held through VC or OAVM.

2. In compliance with the aforesaid MCA Circular, read with the circulars dated April 8, 2020, April 13, 2020 issued by the MCA and in accordance with circular dated May 12, 2020, issued by the Securities and Exchange Board of India providing relaxations to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (collectively, the “Applicable Circulars”), notice of the AGM along with the Annual Report 2019-20 is being sent only through electronic mode (no printed copies will be sent) to those Members whose email addresses are registered with the Registrar/Depositories. Members may note that the Notice and Annual Report 2019-20 will also be available on the Bank’s website www.lvbank.com, websites of the Stock Exchanges i.e. National Stock Exchange of India Limited and BSE Limited at www.nseindia.com and www.bseindia.com respectively, and on the website of NSDL https://www.evoting.nsdl.com.

3. In compliance with the Applicable Circulars, the Company has also published a public notice by way of an advertisement on 29th August, 2020 in Business Standard (All India Edition) and “Dinamani” (Trichy Edition), advising the members whose e-mail ids are not registered with the Registrar and Share Transfer Agent (RTA) or Depository Participant(s) (DPs), as the case may be, to register their e-mail ids with them.

4. An Explanatory Statement as required under Section 102 of the Companies Act, 2013, pertaining to the special business contained in Item No.4 to 17 above is annexed herewith.

5. The Additional information pursuant to Regulation 26(4) & 36 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended and in compliance of SS – 2 - Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India (ICSI) as amended in respect of the Director seeking re-election vide Item No.2 are detailed elsewhere in the Notice. The additional information for Item Nos. 5 to 17 are provided as a part of the explanatory statement. The Directors have furnished the requisite documents for appointment as are applicable.

6. In case of joint holders participating the Meeting, only such joint holder who is higher in the order of names will be entitled to vote, provided the votes are not already cast by remote e-voting by the fi rst holder.

7. All relevant documents referred to in the Notice are available for electronic inspection by the members without any fee from the date of circulation of this Notice upto the date of the AGM. Members seeking to inspect such documents can send an email to [email protected] / [email protected] stating their folio number / DP & Client ID and the documents they wish to inspect.

8

8. As per Section 105 of the Companies Act, 2013, a member entitled to attend and vote at the meeting is entitled to appoint a proxy / proxies to attend and vote instead of him / her. However, since this AGM is held through VC/OAVM, where physical attendance of members has been dispensed with, there is no requirement for appointment of proxies, as per the MCA Circular dated 08th April, 2020. Accordingly, the facility of appointment of proxies by members will not be available for this AGM. Hence, Proxy Form and Attendance Slip are not enclosed with this notice. However in pursuance of Section 112 & Section 113 of the Act, representatives of the members may be appointed for the purpose of voting through remote e-voting or for participation and voting in the meeting held through VC or OAVM.

9. Corporate member who intends to authorize their representative(s) to attend the Annual General Meeting through VC/OAVM and vote on their behalf should attach / send the certifi ed true copy of the Board Resolution authorizing them to attend and vote on their behalf to [email protected] with a copy marked to [email protected].

10. In compliance of SEBI direction to all listed companies to maintain all works relating to share registry – both physical and electronic at single point i.e. either in house or by SEBI Registered “Registrar & Transfer Agent (RTA)”, Bank has appointed M/s. Integrated Registry Management Services Private Limited, Chennai as Share Transfer Agent for both physical and demat segments with effect from 30th January, 2003.

Address of Share Transfer Agent: M/s. Integrated Registry Management Services Private Limited II fl oor, “Kences Towers”, No.1 Ramakrishna Street, North Usman Road, T.Nagar, Chennai – 600 017 Ph: 044-28140801/2/3 Fax: 28142479 Email: [email protected]

11. Members are requested to notify any change in their address along with their pincode immediately to Share Transfer Agent and in case their shares are held in demat form; this information should be sent to the concerned Depository Participant.

12. Shareholders who hold shares in physical form may avail of the Nomination Facility at any time by submitting Form No.SH – 13 as prescribed under Section 72 of the Companies Act, 2013. While the Form is available in the MCA website, the form may also be obtained from our Registrar & Share Transfer Agent, M/s. Integrated Registry Management Services Private Limited. The duly fi lled in form should be submitted to our Registrar & Share Transfer Agent for registering the nomination.

Shareholders holding shares in demat mode are requested to contact their Depository Participants directly for recording their nomination.

13. Unclaimed Dividends

Shareholders and Benefi cial owners who have not so far encashed / claimed the dividends for the last 7 years i.e. from 2012-2013 to 2016-2017 have to submit the dividend warrant(s) if any available with them for revalidation to the Registrar & Share Transfer Agent, M/s. Integrated Registry Management Services Private Limited, II Floor, “Kences Towers”, No. 1, Ramakrishna Street, North Usman Road, T. Nagar, Chennai – 600 017. Shareholders who have lost the dividend warrants / not claimed their dividends from the year 2012-13, for any assistance / clarifi cations, are requested to approach the Bank at its Secretarial Department at the Corporate Offi ce / Registered Offi ce or the Share Transfer Agent at the above address for further details and for making a valid claim for the unclaimed dividends. In terms of Section 124(5) read with Section 125 of the Companies Act, 2013 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, (‘IEPF Rules’), as amended, all shares in respect of which dividend has not been claimed by the shareholders for last seven consecutive years shall be transferred by the Bank in the name of Investor Education and Protection Fund and credited to the DEMAT account of the IEPF Authority. In line with the applicable proviso, the Bank has transferred the shares pertaining to the unclaimed dividend for the years 2011-12 to the IEPF Authority. The details of the unclaimed dividend are available in the website of Investor Education and Protection Fund as well as the website of our Bank and the shareholders may verify their details from the said websites and approach us for claim.

In this regard, the Bank has sent individual notices on 10th July 2020 to the latest available addresses to those shareholders whose dividends are lying unclaimed since 2012-13 for the last 7 consecutive years advising them to immediately claim the dividends from the fi nancial year 2012-13 onwards in order to avoid transfer of the concerned shares to IEPF account. In the event of failure to claim the dividends as aforesaid, the Bank will transfer the concerned shares in respect of which the dividends are lying unpaid to the IEPF account (in Dematerialized form) as provided in the IEPF Rules.

In case of non-receipt of any valid claim requests from the concerned on or before 04.09.2020, the Bank will transfer the underlying shares to the IEPF account as provided in the IEPF Rules.

Further, in terms of the IEPF Rules, the statement containing the details of name, folio number, demat account number and number of shares due for transfer is available in our website www.lvbank.com. Shareholders may note that pursuant to

9

Section 124(6) of the Companies Act, 2013, as amended, read with Rule 7 of IEPF Rules, shares which have been transferred to the IEPF suspense account may be claimed by the concerned by fi ling of Form IEPF 5 and by following the procedure as provided in the IEPF Rules. The Bank has also appointed nodal offi cer and deputy nodal offi cer for the purpose of coordination with IEPF authority. The contact information of the nodal offi cer has been made available online as per the IEPF Rules and can be accessed at https://www.lvbank.com/shareholder-info.aspx.

14. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Bank or with our Registrar & Transfer Agent, M/s. Integrated Registry Management Services Private Limited, Chennai. In line with SEBI directive, shareholders holding shares in physical form and who have not updated their PAN and Bank Account details with the Bank shall be subject to enhanced due diligence by the Bank i.e., any transaction in such physical securities shall attract enhanced supervision by the Company (Bank) and RTA.

15. Green Initiatives in Corporate Governance – Shareholders who have not registered their email address so far are requested to register their email address (for demat holders - with their respective DPs and for holders in physical form - with our Registrar & Transfer Agent, M/s. Integrated Registry Management Services Private Limited, Chennai) to enable to send all future correspondence through email.

16. Electronic copy of the Annual Report for the year 2019-20, Notice of the 93rd Annual General Meeting of the Bank inter alia indicating the process and manner of e-voting is being sent to all the members whose email IDs are registered with the Registrar and Share Transfer Agent/ Depository Participant(s) for communication purposes.

17. The members may note that attendance of members through VC or OAVM shall be counted for the purpose of reckoning the quorum under Section 103 of the Companies Act, 2013 as per MCA Circular dated 08th April, 2020.

18. In accordance with the Applicable Circulars, the VC/OAVM will have a capacity to allow at least 1000 members to participate in the AGM and such participation shall be on a fi rst-come-fi rst-served basis. However, please note that pursuant to the Applicable Circulars, large shareholders (i.e. shareholders holding 2% or more shareholding), promoters, institutional investors, directors, key managerial personnel, the chairpersons of the Audit Committee of the Board, Nomination, Remuneration and Compensation Committee of the Board and Stakeholders Relationship Committee, auditors, etc., may be allowed to attend the meeting without restriction on account of fi rst-come fi rst served principle.

19. Members may also note that the Notice of the 93rd Annual General Meeting and the Annual Report for 2019-2020 will also be available on the Bank’s website www.lvbank.com for their download. For any communication, the shareholders may also send requests to the Bank’s investors grievance email id: [email protected].

20. Voting through electronic means

In compliance with provisions of Section 108 of the Companies Act, 2013 and the Companies (Management and Administration)Rules, 2014, as amended read with Regulation 44 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the Bank is pleased to provide members holding shares in physical or dematerialized form, facility to exercise their right to vote at the 93rd Annual General Meeting (AGM) by electronic means through ‘Remote e-Voting’ services provided by National Securities Depository Limited (NSDL). The “cut-off date” for the “Remote e-Voting” is 18th September, 2020. The instructions for e-voting are given at the end of this notice. Consequently, as per the applicable statutory provisions, voting by show of hands will not be available to the shareholders at the 93rd Annual General Meeting.

21. In Compliance with the Companies (Management and Administration) Amendment Rules, 2015 and in compliance with the MCA circular dated 08th April, 2020, the Bank is also pleased to offer the facility for voting through electronic voting system from NSDL at the AGM. The Shareholders, who are eligible to vote as on the “cut-off” date being 18th September, 2020, but have not exercised their right to vote through pe-voting shall cast their votes at the AGM through electronic voting system for all the resolutions set out in the Notice. Shareholders who have exercised their right to vote through e-voting may attend the AGM through VC/OAVM but shall not be entitled to vote through electronic voting system at the AGM. A person who is not a Member as on the cut-off date should treat the Annual Report of the Bank for the Financial Year 2019-20, the Notice of the 93rd Annual General Meeting and Explanatory Statement for information purposes only.

22. By virtue of clause 127 (2) of the Articles of Association of the bank, no suit or other proceeding by or at the instance of any Member of the Bank relating to any General Meeting of the Bank, whether Annual General Meeting or Extraordinary General Meeting or meetings of Board or Committee of Directors, seeking any direction with reference to such meeting or to restrain any proceedings thereat or the passing of any resolution or the transaction of any business shall be instituted in any Court other than the Courts in Karur / Chennai which is the places of residence of the Bank for this purpose by reason of location of its Registered Offi ce / Corporate Offi ce respectively.

10

23. The Bank’s shares are traded in demat form in the Stock Exchanges “The National Stock Exchange of India Limited” & “BSE Limited”. SEBI vide notifi cation dated June 8, 2018, had amended the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended wherein except in case of transmission or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialized form with a Depository. From April 1, 2019, transfer of shares in physical form is not permitted. Hence, you are requested to note the same and take necessary steps to dematerialize your shares that are held in physical form.

24. As the AGM will be held through “VC” / “OAVM”, the Route Map is not annexed with this Notice.

Additional information pursuant to Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in compliance with SS – 2 - Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India (ICSI) in respect of the Director seeking re-election.

Item No. 2

Re-appointment of Shri N.Saiprasad, Director:

Shri N.Saiprasad, DIN 00137910, aged about 56 years belongs to the promoter group of the Bank. He holds Master’s Degree in Science and Master of Business Administration. He is a Non-Executive & Non-Independent Director. He has been associated with the Bank since 30.03.2019 in his present term. He has been appointed as Director under Minority Category specializing in Business category as per the provisions of Section 10A 2(a) of Banking Regulation Act, 1949. In the past, he had served on the Board of the Bank from 28.03.1990 to 25.03.1998 and from 20.03.2006 to 05.03.2014. He has about 31 years of business experience in Textile Industry. Currently, he is the Managing Partner in M/s.Venkateswara Exports, Karur and he is also a partner in few other fi rms.

The Board Committee membership details of Shri N.Saiprasad as on March 31, 2020 is as follows:

S. No. Name of the Board Committees Member / Chairman

1 Stakeholder Relationship Committee Chairman

2 Nomination, Remuneration & Compensation Committee Member

3 Management Committee Member

4 HR Committee of the Board Member

Further, he does not hold any directorship in any other Company as on 31.03.2020. He holds 63,865 equity shares in the bank as on 31.03.2020.

Being a Non-Executive and Non-Independent Director, Shri N.Saiprasad does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings.

The details of his Board / Board Specialized Committee meetings attendance during the year 2019-20 are as follows:

No. of Board Meetings entitled to

attend

No. of Board Meetings Attended

Percentage of attendance in

Board meetings

No. of committee meetings entitled

to attend

No. of Committee Meetings attended


Committee meetings

27 27 100% 36 31 86.11%

In the opinion of the Board, associating with Shri N.Saiprasad has been and further will be of immense benefi t to the Bank on account of his business knowledge and long standing experience with the Bank and it is desirable to continue to avail services of Shri N.Saiprasad as a Non-Executive and Non-Independent Director liable to retire by rotation. Accordingly, the Board recommends the resolution in relation to re-appointment of Shri N.Saiprasad as Non-Executive and Non-Independent Director, for the approval by the shareholders of the Bank as an Ordinary Resolution.

Shri N.Saiprasad is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Shri N.Saiprasad is concerned or interested, fi nancial or otherwise, in this resolution.

11

Item No. 3

Note on appointment of Statutory Central Auditors:

M/s. P. Chandrasekar LLP, Chartered Accountants, Bangalore was appointed as the Statutory Central Auditors by the Members at the 92nd Annual General Meeting held on 27.09.2019 to hold offi ce from the conclusion of the 92nd Annual General Meeting till conclusion of the 93rd Annual General Meeting. In terms of Section 139 of the Companies Act, 2013, the approval is being sought from the members for the re-appointment of M/s. P. Chandrasekar LLP, Chartered Accountants as Statutory Central Auditors for the fi nancial year 2020-21.

The Audit Committee of the Board and the Board of Directors have recommended the re-appointment of M/s. P. Chandrasekar LLP, Chartered Accountants, Bangalore, as the Statutory Central Auditors of the bank to audit the accounts for the fi nancial year 2020-2021 including Tax Audit and also to conduct “Limited Reviews” occurring between ensuing Annual General Meeting and Next Annual General Meeting. The Bank had requested for an approval from the Reserve Bank of India as per applicable provisions of the Banking Regulation Act, 1949 and the Reserve Bank of India has accordingly approved the same vide their letter ref DOS.ARG.No.PS-12/08.14.005/2019-20 dated June 12, 2020. The proposed annual remuneration for the Statutory Auditors is `30,00,000/- (Rupees Thirty Lakhs only) plus out of pocket expenses and applicable GST. The resolution also authorizes the Board of Directors on the recommendations of the Audit Committee of the Board, to make such revision to the annual remuneration as it may deem necessary based on regulatory advice or on mutually agreed terms with the Statutory Auditors.

Basis of recommendation for appointment including the details in relation to and credentials of the statutory auditor(s) proposed to be appointed:

M/s. P. Chandrasekar LLP, Chartered Accountants, Bangalore was established in the year 1988. They have 11 partners with experience in various fi elds. They are empanelled with All India Financial Institutions like LIC, Regulatory Authorities like RBI, SEBI and IRDA, Comptroller & Auditor General of India, Central / State Registrar of Co-operative Societies, High court of Madras / Offi cial Liquidator, High Court of Karnataka / Offi cial Liquidator, Nationalized and other Private Banks, NABARD and Ministry of Finance- income Tax department for carrying out Special Audits. They have handled Central Statutory / Concurrent / Revenue and Systems Audit for various Public Sector Undertakings. The Firm satisfi es the minimum standards prescribed under the RBI Circular dated 30.01.2001 that are required to be satisfi ed by Audit fi rms for appointment as Statutory Auditors of Private Sector banks.

Accordingly it is being proposed and recommended by the Board to re-appoint M/s. P. Chandrasekar LLP, Chartered Accountants, Bangalore, Firm Registration No.000580S/S200066 to hold offi ce from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting.

None of the Directors and Key Managerial Personnel and their relatives are in anyway concerned or interested, fi nancial or otherwise, in this resolution.

Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013

Item No. 4

In terms of Section 143(8) of the Companies Act, 2013, the Branch Offi ces of the Bank have to be audited either by Statutory Auditors or other qualifi ed Auditors. Bank intends to entrust the Audit of Branch Offi ces either to the Statutory Central Auditors or to other qualifi ed Auditors in consultation with Statutory Central Auditors on such remuneration and on such terms and conditions as the Board deems fi t based on the recommendations of the Audit Committee of the Board.

None of the Directors of the bank and Key Managerial Personnel of the bank and their relatives is interested, fi nancial or otherwise, in this resolution.

Your Directors recommend the passing of the resolution in Item No. 4 as per the aforementioned Notice.

Item No. 5

Shri S.Sundar, DIN 08655632 is aged about 65 years. He holds a Bachelor’s Degree in Commerce, CAIIB and is a Chartered Accountant. He started as Probationary Offi cer with Andhra Bank and has more than 41 years of working experience in various banks viz., Andhra Bank, City Union Bank and Lakshmi Vilas Bank. He was serving as Chief Financial Offi cer of our Bank from 27.04.2018 till 31.12.2019.

Reserve Bank of India vide letter ref DoR.Appt.No.5227/08.44.001/2019-20 dated 31.12.2019 had conveyed their approval for appointment of Shri S Sundar as (Interim) Managing Director & Chief Executive Offi cer of the Bank w.e.f January 01, 2020 to April 30, 2020 or till regular MD & CEO assumes charge whichever is earlier, as per which, Shri S.Sundar was co-opted as Additional Director on 31st December, 2019 and appointed as the Managing Director & Chief Executive Offi cer (Interim) of the Bank. Accordingly, he has taken charge as the MD & CEO of the Bank on 1st January, 2020. Further, as per the approval(s) issued by the RBI, the term of Shri S.Sundar, MD & CEO stands extended till November 30, 2020 or till a new MD & CEO takes charge, whichever is earlier.

12

Shri S.Sundar is classifi ed as Executive Director (Whole time Director) in compliance with the applicable provisions of the Companies Act and SEBI Regulations in Non-Independent category. Shri S Sundar is appointed as Director under Majority category specializing Banking & Accountancy as per the provisions of Section 10A 2(a) of Banking Regulation Act, 1949.

During his period as MD & CEO (Interim) he is drawing Remuneration of `72 lacs per annum (fi xed pay)and also provided offi cial car and driver.

Pursuant to the provisions of section 196 of the Companies Act, 2013, the appointment of the Managing Director and the terms and conditions of such appointment and remuneration payable to him is placed before the shareholders for approval.

The Board Committee membership details of Shri S.Sundar as on March 31, 2020 is as follows:


1 Special Committee for monitoring and following up cases of Frauds Chairman

2 Customer Service Committee Chairman

3 Management Committee Chairman

4 HR Committee Chairman

5 Committee of Directors for Capital Raising Chairman

6 Review Committee on Wilful Defaulter and Non cooperative Borrowers Chairman

7 NPA Review Committee Chairman

8 Risk Management Committee Member

9 IT Strategy Committee Member

10 CSR Committee Member

He does not hold any equity shares in the Bank as on 31.03.2020. Further, he does not hold any directorship in any other listed company as on 31.03.2020.



attend



Board meetings


to attend



Committee meetings

4 4 100% 20 16 80%

Shri S Sundar is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Shri S Sundar is concerned or interested, fi nancial or otherwise, in this resolution.

Your Directors recommend the passing of the resolution in Item No. 5 as per the aforementioned Notice.

This Explanatory Statement may also be regarded as a disclosure under Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SS – 2 - Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India (ICSI).

Item No. 6

Shri Gorinka Jaganmohan Rao, DIN 06743140 is aged about 66 years. He holds a Master’s Degree in Economics. He was earlier (from December 2013 – December 2018) the Managing Director of Bank Note Paper Mill India Private Limited which was established in Mysore to produce currency paper in India. Prior to this he was holding the position of Principal Chief General Manager in the Department of Banking Supervision in Reserve Bank of India. He had taken VRS in December 2013 to take up the post of MD in Bank Note Paper Mill India Private Limited. He had also headed the Bhubaneshwar Regional Offi ce, RBI as Regional Director. He had worked as a General Manager and Chief General Manager in Foreign Exchange Department in Central Offi ce.

He was appointed as an Additional Director in Non-Executive & Independent Category on 02nd December, 2019. He has been appointed as Director under Majority Category specializing in Risk Management, Payment & Settlement Systems, Finance and Banking as per the provisions of Section 10A 2(a) of Banking Regulation Act, 1949.

13

The Board Committee membership details of Shri Gorinka Jaganmohan Rao as on March 31, 2020 is as follows:


1 Risk Management Committee Chairman

2 Audit Committee Member




6 Committee of Directors for Capital Raising Member

Being a Non-Executive and Independent Director, Shri Gorinka Jaganmohan Rao, does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings.

He does not hold any equity shares in the bank as on 31.03.2020.

The details pertaining to the directorships and Committee Position held by him in other Companies are as follows.

S. No Name of the CompanyStatus

(Listed / Unlisted)Name of the Committee

Chairmanship / Membership position

1 lndia Bulls Trustee Company Limited Unlisted NIL



attend



Board meetings


to attend



Committee meetings

7 7 100% 9 9 100%

In the opinion of the Board, Shri Gorinka Jaganmohan Rao fulfi ls the conditions specifi ed in the Companies Act, 2013 and rules made there under for his appointment as an Independent Director of the bank and is independent of the management. The Board considers that his Risk Management, Payment & Settlement Systems, Finance and Banking expertise would be of immense benefi t to the Bank and it is desirable to avail services of Shri Gorinka Jaganmohan Rao as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Shri Gorinka Jaganmohan Rao as a Non-Executive and Independent Director for a period of two (2) years, for the approval by the shareholders of the Bank as an Ordinary Resolution.

Shri Gorinka Jaganmohan Rao is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Shri Gorinka Jaganmohan Rao is concerned or interested, fi nancial or otherwise, in this resolution.


Item No. 7

Shri Raghuraj Gujjar, DIN 02734451 is aged about 65 years. He holds a Bachelor’s Degree in Commerce and is a Chartered Accountant. He was Chief Financial Offi cer of M/s.Bhoruka Power Corporation Limited from 1990 till 2008 and since 2009, Director and CEO of M/s.Kare Power Resources Private Limited and Managing Director since 01.04.2017. He is also the Managing Director of M/s.Brindavan Hydropower Private Limited since 01.04.2017. He was also the Non-Executive Chairman (Non–Independent) of our Bank from April 2013 – April 2015.

He was appointed as an Additional Director in Non- Executive & Non Independent Category on 02nd December, 2019. He has been appointed as Director under Minority Category specializing in Accountancy as per the provisions of Section 10A 2(a) of Banking Regulation Act, 1949.

1414

The Board Committee membership details of Shri Raghuraj Gujjar as on March 31, 2020 is as follows:




3 HR Committee Member


Being a Non-Executive and Non-Independent Director, Shri Raghuraj Gujjar, does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings.

He holds 7,66,948 equity shares in the bank as on 31.03.2020. The details pertaining to the directorships and Committee Position held by him in other Companies are as follows.

S. No Name of the CompanyStatus


Chairmanship / Membership

position

1 Innovaneer Realtors Private Limited Unlisted

NIL

2 Mahadeshwara Power Private Limited Unlisted

3 Pranava City Complex Private Limited Unlisted

4 Brindavan Hydropower Private Limited Unlisted

5 Kare Power Resources Private Limited Unlisted



attend



Board meetings


to attend



Committee meetings

7 7 100% 6 6 100%

In the opinion of the Board, associating with Shri Raghuraj Gujjar has been and further will be of immense benefi t to the Bank on account of his vast experience and knowledge in accountancy and hence it is desirable to continue to avail services of Shri Raghuraj Gujjar as a Non-Executive and Non-Independent Director liable to retire by rotation. Accordingly, the Board recommends the resolution in relation to re-appointment of Shri Raghuraj Gujjar as Non-Executive and Non-Independent Director, for the approval by the shareholders of the Bank as an Ordinary Resolution.

Shri Raghuraj Gujjar is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Shri Raghuraj Gujjar is concerned or interested, fi nancial or otherwise, in this resolution. It may however be noted that Shri Raghuraj Gujjar is currently the managing director of Kare Power Resources Private Limited and Brindavan Hydropower Private Limited, which are promoter group entities belonging to Shri K R Pradeep, the Promoter and non-executive director of the Bank, who holds 2,01,95,000 (94.59%) equity shares and 2,07,10,024 (99.99%) equity shares in those two entities respectively.


Item No. 8

Shri Shakti Sinha, DIN 02876853 is aged about 63 years. He holds a Master’s Degree in Arts specialized in Public Policy and History. He was in the Indian Administrative Service of 1979 batch in AGMUT Cadre. He was in the Civil Service at different levels for over three decades. He was the Managing Director of Goa State Co-operative Bank from 1985 to 1987 and Chief Managing Director of Delhi State Industrial & Infrastructure Company. He was the Principal Secretary, Finance Department, Government of Delhi. Further during his tenure in the Indian Administrative Service, he was the Chief Secretary, Andaman & Nicobar; Principal Secretary (Finance & Power), Delhi, Private Secretary / Joint Secretary to Prime Minister.

15

He was appointed as an Additional Director in Non-Executive & Independent Category on 02nd December, 2019. He has been appointed as Director under Majority Category specializing in Economics, Co-operation, Law, Finance and Human Resources as per the provisions of Section 10A 2(a) of Banking Regulation Act, 1949.

The Board Committee membership details of Shri Shakti Sinha as on 31.03.2020 is as follows:


1 Special Committee for monitoring and following up cases of Frauds Member

2 Customer Service Committee Member



5 CSR Committee Member

He does not hold any equity shares in the bank as on 31.03.2020. Further, he does not hold any directorship in any other Company as on 31.03.2020.

Being a Non-Executive and Independent Director, Shri Shakti Sinha, does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings.



attend



Board meetings


to attend



Committee meetings

7 6 85.71% 6 6 100%

In the opinion of the Board, Shri Shakti Sinha fulfi ls the conditions specifi ed in the Companies Act, 2013 and rules made there under for his appointment as an Independent Director of the bank and is independent of the management. The Board considers that his vast expertise in civil service across varied positions would be of immense benefi t to the Bank and it is desirable to avail services of Shri Shakti Sinha as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Shri Shakti Sinha as a Non-Executive and Independent Director for a period of two (2) years, for the approval by the shareholders of the Bank as an Ordinary Resolution.

Shri Shakti Sinha is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Shri Shakti Sinha is concerned or interested, fi nancial or otherwise, in this resolution.


Item No. 9

Shri Satish Kumar Kalra, DIN 01952165 is aged about 63 years. He holds a Master’s Degree in Science & Management and CAIIB. He has served in various capacities in Banking industry viz., General Manager (Treasury) in Allahabad Bank, Whole Time Director on Board & Executive Director in Andhra Bank and Managing Director & CEO (In-charge) – Andhra Bank (6 Months). His experience in the Banking industry is for about 37 years and has exposure in various areas such as Banking, NPA, Credit, Treasury Management, Risk Management, Business Management, Finance and Human resources. He was a Director in India First Life Insurance Company Ltd, and presently an Independent director in PNB GILTS. He is also a Member of the Advisory Board for Banking and Financial Frauds (ABBFF).

He was appointed as an Additional Director in Non-Executive & Independent Category on 02nd December, 2019. He has been appointed as Director under Majority Category specializing in Banking, Risk Management, Business Management, Finance and Human Resources as per the provisions of Section 10A 2(a) of Banking Regulation Act, 1949.

16

The Board Committee membership details of Shri Satish Kumar Kalra as on 31.03.2020 is as follows:






5 Review Committee on Wilful Defaulter and Non cooperative Borrowers Member

He does not hold any equity shares in the bank as on 31.03.2020. The details pertaining to the directorships and Committee Position held by him in other Companies are as follows.

S. No. Name of the CompanyStatus



1 PNB Gilts Limited Listed

Risk Management Committee, IT Strategy Committee

Chairman

Audit Committee, Nomination & Remuneration Committee, Share Transfer and Issue of duplicate

Shares Committee

Member

Being a Non-Executive and Independent Director, Shri Satish Kumar Kalra, does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings.



attend



Board meetings


to attend



Committee meetings

7 7 100% 6 6 100%

In the opinion of the Board, Shri Satish Kumar Kalra fulfi ls the conditions specifi ed in the Companies Act, 2013 and rules made there under for his appointment as an Independent Director of the bank and is independent of the management. The Board considers that his Banking knowledge and expertise in varied Banking areas would be of immense benefi t to the Bank and it is desirable to avail services of Shri Satish Kumar Kalra as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Shri Satish Kumar Kalra as a Non-Executive and Independent Director for a period of two (2) years, for the approval by the shareholders of the Bank as an Ordinary Resolution.

Shri Satish Kumar Kalra is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Shri Satish Kumar Kalra is concerned or interested, fi nancial or otherwise, in this resolution.


Item No. 10

Smt.Meeta Makhan, DIN 07135150 is aged about 45 years. She holds a Bachelor’s degree in Economics and a Post Graduate Diploma in Management from Indian Institute of Management, Lucknow. She has more than 20 years’ experience in corporate and institutional banking across multinational banks in India. She is the Founder and Director of DoUndo Services Private Limited, was an Advisor at Urban Greens business at IFFCO Kisan Sanchar Limited (IKSL). She has served in various capacities in the following Banks viz., Citibank NA, Standard Chartered Bank, Barclays Bank Plc, Bank of America and IDFC Bank.

17

She was appointed as an Additional Director in Non- Executive & Independent Category on 23rd January, 2020. She has been appointed as Director under Majority Category specializing in Banking and Business Management as per the provisions of Section 10A 2(a) of Banking Regulation Act, 1949.

The Board Committee membership details of Smt. Meeta Makhan as on 31.03.2020 is as follows:






She does not hold any equity shares in the bank as on 31.03.2020.

The details pertaining to the directorships and Committee Position held by her in other Companies are as follows.




1 Asian Hotels (West) Limited ListedStakeholders Relationship

CommitteeChairman

2 Doundo Services Private Limited Unlisted

NIL3 Advent Enterprises Private Limited Unlisted

4 One File Technology Private Limited Unlisted

Being a Non-Executive and Independent Director, Smt. Meeta Makhan, does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings.

The details of her Board / Board Specialized Committee meetings attendance during the year 2019-20 are as follows:


attend



Board meetings


to attend



Committee meetings

3 3 100% 3 3 100%

In the opinion of the Board, Smt. Meeta Makhan fulfi ls the conditions specifi ed in the Companies Act, 2013 and rules made there under for her appointment as an Independent Director of the bank and is independent of the management. The Board considers that her expertise would be of immense benefi t to the Bank and it is desirable to avail services of Smt. Meeta Makhan as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Smt. Meeta Makhan as a Non-Executive and Independent Director for a period of two (2) years, for the approval by the shareholders of the Bank as an Ordinary Resolution.

Smt. Meeta Makhan is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Smt. Meeta Makhan is concerned or interested, fi nancial or otherwise, in this resolution.


Item No. 11

Shri K.R.Pradeep, DIN 00153097, aged about 59 years is one of the Promoters of the Bank. He holds a Bachelors of Business Management Degree, a qualifi ed Chartered Accountant and LLB. He practiced as a Chartered Accountant for more than 33 years with specialization in the areas of Direct Taxes and appeared before various Income Tax Authorities including Commissioner of Income Tax – Appeals, Income Tax Appellate Tribunals, Settlement Commission, High Courts and Supreme Court. He is also a consultant and advisor to various groups of industries and multinational companies in India. Presently, a Practicing Advocate and Member of Supreme Court Bar Association. He is a Partner at Singh & Singh law Firm LLP.

18

Earlier he served as Director in the Board of the Bank from 27.02.2009 to 26.02.2017.

He was appointed as an Additional Director in Non-Executive & Non Independent Category on 23rd January, 2020 in his present term. He has been appointed as Director under Minority Category specializing in Accountancy & Law as per the provisions of Section 10A 2(a) of Banking Regulation Act, 1949.

The Board Committee membership details of Shri K R Pradeep as on 31.03.2020 is as follows:


1 Stakeholder Relationship Committee Member



Being a Non-Executive and Non-Independent Director, Shri K R Pradeep, does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings.



attend



Board meetings


to attend



Committee meetings

3 1 33.33% 1 1 100%

Shri K R Pradeep holds 67,30,378 equity shares in the bank as on 31.03.2020.

The details pertaining to the directorships and Committee Position held by him in other Companies are as follows.


(Listed / Unlisted)

Name of the CommitteeChairmanship/

Membership position

1 Pranava Electronics Private Ltd. Unlisted NIL

2Kare Electronics and Development Private Limited.

Unlisted CSR Committee Member

3 Kare Power Resources Private Ltd Unlisted

NIL

4 Brindavan Hydropower Pvt Ltd Unlisted

5 Pranava City Complex Private Limited Unlisted

6 Innovaneer Realtors Private Limited Unlisted

7 Pranava DMCC Unlisted

8 Vision EL-Tech and Services Pvt Ltd. Unlisted

9 Celestial Techsoft and Services Pvt. Ltd. Unlisted

10 Soni Exim Private Limited Unlisted

In the opinion of the Board, associating with Shri K.R.Pradeep has been and further will be of immense benefi t to the Bank on account of his vast experience and knowledge and hence it is desirable to continue to avail services of Shri K.R.Pradeep as a Non-Executive and Non-Independent Director liable to retire by rotation. Accordingly, the Board recommends the resolution in relation to re-appointment of Shri K.R.Pradeep as Non-Executive and Non-Independent Director, for the approval by the shareholders of the Bank as an Ordinary Resolution.

Shri K.R.Pradeep is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Shri K.R.Pradeep is concerned or interested, fi nancial or otherwise, in this resolution.


19

Item No. 12

Shri B.K.Manjunath, DIN 00319891, aged about 60 years was re-appointed as an Additional Director in Independent Category on 10th June, 2020. He is a qualifi ed Chartered Accountant and practicing since 01.04.1990. He has more than 30 years of experience in the fi elds of Audit, Accountancy, Taxation and Finance Business Management and Administration.

Earlier he served as a Non Executive and Independent Director of the Bank and as the Part time Chairman of the Bank on 06.06.2017 for a period of 3 years and as the Chairman of the Audit Committee of the Board from 07.06.2017 to 05.06.2020 among other committees and his term completed on 05.06.2020. He had also served as Independent Director from14.08.2008 to 13.01.2015 and as Chairman of the Audit Committee of the Board from 20.04.2009 to 13.01.2015 among other committees. He has been appointed as Director under Majority Category specializing in Accountancy as per the provisions of Section 10A 2(a) of Banking Regulation Act, 1949.

Shri B.K.Manjunath has served the Bank earlier as Non Executive and Independent Director and as per the provisions of the Companies Act, 2013, he is eligible for re-appointment as Non Executive & Independent Director.

In compliance with the applicable provisions of the Companies Act, 2013, the candidature of Shri B.K.Manjunath is being recommended by the Board of Directors to the shareholders for approval by way of a Special Resolution – being the second consecutive term of offi ce.

The Board Committee membership details of Shri B.K.Manjunath as on 31.03.2020 is as follows:


1 Audit Committee Chairman

2 IT Strategy Committee Chairman

3 Corporate Social Responsibility Committee Chairman

4 NPA Review Committee Member

Being a Non-Executive and Independent Director, Shri B.K.Manjunath, does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings.



attend



Board meetings


to attend



Committee meetings

27 27 100% 67 66 98.51%

He holds 2,12,839 equity shares in the bank as on 31.03.2020. Further, he does not hold any directorship in any other Listed Company as on 31.03.2020.

Shri B.K.Manjunath is a Director in M/s. Bhramaputra Power Private Limited. He does not hold any Committee position in that Company.

Summary of Performance Evaluation Report:

Shri B.K.Manjunath was appointed as the Part-Time Chairman of the Bank with effect from 06.06.2017 with prior approval of RBI. Being a Practicing Chartered Accountant since 01.04.1990 and having more than 30 years of experience in the fi elds of Audit, Accountancy, Taxation and Finance. etc., his inputs during the meeting deliberations are considered valuable by the other members. Since he had served the Bank for past many years, his knowledge about our Bank and its operations is very wide and rich. Earlier he served as an Independent Director of the Bank from 14.08.2008 to 13.01.2015 and as Chairman of the Audit Committee of the Board from 20.04.2009 to 13.01.2015 among other committees, which further strengthens his understanding of the Bank and its Business.

In the opinion of the Board, Shri B.K.Manjunath had served the Bank for about 10 years, his knowledge about our Bank and its operations is very wide and rich. Hence considering his long association with the Bank, on account of his expertise and experience in the fi eld of Accountancy and since he continues to hold the same, it has been felt necessary to continue to avail his services as an Independent Director, He has actively contributed as member of the Board, providing his independent perspective. Accordingly, the Board recommends the resolution in relation to appointment of Shri B.K.Manjunath as a Non-Executive and Independent Director for a period of two (2) years, for the approval by the shareholders of the Bank as a Special Resolution.

Shri B.K.Manjunath is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Shri B.K.Manjunath is concerned or interested, fi nancial or otherwise, in this resolution.

20


Item No. 13

Shri Y.N.Lakshminarayana Murthy, DIN 075348361, aged about 67 years was re-appointed as an Additional Director in Independent Category on 30th July, 2020. He is a Ph.D., holder in Soil Science and Agricultural Chemistry with a career spanning about 41 years in various positions in the University of Agricultural Sciences, Bangalore. He also had the distinction of serving as a member of the Technical Assessment Committee of Central Tobacco Research Institute, Rajahmundry, AP for a period of two years from 2011. Being a distinguished academician, he has contributed to the farming community, by implementing several projects sponsored by Govt. of Karnataka, ICAR, Central institutions besides publishing research papers, popular articles and booklets.

Earlier he served as Non Executive and Independent Director of the Bank from 10.06.2016 as Additional Director, further appointed by the Shareholders w.e.f 18.07.2017 for a period of 3 years till 17.07.2020. He has been appointed as Director under Majority Category specializing in Agriculture and Rural Economy as per the provisions of Section 10A 2(a) of Banking Regulation Act, 1949.

Shri Y.N.Lakshminarayana Murthy has served the Bank earlier as Non-Executive and Independent Director and as per the above provisions of the Companies Act, 2013, he is eligible for re-appointment as Non Executive & Independent Director

In compliance with the applicable provisions of the Companies Act, 2013, the candidature of Shri Y.N.Lakshminarayana Murthy is being recommended by the Board of Directors to the shareholders for approval by way of a Special Resolution – being the second consecutive term of offi ce.

The Board Committee membership details of Shri Y.N.Lakshminarayana Murthy as on 31.03.2020 is as follows:


1 Nomination, Remuneration & Compensation Committee Chairman

2 Stakeholder Relationship Committee Member



5 NPA Review Committee Member

Being a Non-Executive and Independent Director, Shri Y.N.Lakshminarayana Murthy, does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings.



attend



Board meetings


to attend



Committee meetings

27 25 92.59% 47 46 97.87%

He holds 6,626 equity shares in the bank as on 31.03.2020. Further, he does not hold any directorship in any other Company as on 31.03.2020.

Summary of Performance Evaluation Report:

Shri Y.N.Lakshminarayana Murthy, served as Independent Director of the Bank from 10.06.2016 till 17.07.2020. Being a specialist in the fi eld of agriculture and holder of a Doctorate in Soil Science and Agricultural Chemistry, his contribution in the discussions pertaining to priority sector lending, business in agriculture centric areas, etc., were considered to be useful by the other members of the Board.

In the opinion of the Board, on account of his expertise and experience in the fi eld of Agriculture and Rural Economy and since he continues to hold the same, it has been felt necessary to continue to avail his services as an Independent Director. He has actively contributed as member of the Board, providing his independent perspective. Accordingly, the Board recommends the resolution in relation to appointment of Shri Y.N.Lakshminarayana Murthy as an Independent Director for a period of two (2) years, for the approval by the shareholders of the Bank as a Special Resolution.

Shri Y.N.Lakshminarayana Murthy is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Shri Y.N.Lakshminarayana Murthy is concerned or interested, fi nancial or otherwise, in this resolution.

21


I tem No. 14

It is proposed to alter and increase the authorized share capital from ̀ 650,00,00,000 (Rupees Six Hundred and Fifty Crores Only) divided into 65,00,00,000 equity shares of `10/- each to ` 1000,00,00,000/- (Rupees One Thousand Crores Only) divided into 100,00,00,000 equity shares of `10/- each. Accordingly, Clause 6 of the memorandum of association of the Bank is sought to be amended to refl ect the increased capital.

The resolutions contained in Item No.14 seek to increase the authorized share capital of the Bank, as aforesaid and to alter the memorandum of association of the Bank, consequent to such increase in the authorized share capital of the Bank.

The Board of Directors recommends the Resolution set out at Item No.14 for the approval of the members of the Bank.

None of the directors of the Bank and key managerial personnel of the Bank and their relatives are concerned or interested, fi nancial or otherwise in this Resolution.

Item No. 15

The Bank has been exploring various options for raising funds for augmenting the Tier I capital funds of the Bank to support business growth as directed by RBI; including by way of issue of equity shares of the Bank of face value of ` 10/- each (the “Equity Shares”), global depository receipts (“GDRs”), American depository receipts (“ADRs”), foreign currency convertible bonds (“FCCBs”), fully convertible debentures / partly convertible debentures, preference shares convertible into Equity Shares, securities or fi nancial instruments convertible into Equity Shares, securities linked to Equity Shares, securities with or without detachable warrants with right exercisable by the warrant holders to convert or subscribe to Equity Shares or any other eligible security (hereinafter referred to as “Securities”), or any combination thereof, (including with provisions for reservations on fi rm and / or competitive basis, for such part of the issue and for such categories of persons as may be permitted and to provide a discount to the issue price to such categories of persons, as permitted under applicable law), in one or more tranches, by way of one or more public and / or private offerings, including by way further public offer in compliance with provisions of Chapter IV of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (including any amendment, modifi cation, variation or re-enactment thereof) (the “ICDR Regulations”), of a qualifi ed institutions placement in accordance with the provisions of Chapter VI of the ICDR Regulations and / or any other permitted modes through a prospectus and / or an offer document and / or a private placement offer letter and / or such other documents / writings / circulars / memoranda, by way of issue of any Securities, with or without premium, to be subscribed to in Indian and / or any foreign currencies by all eligible investors that may be permitted to invest in such issuance of Securities as per the extant regulations / guidelines.

Accordingly, the board of directors of the Bank (hereinafter referred to as the “Board” which term shall be deemed to include any Committee(s) constituted/ to be constituted by the Board to exercise its powers including powers conferred by this resolution), at its meeting held on 26th August, 2020, has accorded its approval for raising of funds by the Bank as set out above, subject to members’ approval and such other approvals as may be required under the applicable laws.

Whilst no specifi c instrument has been identifi ed at this stage, in the event, the issue will be structured in such a manner that the proceeds of the same would not exceed `1000 crores (Rupees Thousand Hundred crores only).

The resolution proposed is an enabling resolution and the detailed terms and conditions of the issue of the Securities, including the exact price, proportion and timing of the issue of the Securities and the number of tranches in which such issue be undertaken, will be decided by the Board in consultation with lead managers, advisors and such other authorities and agencies as may be required to be consulted by the Bank in due consideration of prevailing market conditions and other relevant factors after meeting the specifi c requirements. The proposal therefore seeks to confer upon the Board the absolute discretion to determine the terms of the issue. As and when the Board does take a decision on such matters on which it has the discretion, necessary disclosures will be made to the Stock Exchanges as may be required under the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As the pricing of the offer cannot be decided except at a later stage, it is not possible to state the price of Securities to be issued. However, the same (including discount permissible under Regulation 176 of the ICDR Regulations, if applicable) would be in accordance with the provisions of the ICDR Regulations, the Companies Act, 2013 read with the rules made thereunder (including any amendments, statutory modifi cation(s) and/ or re-enactment thereof for the time being in force) (the “Companies Act”), or any other guidelines /regulations / consents as may be applicable or required.

Therefore, an enabling resolution is being proposed to give Board an adequate fl exibility and absolute discretion to determine the terms of issue in consultation with the lead managers and others. The Board may at its discretion adopt any one or more of the mechanisms

22

prescribed above to meet its objectives as stated above without the need for further approval from the members of the Bank. The proposed issue of capital may be subject to the approval of the Reserve Bank of India and the Securities and Exchange Board of India, each to the extent applicable, and any other statutory /regulatory authority as may be required in this regard.

In the event of the issue of the equity shares as aforesaid is by way of a QIP: (i) the special resolution also seeks to empower the Board to undertake a QIP as defi ned by ICDR Regulations; (ii) the issue and allotment of Equity Shares shall be made only to QIBs within the meaning of the ICDR Regulations and such Equity Shares shall be fully paid up on its allotment; (iii) the Equity Shares shall not be eligible to be sold for a period of one year from the date of allotment, except on a recognized stock exchange or except as maybe permitted from time to time by the ICDR Regulations; (iv) the allotment of the specifi ed securities, or any combination of specifi ed securities, as may be decided by the Board, shall be completed within 365 days from the date of this resolution or such other time as may be permitted under the ICDR Regulations; (v) none of the promoters or directors intend to make any contribution either as part of the QIP or in furtherance of the objects of the QIP and (vi) any issue of Eligible Securities made by way of a QIP shall be at such price which is not less than the price determined in accordance with the pricing formula provided under Part IV of Chapter VI of the ICDR Regulations (the “QIP Floor Price”). The Board may, however, subject to the approval of the shareholders of the Bank, issue Equity Shares at a discount of not more than fi ve percent or such other discount as may be permitted under applicable regulations to the QIP Floor Price.

In connection with the proposed issue of Securities, the Bank is required, inter alia, to prepare various documentations and execute various agreements. The Bank is yet to identify the investor(s) and decide the quantum of Securities to be issued to them. Accordingly, it is proposed to authorize the Board to identify the investor(s), issue such number of Securities, negotiate, fi nalize and execute such documents and agreements as may be required and do all such acts, deeds and things in this regard for and on behalf of the Bank.

The ‘Relevant Date’ for this purpose will be the date as determined in accordance with the ICDR Regulations and as mentioned in the resolution.

The issue / allotment / conversion would be subject to the applicable regulatory approvals, if any. The issuance and allotment of Securities including equity shares to be allotted on conversion of Securities to foreign / non-resident investors would be subject to the applicable foreign investment cap and relevant foreign exchange regulations.

Since the proposed fund raising activities may, inter alia, result in the issue of Equity Shares to investors who may or may not be members of the Bank, consent of the members is being sought pursuant to Section 62(1) (c) and other applicable provisions of the Companies Act, 2013 as well as applicable rules notifi ed by the Ministry of Corporate Affairs, the ICDR Regulations and any other law for the time being in force and being applicable and in terms of the provisions of the Listing Regulations.

The resolutions contained in Item No. 15 of the aforementioned Notice, accordingly, seek shareholders’ approval through special resolution for raising funds as above and this special resolution, if passed, will have the effect of allowing the Board to offer, issue and allot, inter alia, Equity Shares to the investors who may or may not be the existing shareholders of the Bank. The Equity Shares thus issued, if any, shall rank in all respects pari passu with the existing Equity Shares, including entitlement of dividends, if any.

The proposed issue of Securities is in the best interest of the Bank and your directors recommend the resolution for your approval.

None of the promoters, directors and key managerial personnel of the Bank and their relatives are concerned or interested in the proposed resolution except to the extent of their shareholding in the Bank.

Item No. 16

The Bank has been borrowing funds for augmenting capital funds to support business growth as directed by RBI within the limits approved by the members of the Bank by way of issuance of various debt securities (bonds / debentures) as permitted by the RBI and in accordance with the provisions of Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof for the time being in force) and other applicable laws, from time to time. In terms of Section 42 of the Companies Act, 2013 read with Companies (Prospectus and Allotment of Securities) Rules, 2014 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof for the time being in force), the Bank is permitted to make a private placement of securities subject to the condition that the proposed offer of securities or invitation to subscribe securities has been previously approved by the members of the Bank, by a special resolution, for each of the offers or invitations / subscriptions. In case of offer or invitation for subscription of non-convertible debentures, it shall be suffi cient if the Bank passes a special resolution only once in a year for all the offers or invitation for subscription of such debentures during the year.

The Board of Directors have proposed to obtain the consent of the members of the Bank for borrowing / raising funds in Indian /foreign currency by issue of debt securities pursuant to the relevant provisions of the applicable circulars or guidelines issued by RBI, up to `500 crores (Rupees Five Hundred crores only) in aggregate, for additional Tier I and / or Tier II capital, in one or more tranches in domestic and / or overseas market, as per the structure and within the limits permitted by RBI and other regulatory authorities, to eligible investors on private placement basis, on such terms and conditions as the Board of Directors or any Committee(s) thereof or any whole-time director(s) of the Bank as may be authorized by the Board, from time to time, determine and consider proper and

23

appropriate for the Bank. This would form part of the overall borrowing limits under Section 180(1)(c) of the Companies Act, 2013. This resolution under Section 42 of Companies Act, 2013, shall be valid for a period of one year from the date of passing of the resolution.

The pricing of the debt securities referred above depends primarily upon the rates prevailing for risk free instruments, rates on other competing instruments of similar rating and tenor in the domestic or overseas markets, investor appetite for such instruments and investor regulations, which enable investments in such instruments. Further, debt securities would be issued for cash either at par or premium or at discount to the face value depending upon the prevailing market conditions, as permitted under the Laws. Accordingly, the approval of the members of the Bank is being sought by way of special resolution as set out in Item No.16 of this Notice for borrowing / raising funds in Indian / foreign currency by issue of debt securities on private placement basis.

The proposed issue is in the best interest of the Bank and your directors recommend the resolution for your approval.

None of the promoters, directors and key managerial personnel of the Bank and their relatives are concerned or interested in the proposed resolution except to the extent of their shareholding in the Bank.

Item No.17

In terms of the amended Foreign Direct Investment policy, the total holding of all eligible foreign investors including FII’s, FPI’s and NRI’s shall not exceed an aggregate limit of 74% of the total paid up share capital of the Bank, within which the aggregate NRI holding shall not exceed 24% of the total paid up capital of the Bank, after approval by the Board of Directors and the Members of the Bank by way of a special resolution and prior intimation to the Reserve Bank of India.

The previous limit approved by the shareholders at the 87th Annual General Meeting held on 26.09.2014 was 49% of the paid up equity share capital of the Bank within which the aggregate NRI holding shall not exceed 24%.

As provided in the Banking Regulation Act, 1949 and as per the provisions of the Articles of Association of the Bank, no person/group of persons shall acquire any shares of the Bank which would take his/her/its/their holding to a level of 5 percent or more (or such percent as the Reserve Bank of India may impose from time to time) of the paid-up share capital of the Bank without the prior approval of the Reserve Bank of India.

The existing aggregate holding of non-resident investors in the Bank’s equity share capital as on 31st March 2020 is approximately 12.35%. The Board of Directors of the Bank at their meeting held on 26th August, 2020, inter alia, approved, Foreign Investment by permitted foreign investors, including FII's, FDI's and NRI's up to 74% of the paid up capital of the bank within which the aggregate NRI holding shall not exceed 49% subject to individual limit of 5%.

Accordingly, the Board recommends for increase in the investment limit of foreign investors, including FII's, FDI's and NRI's up to 74% of the paid up capital of the bank within which the aggregate NRI holding shall not exceed 49% subject to individual limit of 5% of the paid up capital of the bank, for the approval by the shareholders of the Bank as a Special Resolution.

None of the directors of the Bank and key managerial personnel of the Bank and their relatives are concerned or interested, fi nancial or otherwise in this Resolution except to the extent of their shareholding in the Bank.

BY ORDER OF THE BOARDFor THE LAKSHMI VILAS BANK LIMITED

N. RAMANATHANPlace: Chennai Company SecretaryDate: 26.08.2020 ACS No. 28366

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Instructions for Remote E – Voting and Voting during the 93rd Annual General Meeting

CIN L65110TN1926PLC001377Registered Offi ce: Salem Road, Kathaparai, Karur - 639 006.

Corporate Offi ce: “LVB House”, No. 4, Sardar Patel Road, Guindy, Chennai - 600 032.Website: www.lvbank.com, Tel No.: 044-22205306, Email: [email protected]

THE LAKSHMI VILAS BANK LIMITED

Dear Shareholders,

In compliance of Sections 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, and the circulars issued by the Ministry of Corporate Affairs dated April 08, 2020, April 13, 2020, May 05, 2020 and May 12, 2020, the Bank is providing the e-voting facility to its members holding shares in physical or dematerialized form as on 18.09.2020, to exercise their right to vote by electronic means on any or all of the business specifi ed in the notice to the 93rd Annual General Meeting (“AGM”) of the Bank. The Bank has appointed M/s.JMACS Associates, Company Secretaries in Practice as the scrutinizer for conducting the e-Voting process in a fair and transparent manner. The results shall be declared not later than 48 hours from the conclusion of the AGM of the Bank. The results declared along with the Scrutinizer’s Report shall be made available on the Bank's website and shall be communicated to the Stock Exchanges.

The Bank has engaged the services of NSDL as the authorized agency to provide the e-Voting facilities. The voting period begins on 22.09.2020 at 10.00 A.M. and ends on 24.09.2020 at 05.00 PM. The remote e-voting module shall be disabled by NSDL for voting thereafter. Further, the shareholders’ may cast their vote on the date of AGM i.e. during the AGM. During this period shareholders’ of the Bank, holding shares either in physical form or in dematerialized form, as on the cut-off date 18.09.2020 may cast their vote electronically. The e-Voting module shall be disabled by NSDL for voting thereafter.

1. In view of the massive outbreak of the COVID-19 pandemic, social distancing is a norm to be followed and pursuant to the Circular No.14/2020 dated April 08, 2020, Circular No.17/2020 dated April 13, 2020 issued by the Ministry of Corporate Affairs followed by Circular No.20/2020 dated May 05, 2020, physical attendance of the Members to the AGM venue is not required and Annual General Meeting (AGM) be held through Video Conferencing (VC) or Other Audio Visual Means (OAVM). Hence, Members can attend and participate in the ensuing AGM through VC/OAVM.

2. Pursuant to the Circular No.14/2020 dated April 08, 2020, issued by the Ministry of Corporate Affairs, the facility to appoint proxy to attend and cast vote for the members are not available for this AGM. However, the Body Corporates are entitled to appoint authorised representatives to attend the AGM through VC/OAVM and participate thereat and cast their votes through e-Voting.

3. The Members can join the AGM in the VC/OAVM mode 15 minutes before and after the scheduled time of the commencement of the Meeting by following the procedure mentioned in the Notice. The facility of participation at the AGM through VC/OAVM will be made available for 1000 members on fi rst come fi rst served basis. This will not include large Shareholders (Shareholders holding 2% or more shareholding), Promoters, Institutional Investors, Directors, Key Managerial Personnel, the Chairpersons of the Audit Committee, Nomination, Remuneration and Compensation Committee and Stakeholders Relationship Committee, Auditors etc. who are allowed to attend the AGM without restriction on account of fi rst come fi rst served basis.

4. The attendance of the Members attending the AGM through VC/OAVM will be counted for the purpose of reckoning the quorum under Section 103 of the Companies Act, 2013.

5. Pursuant to the provisions of Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014 (as amended) and Regulation 44 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended), and the Circulars issued by the Ministry of Corporate Affairs dated April 08, 2020, April 13, 2020 and May 05, 2020, the Company is providing facility of remote e-Voting to its Members in respect of the business to be transacted at the AGM. For this purpose, the Company has entered into an agreement with National Securities Depository Limited (NSDL) for facilitating voting through electronic means, as the authorized agency. The facility of casting votes by a member using remote e-Voting system as well as venue voting on the date of the AGM will be provided by NSDL.

6. In line with the Ministry of Corporate Affairs Circular No.17/2020 dated April13, 2020, the Notice calling the AGM has been uploaded on the website of the Company at https://www.lvbank.com. The Notice can also be accessed from the websites of the Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com respectively and the AGM Notice is also available on the website of NSDL (agency for providing the Remote e-Voting facility) i.e. www.evoting.nsdl.com.

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7. AGM has been convened through VC/OAVM in compliance with applicable provisions of the Companies Act, 2013 read with MCA Circular No.14/2020 dated April 08, 2020 and MCA Circular No.17/2020 dated April 13, 2020 and MCA Circular No.20/2020 dated May 05, 2020.

THE INSTRUCTIONS FOR MEMBERS FOR REMOTE E-VOTING ARE AS UNDER:-

The remote e-Voting period begins on 22nd September, 2020 at 10:00 A.M. and ends on 24th September, 2020 at 05:00 P.M. The remote e-Voting module shall be disabled by NSDL for voting thereafter.

How do I vote electronically using NSDL e-Voting system?

The way to vote electronically on NSDL e-Voting system consists of “Two Steps” which are mentioned below:

Step 1: Log-in to NSDL e-Voting system at https://www.evoting.nsdl.com/

Step 2: Cast your vote electronically on NSDL e-Voting system.

Details on Step 1 is mentioned below:

How to Log-in to NSDL e-Voting website?

1. Visit the e-Voting website of NSDL. Open web browser by typing the following URL: https://www.evoting.nsdl.com/ either on a Personal Computer or on a mobile.

2. Once the home page of e-Voting system is launched, click on the icon “Login” which is available under ‘Shareholders’ section.

3. A new screen will open. You will have to enter your User ID, your Password and a Verifi cation Code as shown on the screen.

Alternatively, if you are registered for NSDL eservices i.e. IDEAS, you can log-in at https://eservices.nsdl.com/ with your existing IDEAS login. Once you log-in to NSDL eservices after using your log-in credentials, click on e-Voting and you can proceed to Step 2 i.e. Cast your vote electronically.

4. Your User ID details are given below :

Manner of holding shares i.e. Demat (NSDL or CDSL) or Physical

Your User ID is

a) For Members who hold shares in demat account with NSDL.

8 Character DP ID followed by 8 Digit Client ID

For example if your DP ID is IN300*** and Client ID is 12****** then your user ID is IN300***12******.

b) For Members who hold shares in demat account with CDSL.

16 Digit Benefi ciary ID

For example if your Benefi ciary ID is 12************** then your user ID is 12**************

c) For Members holding shares in Physical Form. EVEN Number followed by Folio Number registered with the company

For example if folio number is 001*** and EVEN is 101456 then user ID is 101456001***

5. Your password details are given below:

a) If you are already registered for e-Voting, then you can user your existing password to login and cast your vote.

b) If you are using NSDL e-Voting system for the fi rst time, you will need to retrieve the ‘initial password’ which was communicated to you. Once you retrieve your ‘initial password’, you need to enter the ‘initial password’ and the system will force you to change your password.

c) How to retrieve your ‘initial password’?

(i) If your email ID is registered in your demat account or with the Bank, your ‘initial password’ is communicated to you on your email ID. Trace the email sent to you from NSDL from your mailbox. Open the email and open the attachment i.e. a .pdf fi le. Open the .pdf fi le. The password to open the .pdf fi le is your 8 digit client ID for NSDL account, last 8 digits of client ID for CDSL account or folio number for shares held in physical form. The .pdf fi le contains your ‘User ID’ and your ‘initial password’.

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(ii) If your email ID is not registered, please follow steps mentioned below in process for those shareholders whose email ids are not registered

6. If you are unable to retrieve or have not received the “ Initial password” or have forgotten your password:

a) Click on “Forgot User Details/Password?”(If you are holding shares in your demat account with NSDL or CDSL) option available on www.evoting.nsdl.com.

b) “Physical User Reset Password?” (If you are holding shares in physical mode) option available on www.evoting.nsdl.com.

c) If you are still unable to get the password by aforesaid two options, you can send a request at [email protected] mentioning your demat account number/folio number, your PAN, your name and your registered address.

d) Members can also use the OTP (One Time Password) based login for casting the votes on the e-Voting system of NSDL.

7. After entering your password, tick on Agree to “Terms and Conditions” by selecting on the check box.

8. Now, you will have to click on “Login” button.

9. After you click on the “Login” button, Home page of e-Voting will open.

Details on Step 2 is given below:

How to cast your vote electronically on NSDL e-Voting system?

1. After successful login at Step 1, you will be able to see the Home page of e-Voting. Click on e-Voting. Then, click on Active Voting Cycles.

2. After click on Active Voting Cycles, you will be able to see all the companies “EVEN” in which you are holding shares and whose voting cycle is in active status.

3. Select “EVEN” of Bank for which you wish to cast your vote.

4. Now you are ready for e-Voting as the Voting page opens.

5. Cast your vote by selecting appropriate options i.e. assent or dissent, verify/modify the number of shares for which you wish to cast your vote and click on “Submit” and also “Confi rm” when prompted.

6. Upon confi rmation, the message “Vote cast successfully” will be displayed.

7. You can also take the printout of the votes cast by you by clicking on the print option on the confi rmation page.

8. Once you confi rm your vote on the resolution, you will not be allowed to modify your vote.

General Guidelines for shareholders

1. Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/JPG Format) of the relevant Board Resolution/ Authority letter etc. with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer by e-mail to [email protected] with a copy marked to [email protected].

2. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confi dential. Login to the e-Voting website will be disabled upon fi ve unsuccessful attempts to key in the correct password. In such an event, you will need to go through the “Forgot User Details/Password?” or “Physical User Reset Password?” option available on www.evoting.nsdl.com to reset the password.

3. In case of any queries, you may refer the Frequently Asked Questions (FAQs) for Shareholders and e-Voting user manual for Shareholders available at the download section of www.evoting.nsdl.com or call on toll free no.: 1800-222-990 or send a request to (Name of NSDL Offi cial) at [email protected]

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Process for those shareholders whose email ids are not registered with the depositories for procuring user id and password and registration of e mail ids for e-Voting for the resolutions set out in this notice:

1. In case shares are held in physical mode please provide Folio No., Name of shareholder, scanned copy of the share certifi cate (front and back), PAN (self-attested scanned copy of PAN card), AADHAR (self-attested scanned copy of Aadhar Card) by email to ([email protected] / [email protected]).

2. In case shares are held in demat mode, please provide DPID-CLID (16 digit DPID + CLID or 16 digit benefi ciary ID), Name, client master or copy of Consolidated Account statement, PAN (self-attested scanned copy of PAN card), AADHAR (self-attested scanned copy of Aadhar Card) to ([email protected] / [email protected]).

THE INSTRUCTIONS FOR MEMBERS FOR e-VOTING ON THE DAY OF THE AGM ARE AS UNDER:-

1. The procedure for e-Voting on the day of the AGM is same as the instructions mentioned above for remote e-voting.

2. Only those Members / shareholders, who will be present in the AGM through VC/OAVM facility and have not casted their vote on the Resolutions through remote e-Voting and are otherwise not barred from doing so, shall be eligible to vote through e-Voting system in the AGM.

3. Members who have voted through Remote e-Voting will be eligible to attend the AGM. However, they will not be eligible to vote at the AGM.

4. The details of the person who may be contacted for any grievances connected with the facility for e-Voting on the day of the AGM shall be the same person mentioned for Remote e-Voting.

INSTRUCTIONS FOR MEMBERS FOR ATTENDING THE AGM THROUGH VC/OAVM ARE AS UNDER:

1. Member will be provided with a facility to attend the AGM through VC/OAVM through the NSDL e-Voting system. Members may access the same at https://www.evoting.nsdl.com under shareholders / members login by using the remote e-Voting credentials. The link for VC/OAVM will be available in shareholders / members login where the EVEN of Bank will be displayed. Please note that the members who do not have the User ID and Password for e-Voting or have forgotten the User ID and Password may retrieve the same by following the remote e-Voting instructions mentioned in the notice to avoid last minute rush. Further members can also use the OTP based login for logging into the e-Voting system of NSDL.

2. Members are encouraged to join the Meeting through Laptops for better experience.

3. Further Members will be required to allow Camera and use Internet with a good speed to avoid any disturbance during the meeting.

4. Please note that Participants Connecting from Mobile Devices or Tablets or through Laptop connecting via Mobile Hotspot may experience Audio / Video loss due to Fluctuation in their respective network. It is therefore recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches.

5. Shareholders who would like to express their views/have questions may send their questions in advance (before 3 days of the AGM, excluding the date of AGM i.e. on or before 21st September, 2020) mentioning their name, demat account number / folio number, email id, mobile number at [email protected]. The same will be replied by the Bank suitably in the Annual General Meeting.

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93rd ANNUAL REPORT 2019 - 2020

BOARD OF DIRECTORS

Shri S.SunDARManaging Director & CEO

Shri G.SuDHAKARA GuPTA Shri n.SAIPRASAD Shri GORInKA JAGAnmOHAn RAO

Shri RAGHuRAJ GuJJAR Shri SHAKTI SInHA Shri SATISH KumAR KAlRA

Smt. mEETA mAKHAn Shri K.R.PRADEEP Shri B.K.mAnJunATH

Shri Y.n.lAKSHmInARAYAnA muRTHY Shri RAJnISH KumAR Shri SunDARAm SHAnKAR RBI Additional Director RBI Additional Director

ANNUAL REPORT 2019-2020

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BOARD OF DIRECTORSShri / Smt.S.Sundar - Managing Director & CEO (From 01.01.2020)G.Sudhakara Gupta N.SaiprasadGorinka Jaganmohan Rao (From 02.12.2019)Raghuraj Gujjar (From 02.12.2019)Shakti Sinha (From 02.12.2019)Satish Kumar Kalra (From 02.12.2019)Meeta Makhan (From 23.01.2020)K.R.Pradeep (From 23.01.2020)B.K.Manjunath (From 10.06.2020)Y.N.Lakshminarayana Murthy (From 30.07.2020)Rajnish Kumar – RBI Additional DirectorSundaram Shankar – RBI Additional Director (From 18.11.2019)

PRESIDENTSMeenakshi Sundaram RM

Sreeram G

SENIOR VICE PRESIDENTSPadmanabhan Premkumar

Nachiappan N

Ravindra Kumar G

Manikandan M

Gurumurthy R K

Thiruvadi S

Murli M Khemka

CHIEF FINANCIAL OFFICERHariharan K

COMPANY SECRETARYN.Ramanathan

STATUTORY AUDITORM/s.P.Chandrasekar LLPChartered AccountantsBengaluru(Firm’s Registration No.000580S/S200066)

SECRETARIAL AUDITORShri Kaliappagounder Muthusamy, Practicing Company SecretaryCoimbatore(M.No.F 5865; CP:3176)

REGISTERED OFFICESalem Road, Kathaparai, Karur-639 006, TamilnaduPhone : 04324-258501Website : www.lvbank.comE-Mail : [email protected] L65110TN1926PLC001377

CORPORATE OFFICE“LVB HOUSE”, No.4, Sardar Patel Road, Guindy, Chennai - 600 032 Tamilnadu Phone : 044 22205222

REGISTRAR AND SHARE TRANSFER AGENTM/s. Integrated Registry Management Services Private Limited II Floor, “Kences Towers”, No.1, Ramakrishna Street, North Usman Road, T.Nagar, Chennai - 600 017. Phone : 044-28140801/2/3 Fax: 28142479 Email : [email protected]


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CONTENTS Page No.

Report of Directors 3

Report of Auditors 20

Balance Sheet 28

Profi t & Loss Account 29

Cash Flow Statement 30

Schedules 31

BASEL III - Pillar 3 Disclosures 69

Certifi cate on Corporate Governance and ESOS 89

A Decade of Progress 150


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DIRECTORS’ 93rd ANNUAL REPORT

To

THE MEMBERS

The Directors of your Bank hereby are presenting the 93rd Annual Report on the business and operations of your Bank together with the Audited Accounts for the year ended 31st March, 2020 (FY 2019-20).

1. FINANCIAL PERFORMANCE

The highlights of the fi nancial performance of your Bank for the year ended 31st March, 2020 are as under:

ParticularsFor the year ended (` in crores)

31st March 2020 31st March 2019

Deposits 21443.19 29279.44

Advances (net) 13827.89 20103.26

Investments (net) 5383.83 8430.17

Total Income 2558.03 3090.21

Operating Loss (-)15.46 (-)11.97

Provisions & Contingencies 820.59 882.13

Net Loss (-)836.04 (-)894.10

At the outset, this year proved to be most diffi cult for your Bank on the back of certain events happening in our bank coupled with certain external factors.

Consequentially your bank registered a total business of ` 38116.53 crores in FY 2019-20 as against ` 51235.40 crores in FY 2018-19, a decrease of 25.61%.

Deposits fell by 26.76%, from ` 29279.44 crores as at 31st March 2019 to ` 21443.19 crores as at 31st March 2020 on the back of conscious decision to reduce bulk deposits. CASA represented 26.63% of total deposits.

Total advances (net) reduced by 31.22%, from ` 20103.26 crores to ` 13827.89 crores in the same period on the constraints arising from lower CRAR.

The total Priority Sector Advances were ` 8441.32 crores forming 34.96% of Adjusted Net Bank Credit (ANBC) against the regulatory prescription of 40% of ANBC for the FY 2019-20.

The total Agricultural Advances stood at ` 3623.68 crores forming 15.01% of ANBC against the regulatory prescription of 18.00% of ANBC. Of which, loans to Non Corporate Farmers stood at ` 2469.66 crores forming 10.23% of ANBC against the mandatory requirements of 12.11%, loans to Small and Marginal Farmers stood at ̀ 2107.47 crores forming 8.73% of ANBC against the mandatory requirements of 8.00% of ANBC for the year 2019-20.

Our Bank's advances to Micro Enterprises under MSME were at 6.28% of ANBC amounting to ̀ 1517.03 crores against the mandatory requirements of 7.50% of ANBC for the year 2019-20.

Bank's advances to Weaker Sections were ` 2260.88 crores forming 9.36% of ANBC against the mandatory requirements of 10.00% of ANBC for the year 2019-20.

The shortfall in achievement with the regulatory guidelines under priority sector, agricultural lending, micro enterprises and weaker section advances arise mainly due to reduction/repayment of advances.

The Bank's exposures to sensitive sectors including Real Estate and Capital Market were maintained well within the regulatory limits as well as overall internal ceilings prescribed for such exposures.

As at the end of the year under review, the total investments (net) of the Bank stood at ` 5383.83 crores as on 31st March 2020 as against ` 8430.17 crores as on 31st March 2019.

Your Bank's Treasury continues to focus on sound Asset-Liability Management and on servicing clients with appropriate treasury products and was managed reasonably well in a systematic way in a year when yields were constantly rising.


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2. PROFIT / LOSS

The Bank has posted an operating loss of ` 15.46 crores in FY 2019-20 against the operating loss of ` 11.97 crores in the previous year FY 2018-19. The net loss for the year, after provisions and taxes, amounted to ` 836.04 crores as against a net loss of ` 894.10 crores recorded in 2018-19.

3. APPROPRIATIONS

ParticularsFor the year ended (` in crores)

31st March 2020 31st March 2019

Profi t brought forward

Transfer from Investment Reserve (-)1565.29 (-)671.12

Amount available for appropriation 0.00 0.00

Transfer to Statutory Reserve (-)836.04 (-)894.10

Capital Reserve 59.26 0.07

Other Reserve 0.00 0.00

Investment Reserve 0.00 0.00

Special Reserve u/s 36(i)(viii)of the IT Act, 1961 0.00 0.00

Proposed Dividend/Dividend paid 0.00 0.00

Corporate Dividend Tax 0.00 0.00

Balance of profi t carried forward 0.00 0.00

(-)2460.59 (-)1565.29

4. DIVIDEND

In an environment of heightened uncertainty caused by COVID-19, it is important that banks conserve capital to retain their capacity to support the economy and absorb losses. Accordingly RBI vide circular DOR.BP.BC.No.64/21.02.067/2019-20 dated April 17, 2020 has directed all the banks not to make any further dividend pay-outs from the profi ts pertaining to the fi nancial year ended March 31, 2020 until further instructions. Further, in view of the Net Loss for the FY 2019-20, your Board of Directors is unable to recommend any dividend for the year.

Your Bank has a Board approved Dividend Distribution Policy which has been formulated in line with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended and extant RBI Circulars / Directives. The Dividend Distribution Policy is enclosed as Annexure I to the Directors’ Report. The Policy has also been made available in the website of the Bank and can be accessed at https://www.lvbank.com/Policies.aspx .

5. CAPITAL RAISING

Preferential Allotment

During the year, your Bank had allotted 1,68,00,000 Equity Shares at a price of ̀ 112/- (face value of ̀ 10/- and premium of ̀ 102/- per equity share) for an aggregate amount of ̀ 188.16 crores on 04.07.2019 to M/s. Indiabulls Housing Finance Limited under Preferential Issue as per Chapter V of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended with approval of the shareholders through an Extra-ordinary General Meeting held on 20thMay 2019.

Your Bank continues to explore various options for raising further capital and will keep the shareholders informed through necessary disclosures at the Stock Exchanges and Bank’s website.

6. STATEMENT OF DEVIATION OR VARIATION

During the year, the Bank had allotted 1,68,00,000 Equity Shares (face value of ̀ 10/- and premium of ̀ 102/-) for an aggregate amount of ` 188.16 crore, on 04th July 2019 to M/s.Indiabulls Housing Finance Limited by way of Private Placement. The issue was done in order to enhance the Capital Adequacy Ratio in line with the RBI norms. The proceeds of the issue were used primarily to enhance the Bank’s Capital Adequacy Ratio and to increase our capacity to lend and for general corporate purposes subject to compliance


5

of applicable laws. There was no variation prompting disclosure under Regulation 32 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, as amended.

7. EPS / BOOK VALUE

Earnings per Share stood at ` (-)25.16 for the year ended 31st March, 2020 as compared to ` (-) 34.66 as on 31st March, 2019. Book Value of the share, stood at ` 31.21 on 31st March, 2020 as compared to ` 53.48 as on 31st March, 2019. The Book value adjusted for DTA, Intangible assets stood at ` (-)5.63 on 31st March, 2020 as compared to ` 25.08 as on 31st March, 2019.

8. NET OWNED FUNDS / CAPITAL ADEQUACY RATIO

Net Owned Funds (NOF) of the Bank decreased from ` 1710.97 crores as at the end of FY 2019 to ` 1050.96 crores as at the end of FY 2020. The net owned funds adjusted for DTA, Intangible assets was (-) ` 189.42 crores at the end of FY 2020 as against ` 802.28 crores as at the end of FY 2019.

The Capital Adequacy Ratio (CAR) as on 31st March 2020 as per BASEL III is 1.12%. The Tier-I and Tier-II components of Capital Adequacy Ratio were maintained at (-) 0.88% and 2.00% respectively.

9. POSITION OF IND-AS IMPLEMENTATION

The Reserve Bank of India (RBI) issued a circular in February 2016, requiring scheduled commercial banks to implement Indian Accounting Standards (Ind AS) from April 1, 2018. Thereafter, RBI, vide a press release dated April 5, 2018, deferred the implementation of Ind AS by one year. Subsequently, RBI through a Circular dated March 22, 2019 has deferred the Ind AS implementation till further notice, as the legislative amendments recommended by the Reserve Bank towards implementation of Ind AS are still under consideration of the Government of India. In the meantime, RBI has advised the banks to continue submitting proforma Ind AS fi nancial statements for every quarter, starting from quarter ended June 30, 2019 with date of transition as April 1, 2019.

The Bank has engaged a Chartered Accountant Firm from Mumbai as consultant to guide the Bank in the preparation of the Proforma Ind AS fi nancial statements and also constituted a Steering Committee and commenced the process of Ind AS implementation. Bank is also in the process of identifying a suitable IT Consultant to provide appropriate software solution for treasury, a consultant to assist in the PD/LGD calculations and also to make modifi cations in the Core Banking System to enable extraction of data as per Ind AS requirement to assist for reporting under Ind AS.

In accordance with RBI directions, the Bank has been submitting Quarterly standalone proforma Ind AS fi nancial statements to the RBI, from time to time.

10. DIVERGENCE IN ASSET CLASSIFICATION AND PROVISIONING FOR NPAs

As per RBI circular no.DBR.BP.BC.No.32/21.04.018/2018-19 dated April 1, 2019, Banks are required to disclose the divergence in asset classifi cation and provisioning consequent to RBI’s annual supervisory process in their notes to accounts wherever either a) the additional provisioning requirements assessed by RBI exceeds 10 percent of the reported profi t before provisions and contingencies for the reference period and b) the additional gross NPAs identifi ed by RBI exceeds 15% of the published incremental Gross NPAs for the reference period. Accordingly the Bank has disclosed the divergence in Asset Classifi cation and Provisioning for NPAs in compliance to Risk Assessment Report (RAR) of RBI for the fi nancial year 2018-19 in the Notes to the Audited Financial Statements of the Bank and the same was also fi led with the Stock Exchanges.

11. NON-PERFORMING ASSETS (NPA)

During the FY 2019-20 the asset quality deteriorated in banking industry in general and in your bank, many accounts have slipped to NPA from different segments including Corporate, MSME & Retail. The total slippage during the FY 2019-20 was to the tune of ` 1553.24 crores. The Gross NPA as on 31st March 2020 stood at ` 4233.31 crores while the Net NPA was ` 1387.86 crores against which a provision of ` 2768.32 crores have been made. In percentage terms, the GNPA was 25.39%, Net NPA 10.04% and Provision Coverage Ratio was 71.25%. With the concerted effort of the recovery teams as well as the branches, the Bank could recover ̀ 761.38 crores from the NPA Accounts. Despite the good performance under recovery, the huge slippage of accounts to NPA overshadowed the recovery performance. It is pertinent to mention here that under the NPA Portfolio, majority of the amount is in corporate segment & again some of the accounts from corporate segment are under reference to NCLT. Hence, recovery was diffi cult due to moratorium in the accounts. With dedicated recovery team at Corporate Offi ce and Regional Offi ces, the Bank is making untiring efforts for improved recovery performance during the FY 2020-21.


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12. BRANCH AND ATM NETWORK

The Bank's network spread as on 31st March 2020 stood at 566 branches with 558 General Banking branches, 7 Commercial Banking Branches, 1 Satellite branch and 7 extension counters with its presence spread across 16 States and 3 Union Territories (Puducherry, Delhi & Chandigarh).

The Bank has added 2 new ATMs during the FY 2019-20 and the ATM network stood at 973 which includes 528 Offsite ATMs.

13. FINANCIAL INCLUSION

Financial Inclusion is aimed at providing banking and fi nancial services to all people in a fair, transparent and equitable manner at affordable cost. In other words, fi nancial inclusion is delivery of banking services at an affordable cost to vast sections of disadvantaged and low-income groups.

Inclusive growth is possible only through proper mechanism which channelizes all the resources from top to bottom. Financial inclusion is an innovative concept which uses alternative techniques to promote banking habits among people from rural and unorganized sectors.

The vision for Financial Inclusion, “convenient access to a basket of basic formal fi nancial products and services that should include savings, remittance, credit, government-supported insurance and pension products to small and marginal farmers and low income households at reasonable cost with adequate protection progressively supplemented by social cash transfers, besides increasing the access of small and marginal enterprises to formal fi nance with a greater reliance on technology to cut costs and improve service delivery”.

Your Bank is implementing fi nancial inclusion under Business Correspondent (BC) channel through M/s. Integra Microsystems Private Limited., who is our technology service provider (TSP) & Corporate Business Correspondent (CBC) covering 134 villages and 230 wards (364 outlets) linked to 142 Branches with 146 (109) BC Agents through Micro ATMs, which are enabled with AEPS (Aadhaar Enabled Payment System) and interoperable facility can offer any (bank) customers both onus/off-us transactions like deposits, withdrawals, Fund Transfer, Balance enquiry & Mini Statement transactions.

PFRDA, GOI has conducted a national level campaign titled “PLEDGE TO PERSIST” under APY for all the banks under different categories. Among the Private Sector Banks, LVB has emerged as a topper in this campaign and received an award from PFRDA as “Best Performing Bank”. Atal Pension Yojana is a Social Security Scheme introduced by Govt. of India, aimed at providing a steady stream of income after the age of 60 to all citizens of India. Under the Old Age Pension distribution 34,999 benefi ciaries are being served at their door-step every month through our Business Correspondent Model.

14. INTERNATIONAL BUSINESS

During fi nancial year 2019-20, the Rupee depreciated by nearly 8.8% against the US Dollar, when compared to 6.25% depreciation in the Previous fi scal year. The reasons for this move in the Rupee were: 1) Protectionist Trade Wars engaged by US President in the early part of fi nancial year 2) Concerns over a slowdown in economic growth in India weighed on the rupee and 3) By the last quarter of fi scal year, COVID pandemic induced economic havoc gained ground. Rupee was one of the poorest performers as compared to its Asian Peers due to external as well as internal growth woes. RBI foreign exchange reserves reached a high of USD 481 Billion in Feb 2020 only to Drop to USD 477 Billion by end of March 2020 still 16 percent gain YOY. The US Federal Reserve continuously cut the policy rate throughout the year, initially to accommodate the Trade war induced recession fears, later to accommodate stress induced by COVID pandemic. Bank of England too followed Federal Reserve in rate cuts. ECB held on to rates. In the reporting fi nancial year, the Bank has made a foreign exchange turnover of ` 5,115.62 crores and is geared for further higher growth. The export credit stood at ` 139 crores and outstanding NRI deposit (including NRE INR and F.C. deposit) is ` 970 crores.

15. LIABILITIES PRODUCTS

The imposition of PCA coupled with serious regulatory actions over some Banks has led to the Bank witnessing uncertain deposit outfl ow to the extent of ` 7843 crores in FY 2019. Though the bank had been recovering from the after-effects of PCA, the outbreak of the pandemic has ceased its momentum of growth. We will be expanding our efforts to improve our overall deposit levels in FY 2021.Key initiatives during FY19-20:

• Being a customer-centric banking institution, our focus will be on improving banking experiences for our customers. As part of a fi rm commitment to building caring relationships with senior citizens, we have introduced a new recurring deposit product exclusively for senior citizens offering them an additional rate of interest.


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• We have enriched our digital channel experiences to align with the Digital India initiative of Government of India. We will be giving the LVB VISA Signature debit card, a premium debit card to our wealth clients as part of our endeavor to offer exciting discounts and privileged banking experience to them.

• LVB has been honored with the Best Performing Private Bank Award from PFRDA on January 9, 2020

• Lakshmi Vilas Bank (LVB) has taken a giant leap forward with the launch of its digital customer connect programme LVB JOY “Just Offers for You”. It is a unique program which features exclusive offers from over 40 plus most popular online and offl ine brands across major categories such as lifestyle, dining, healthcare, groceries, shopping, travel, entertainment and business. The new product has been designed to allow senior citizens to access offers across most popular offl ine and online pharmacies, hospitals, diagnostic services, travel and groceries whereas women customers will have access to offers across most popular beauty salons, spa services, online and offl ine dining, travel, entertainment etc.

16. ALIGNING TECHNOLOGY WITH BUSINESS OBJECTIVE

Your Bank is consistently enhancing Technology platform to provide better and secured customer experience. Your Bank has introduced various new features including Personal Finance Manager Dash-Board, Self-user On-Boarding, Bharath Bill Payment Systems (BBPS), multiple fund transfers etc., in its internet banking for better customer convenience. Your Bank has enhanced its CBS system with latest API (Application Programming Interface) layer to serve you better through various online channels. Bank has implemented e-KYC based account opening at all its Branches. Your Bank has modernised its ATM machines with latest technologies to serve you better. Your Bank also has launched a new mobile responsive website with lead generation features for an effective corporate communication.

17. WEALTH MANAGEMENT / PARABANKING ACTIVITIES:

Life Insurance:

Bank has entered strategic alliance with three leading Life Insurance companies in the country, Max Life Insurance, Aditya Birla Sun Life Insurance and Pramerica Life Insurance Company Ltd to offer Life Insurance cover to the valued customers of the Bank. The products offered to our clients are more diversifi ed and tailor made to meet out their requirements.

During the Financial year 2019-20, through fresh Life Insurance premium of ̀ 22.62 Crores, 5204 lives have been covered earning fee income of ` 9.40 Crores for the Bank through Life Insurance premium collections (both fresh & renewals) during the year.

General Insurance:

Bank has tied up with Future Generali General Insurance Company Ltd & HDFC Ergo General Insurance Company Ltd to offer Non-Life Insurance products to the various customer segments. During the year, by way of General Insurance premium of ` 18.75 Crores, the assets of concerned borrowers and retail customers have been covered, besides earning a fee income of ` 1.41 Crores for the Bank through General Insurance premium collections.

Health Insurance:

Bank has tied up with M/s. Manipal Cigna Health Insurance Company Ltd to offer Health Insurance Products to the customers; earning fee income of ` 1.29 Crores for the Bank for the Health Insurance premium of ` 8.05 Crores (both fresh & renewal).

During the year, bank has enrolled 3718 new customers and protected them from their Medical emergencies.

FISDOM

Bank has tied up with M/s. Finwizard Technology Pvt Ltd (widely known as FISDOM) to offer mobile based Wealth management services to our Customers.

Fisdom enables end-to-end digital transactions for mutual funds

Here our customers can invest in equity, debt and liquid instruments through Fisdom and Fisdom has covered almost all leading AMCs.

We have acquired 5993 clients during FY20 with fresh AUM of ` 65.46 Crores

The total AUM as on 31st Mar’20 is ` 99.09 Crores

Our active Monthly SIP book is ` 2.4 Crores.


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18. RISK

The objective of risk management of the Bank is to achieve optimum return while operating within acceptable level of risk appetite. The Bank has an independent risk management function which is tasked with managing risk through policies and processes approved by the Board of Directors. These encompass identifi cation, measurement and management of risks across the various businesses of the Bank. The risk management function in the Bank strives to scientifi cally study vulnerabilities of process across business portfolios through quantitative or qualitative examination of the embedded risks and controls. The function continues to focus on refi ning and improving its risk management systems through automation of processes and building and strengthening controls. The overall risk management function of the Bank is supervised by the Risk Management Committee of the Board of Directors. The Bank has formulated and adopted a robust risk management framework. The Bank has in place internal committees such as Credit Risk Management Committee (CRMC), Asset Liabilities Committee (ALCO), Operational Risk Management Committee (ORMC), Business Continuity Management Committee (BCMC), Information Systems and Steering Committee (ISSC). These internal committees meet frequently and discuss risk related issues arising from businesses and processes and have active participation from the Top Management of the Bank. The overall risk appetite and risk philosophy of the Bank is articulated by the Management to the Risk Management Committee of the Board and Board of Directors. The risk appetite framework provides guidance to the management on the permitted levels of exposure to various businesses and maps to the business strategy of the Bank. Further the Internal Capital Adequacy Assessment Process (ICAAP) of the Bank assesses all the signifi cant risks associated with various businesses and projects the requirement of capital. The independent risk management structure within the Bank is responsible for managing the credit risk, market risk, liquidity risk, operational risk, other Pillar II risks like reputation risk and strategic risks and exercising oversight on risks associated with outsourcing. The Bank has in place well-defi ned policies appropriate for the various risks, viz. credit risk, market risk, operational risk, liquidity risk, counterparty risk, country risk, reputational risk, strategic risk and outsourcing risk. These are reviewed periodically in order to benefi t from internal and external experience. IT and cyber risk has assumed signifi cance in keeping with the rising risk in these areas and to keep pace with regulatory advisories.

19. INTERNAL CONTROLS

The Bank has an independent Audit & Inspection Department, which subjects all the branches of the Bank besides the Treasury, Currency Chests, Service Branches, Regional Offi ces and every department of the Corporate Offi ce, to regular inspection. With the launch of Commercial Banking Branches (CBB), which deals with post sanction credit administration functions like documentation, disbursement and monitoring of Corporate and MSME advances, at seven centres across the country, the CBBs are also subjected to regular annual inspection. The Bank also carries out regular IS audits covering application systems and processes in business units.

Key areas including Treasury, centralized operations departments and a large number of branches are under Concurrent Audit, which is carried out by qualifi ed external auditors and meets requirements of Risk Based Supervision. In addition, the Bank also carries out thematic audits in selected businesses / products from time to time. As part of preventive vigilance mechanism, Vigilance Audits are conducted at randomly selected branches to assess their preparedness to prevent frauds.

The Audit Committee of the Board, constituted in line with RBI guidelines and as per the requirements of SEBI Regulations, reviews the adequacy of the audit and compliance functions, including the policies, procedures and techniques. The composition of Audit Committee of the Board is provided in Annexure-C to this report.

20. HUMAN RESOURCES

After PCA, the staff strength of the Bank has come down from 4557 as on 31.03.2019 to 4349 as on 31.03.2020. In addition, 177 Sales Personnel were engaged for sales as on 31.03.2020.

The Bank’s focus on training the human resources on a continuous basis gained momentum by conducting online e-learning duly leveraging technology. Bank has trained considerable number of resources in offsite training programmes conducted by reputed training institutions such as SIBSTC, NIBM, CAB, IDRBT, IBA, CAFRAL & FEDAI. Further, the Bank had entered into a strategic training collaboration with M/s. Manipal Global Academy of BFSI for bridging the skill gap and developing the internal talent pool.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE BANK

Disclosure under Section 186 of the Companies Act, 2013 is not applicable for the Bank, being Banking Company.

22. DEPOSITS

Being a banking company, the disclosure requirement as per Rule 8(5) (v) & (vi) of the Companies (Accounts) Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013 are not applicable to the Bank.


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23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

There were no related party transactions during the year under review and Form AOC-2 is not applicable to the Bank. During the FY 2019-20, the Bank did not have any material Related Party Transaction. The Bank has an approved policy on Related Party Transactions, which has been disclosed on the website and can be viewed at https://www.lvbank.com/policies.aspx

24. OUTLOOK OF THE BANK 2020-21

The country's annual median GDP growth for 2020-21 is projected at (-) 4.5%, with the rapid spread of COVID-19 pandemic manifesting into an economic and healthcare crisis globally. The pandemic outbreak has severely impacted the economic activities as the country had to go through a lockdown to check spread of the virus. However, the restrictions are being gradually eased.

Agriculture seems to be the only sector with a silver lining right now. Even though activity in sectors like consumer durables, FMCG is gaining traction, majority of the companies are still operating at low capacity utilisation rates. Labour availability and feeble demand remain as major issues for the companies.

The Ministry of Finance in its macroeconomic June 2020 report has stated that India’s economic growth is expected to contract 4.5% in the current fi scal year. The report shows a 6.4% fall in the Gross Domestic Product number than what the government had estimated in April 2020. The Ministry highlighted that the shrinkage is because of the slower global economic growth amid the ongoing COVID-19 pandemic.

IMF's records reveal that this is the lowest ever for India since 1961. The IMF does not have the data beyond that year. However, India’s economy is expected to bounce back in 2021-22 with a robust 6% growth, it said.

The Washington-based multilateral lender said that the COVID-19 pandemic and the multi-phased lockdown imposed to curb its spread has resulted in a devastating blow to the Indian economy. In its latest edition of the Global Economic Prospect, the World Bank downgraded its projection of India by a massive negative 9%.

The Banking sector:

• The Reserve Bank of India (RBI) said India's gross domestic product (GDP) growth will be in negative territory in 2020-21 as the outbreak of coronavirus has disrupted economic activities. Reserve Bank of India (RBI) Governor said the combined impact of demand compression and supply disruption will depress economic activity in the fi rst half of the current fi scal.

• Assuming that economic activity gets restored in a phased manner in the second half of this year and taking in consideration favorable base effect, it is expected that combined fi scal, monetary and administrative measures currently undertaken by both the government and RBI create conditions for a gradual revival of activities in the second half of 2020-21.

• Prime Minister Narendra Modi announced a ` 20 lakh crores stimulus package (encompassing previously announced COVID-19 packages by the Government and RBI) equivalent to about 10% of India's GDP, aimed at making the country self-reliant and reviving the stalled economy.

• The RBI also announced a slew of measures to help the economy tide over the Covid-19 crisis. These include a six months moratorium for all term loans, special liquidity facilities, targeted long-term repo operations among other measures. It also announced signifi cant cut in key lending rate to enable banks lend to end borrowers at a cheaper rate.

• Announcing the latest Monitory Policy decisions, RBI Governor announced the RBI MPC has unanimously voted to maintain the status quo on policy rates and no further reduction. The RBI Governor also announced stimulus measures, which included additional liquidity of ` 10,000 crores at repo rate to NABARD and NHB. Among other measures, the RBI allowed stressed MSME borrowers to restructure debt if their loans were classifi ed as ‘standard’ as on 1st March 2020. The MSME loan restructuring scheme was already in place, but, due to the coronavirus, the MSME pain has been aggravated, and this warranted additional support, the Governor added. In an effort to mitigate the impact of COVID-19 on households, the RBI increased the permissible loan to value ratio (LTV) for loans sanctioned against pledge of gold ornaments and jewellery for non-agricultural purposes from 75% to 90% till 31st March 2021.

• GDP growth in 2020-21 is estimated to remain in the negative territory with some pick-up in growth impulses in the second half of 2020-21 onwards.


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25. CORPORATE GOVERNANCE

Corporate Governance of the Bank continues to rest on the fundamental pillar of high ethical values, designed to enhance and protect the interests of all the stakeholders. The Bank has complied with the corporate governance provisions as specifi ed in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“SEBI Listing Regulations”). All the Directors on the Board have executed deed of covenants and provided the declaration & undertaking individually in line with the recommendations of Dr.Ganguly Committee Report.

Further pursuant to SEBI Listing Regulations, a Management Discussion and Analysis is presented in Annexure A and Report on Board Committees is furnished in Annexure B. Composition of the Board of Directors together with the attendance of Directors at various meetings of the Board, its Committees and General Meetings and the number of directorships held by them along with the details of Audit Committee of the Board and Stakeholders Relationship Committee are furnished in Annexure C, including composition of the Audit Committee of the Board. General Shareholders’ information is furnished in Annexure D.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, the Board has carried out annual evaluation of its own performance (Board as a whole), all of its Directors, Committees of the Board, its Non-Executive Chairman and MD & CEO (interim). The manner of evaluation conducted during the year under report is furnished as under:

The performance evaluation of the Board as a whole and that of the individual Directors, Managing Director & CEO and of various committees were conducted based on the “Criteria for evaluation of Independent Directors and the Board” framed by the Nomination, Remuneration and Compensation Committee of the Board, SEBI Listing Regulations and Guidance Note on Board Evaluation issued by Securities and Exchange Board of India (SEBI).

The Board had already taken note of the evaluation made by the Independent Directors on the Board at their meeting held on 21.03.2020. During the evaluation, the Independent Directors had noted that the performance of non-independent directors and the Board as a whole was found to be satisfactory and the Independent Directors had further made the following observations:

A. Non-independent / Promoter directors are actively participating in the Board / Committee meetings and offering their ideas, involved in raising of capital.

B. The Chairman of the Board had been knowledgeable, understood the situation and had acted accordingly.

C. The meetings are conducted transparently.

D. The active participation of all the board members in the deliberations is ensured.

Based on the inputs received from the deliberations of the Independent Directors in their meeting and also considering certain specifi c criteria depending on the role of the director/committee in the Bank and the criteria for evaluation framed by the Nomination, Remuneration and Compensation Committee of the Board, the subject of board evaluation consisted of the following:

1. Evaluation of Board as a whole.

2. Evaluation of Board Committees.

3. Evaluation of Individual Directors of the Board.

Evaluation of Managing Director

Evaluation of Non-Independent Directors

Evaluation of Independent Directors

While evaluating the performance of the Board, Board Committees and Individual Directors, the Directors considered various parameters including those formulated by the Nomination, Remuneration and Compensation Committee of the Board and the Guidance Note on Board Evaluation prescribed by SEBI. Some of the factors considered included the composition and diversity of the Board, ensuring healthy Independent to Non-independent Directors ratio, manner of conduct of Board and Committee meetings, etc.

Being governed by the Banking Regulation Act, 1949, SEBI Listing Regulations and Companies Act, 2013, the mandatory Committees of the Board have been entrusted with specifi c roles and responsibilities under the relevant regulatory provisions. Besides the mandatory Committees as prescribed by the regulators, the Board has separately constituted certain Committees with specifi c reasons.


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The evaluation of Board Committees were done taking into account their mandate, composition, frequency of their meetings, independence of the Committees from the Board, contribution of the Committees to the decisions of the Board through recommendations and to the Management through decisions, etc. The Board also views the recommendations of the Committees, if any, seriously and takes it into consideration. Based on the evaluation, the performance of the Committees were found to be satisfactory.

The Managing Director & CEO (Interim) of the Bank was evaluated based on various criteria including the Business targets set and the Bank’s overall performance considering the PCA limitations, gaining of investors’ confi dence, regulatory confi dence, staff confi dence, etc., within the given limitations and the circumstances, exercising good judgement in managing the fi nancial affairs and budgets of the organization. It was assessed that he has built good working relationship with Board members and has worked closely and cooperatively with the board. He has also ensured proper coordination between the Board and the Senior Management, he demonstrates highest level of integrity (including confl ict of interest disclosures, maintenance of confi dentiality, etc.) with untiring efforts in raising capital of the Bank by interacting with various investors and creating an investor friendly environment, maintains smooth rapport with various Industry Forums and Regulatory Bodies and actively participates in Board and Committee meetings.

Considering the above criteria and the business, the members of the Board requested the Managing Director & CEO (Interim) to ensure that the Management works more proactively in improving the key business parameters, works towards achieving the business plan of the Bank and creates good quality and bankable asset portfolio.

The Non-Executive Directors (both Independent and Non-Independent) of the Bank were evaluated based on various factors including their attendance, ability to understand duties, responsibilities, qualifi cations, disqualifi cations and liabilities as a Director, coordination and rapport with fellow Board Members, approach towards confl ict resolution and their contribution in enhancing the Board’s overall effectiveness, integrity and maintaining of confi dentiality, ability to raise appropriate issues at meetings and seek necessary clarifi cations, taking advantage of opportunity to upgrade skills by attending professional development programmes, remaining abreast of various developments in the Indian banking arena and keeping up with the various modifi cations / re-enactments of statutory enactments applicable to the Bank like the Companies Act, SEBI Regulations and the Banking Regulation Act, 1949, etc.

The Independent Directors of the Bank were also provided familiarization program about the bank and their ability to bring out Independent judgment to the issues handled by the Board without getting infl uenced otherwise. The evaluation with respect to individual non-executive directors revolved around various factors as mentioned above and it was ensured that the Board members evaluated their fellow member Directors in the absence of the Director being evaluated.

26. NUMBER OF MEETINGS OF THE BOARD

During the fi nancial year, the Board met 27 times. The Board meetings were held in accordance with the provisions of the Companies Act, 2013 as amended. The details of the meetings held are provided in the Corporate Governance Report that forms part of this Annual Report.

27. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

According to the Articles of Association of the Bank, the number of Directors of the Bank shall not be less than three and more than fi fteen. The process of due diligence is undertaken in compliance of Directives / Guidelines / Circulars issued by RBI from time to time in the matter of appointment / re-appointment of Director. The Non-Executive Chairman of the Bank and the Managing Director of the Bank are appointed with prior approval of the RBI. Based on the vacancies that may arise in the Board from time to time, the Board follows a due process of appointment of directors through necessary due diligence in line with the regulatory advice given by RBI, SEBI and MCA by way of Circulars / Guidelines / Regulations / enactments. The Nomination, Remuneration and Compensation Committee of the Board has formulated criteria for evaluation for the appointment or re-appointment of directors including independent Directors.

The Managing Director & CEO of the Bank is paid remuneration as approved by the RBI but is not paid any sitting fees. The Non-Executive Chairman of the Bank is paid honorarium as approved by the RBI along with sitting fees paid for attending Board / Board Committee meetings. Other than the Managing Director & CEO and Part-time Chairman, no other directors are paid any remuneration/ honorarium. But they are paid sitting fees for attending Board and Board Committee Meetings. The details of remuneration of the Managing Director & CEO and that of the sitting fees paid to the other directors are available elsewhere in the report. The Senior Management and the other KMPs of the Bank along with other employees are paid remuneration based on internal HR policies of the Bank. The Senior Management of the Bank along with the KMPs abide by the Code of Conduct prescribed by the Bank. The code of conduct has been disclosed at the Bank’s website and can be viewed at https://www.lvbank.com/code-of-conduct.aspx. The Managing Director & CEO, Chief Financial Offi cer and Company Secretary are the Key Managerial Personnel (KMPs) of the Bank, as stipulated by the Companies Act, 2013. As on 31.03.2020, other than the Managing Director & CEO (Interim), there are no other whole-time directors in the bank.


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In line with RBI circular DBR.No.BC.97/29.67.001/2014-15 dated June 1, 2015 on Guidelines on Compensation of Non-Executive Directors of Private Sector Banks, Board of Directors had formulated a Compensation Policy. The Compensation Policy for Payment of Remuneration to Directors has been made available in the website of the Bank and can be accessed at https://www.lvbank.com/policies.aspx .

28. DECLARATION BY INDEPENDENT DIRECTORS

The Bank has duly obtained necessary declarations from each Independent Director under Section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence as laid down in section 149(6) of the Companies Act 2013, and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended and the ‘Fit and Proper’ declaration as prescribed by the Reserve Bank of India. It is confi rmed that the Independent Directors have complied with the code for Independent Directors prescribed in Schedule IV to the Companies Act as amended.

29. CONFIRMATION ON INDEPENDENT DIRECTORS

The Board confi rms that, in its opinion, the Independent Directors fulfi l the conditions specifi ed in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended and are independent of the management.

30. FAMILIARISATION PROGRAMME

Pursuant to the Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the Bank has to conduct a familiarization programme for newly inducted Independent Directors and the Bank has done accordingly. In compliance with Regulation 46 (2) (i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the details of the familiarisation programme conducted are disclosed in the website of the Bank and can be viewed at https://www.lvbank.com/independent-directors-terms-condition.aspx .

31. BOARD OF DIRECTIOS & KEY MANAGERIAL PERSONNEL

Appointments

• Smt.Supriya Prakash Sen was appointed as an Additional Director on 14th June 2019 pursuant to the provisions of Section 149 (4) and Section 161 of the Companies Act, 2013 and classifi ed as Non-Executive and Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, and representing Information Technology and Finance categories under majority sector as per Banking Regulation Act, 1949.

• Shri Gorinka Jaganmohan Rao was appointed as an Additional Director on 02nd December 2019 pursuant to the provisions of Section 149 (4) and Section 161 of the Companies Act, 2013 and classifi ed as Non-Executive and Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, representing Risk Management, Payment & Settlement Systems, Finance and Banking Category under Majority Sector as per Banking Regulation Act, 1949.

• Shri Raghuraj Gujjar was appointed as an Additional Director on 02nd December 2019 pursuant to the provisions of Section 149 (4) and Section 161 of the Companies Act, 2013 and classifi ed as Non-Executive and Non-Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, representing Accountancy category under minority sector as per Banking Regulation Act, 1949.

• Shri Shakti Sinha was appointed as an Additional Director on 02nd December 2019 pursuant to the provisions of Section 149 (4)and Section 161 of the Companies Act, 2013 and classifi ed as Non-Executive and Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, representing Economics, Cooperation, Law, Finance and Human Resources Category under Majority Sector as per Banking Regulation Act, 1949.

• Shri Satish Kumar Kalra was appointed as an Additional Director on 02nd December 2019 pursuant to the provisions of Section 149 (4) and Section 161 of the Companies Act, 2013 and classifi ed as Non-Executive and Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, representing Banking, Risk Management, Business Management, Finance and Human Resources Category under Majority sector as per Banking Regulation Act, 1949.


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• Smt. Meeta Makhan was appointed as an Additional Director on 23rd January 2020 pursuant to the provisions of Section 149 (4) and Section 161 of the Companies Act, 2013 and classifi ed as Non-Executive and Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, representing Banking & Business Management Category under Minority sector as per Banking Regulation Act, 1949.

• Shri Sanjay Kumar Khemani was appointed as an Additional Director on 23rd January 2020 pursuant to the provisions of Section 149 (4) and Section 161 of the Companies Act, 2013 and classifi ed as Non-Executive and Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, representing Accountancy & Finance Category under Minority sector as per Banking Regulation Act, 1949.

• Shri K.R.Pradeep was appointed as an Additional Director on 23rd January 2020 pursuant to the provisions of Section 149 (4) and Section 161 of the Companies Act, 2013 and classifi ed as Non-Executive and Non-Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, representing Accountancy & Law category under Minority sector as per Banking Regulation Act, 1949.

• Shri B.K.Manjunath was appointed as an Additional Director on 10th June 2020 pursuant to the provisions of Section 149 (4) and Section 161 of the Companies Act, 2013 and classifi ed as Non-Executive and Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, representing Accountancy Category under Majority sector as per Banking Regulation Act, 1949.

• Shri Y.N.Lakshminarayana Murthy was appointed as an Additional Director on 30th July 2020 pursuant to the provisions of Section 149 (4) and Section 161 of the Companies Act, 2013 and classifi ed as Non-Executive and Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, representing Majority Category under Agriculture & Rural Economy sector as per Banking Regulation Act, 1949.

Resignations / Cessation of tenure of appointment

• Shri Kusuma R Muniraju retired from the Board on 19th June 2019 pursuant to Reserve Bank of India directive on Report of the consultative group of Directors of Banks/Financial Institutions (Dr. Ganguly Group) - Implementation of recommendations dated 09.09.2002 as he has attained 70 years of age.

• Smt. Supriya Prakash Sen, Non-Executive and Independent Director resigned from the Board on 02nd October 2019 after serving about 3.5 months, providing reason for her resignation as “due to personal reasons” and she had further confi rmed that there are no other material reasons other than those provided in her letter.

• Smt. Anuradha Pradeep, Non-Executive and Non Independent Director resigned from the Board on 01st November 2019.

• Shri Sanjay Kumar Khemani, Non-Executive and Independent Director resigned from the Board on 19th March 2020 after serving on the Board for about 2 months, providing reason for resignation as “Considering the role of the Committees he was inducted, he felt that he do not possess domain expertise required for effectively contributing for furtherance of the objective of these committees and therefore he felt that he would not be able to contribute much to the Bank through these Committees” and he had further confi rmed that there are no other material reasons other than those provided in his letter.

• Shri B.K.Manjunath, Part–time Chairman of our Bank had retired on 5th June 2020 on completion of his tenure of appointment approved by Reserve Bank of India in terms of Section 10B (1A) of the Banking Regulation Act, 1949.

• Shri Y.N.Lakshminarayana Murthy, Non-Executive and Independent Director of our Bank had retired on closing hours of 17th July 2020 (effective from 18th July 2020) on completion of his tenure of appointment as approved in the 90th Annual General Meeting of the Bank held on 18th July 2017.

• Shri H.S.Upendra Kamath, Non-Executive and Independent Director of our Bank had retired on closing hours of 07th August 2020 (effective from 08th August 2020) on completion of his tenure of appointment as approved in the 91st Annual General Meeting of the Bank held on 08th August 2018.

MD & CEO

• Shri Parthasarathi Mukherjee, Managing Director & CEO had submitted his resignation owing to personal reasons in the Board Meeting held on 28th August 2019 and the Board had accepted the same. Shri Parthasarathi Mukherjee was relieved from his services at the closing hours on Saturday, 31st August 2019 as per his request.


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• Shri S.Sundar was Co-opted by the Board as Additional Director of the Bank on 31st December 2019. He was also appointed as Managing Director & CEO (Interim) of the Bank with effect from 01st January 2020, after obtaining the approval from Reserve Bank of India.

RBI Additional Director:

Reserve Bank of India, Mumbai vide their letter DoR.PSBD No.3824 /16.05.013 /2019-20 dated November 18, 2019 and order DoR.PSBD No.3827/16.05.013/2019-20 dated November 18, 2019 has appointed Shri Sundaram Shankar, General Manager, Reserve Bank of India, Hyderabad Regional Offi ce as Additional Director on the Board in place of Shri Suvendu Pati, General Manager, Chennai Regional Offi ce for a period of two years with effect from November 18, 2019 to November 17, 2021 or till further orders, whichever is earlier.

Re-appointment of Director retiring by rotation:

Shri N.Saiprasad, Director will be retiring by rotation at the ensuing 93rd Annual General Meeting and being eligible, offers himself for re-appointment.

Relationship between Directors inter-se:

None of the Directors of the Board are related inter-se. It may however be noted that Shri Raghuraj Gujjar is currently the Managing Director of Kare Power Resources Private Limited and Brindavan Hydropower Private Limited, which are promoter group entities belonging to Shri K.R.Pradeep, the Promoter and non-executive director of the Bank, who holds 2,01,95,000 (94.59%) equity shares and 2,07,10,024 (99.99%) equity shares in those two entities respectively.

Key Managerial Personnel

Shri Parthasarathi Mukherjee, Managing Director & CEO of the Bank resigned & relived from the services of the Bank on 31st August 2019.

During the fi nancial year, Shri S.Sundar, Chief Financial Offi cer had resigned from the services of the Bank on 31st December 2019 and was appointed and took charge as MD & CEO (Interim) on 01st January 2020.

Apart from the above, there were no changes in the Key Managerial Personnel during the year.

Shri K.Hariharan, Vice President was appointed and took charge as the Chief Financial Offi cer of the Bank with effect from 30th June 2020.

32. LIST OF CORE SKILLS / COMPETENCIES IDENTIFIED BY THE BOARD

The Banking Regulation Act, 1949, prescribes that not less than fi fty-one percent of the total members of the Board of Directors of a Banking Company shall consist of persons who shall have special knowledge or practical experience in respect of one or more of the matters namely, Accountancy, Agriculture & Rural Economy, Banking, Co-operation, Economics, Finance, Law, Small-scale Industry, Information Technology, Payment & Settlement Systems, Human Resources, Risk Management and Business Management, any other matter the special knowledge of, and practical experience in, which would, in the opinion of the Reserve Bank of India, be useful to the Banking Company. Being a Bank, the Board of Directors are bound by the said provisions with regard to the core skills / expertise /competencies.

The details of the Board of Directors as on 31.03.2020 and further as on the date of this report with their core areas of expertise are given below:

Sl. No. Name of the Director Areas of Expertise

1 Shri B.K.Manjunath, Chairman1 Accountancy

2 Shri S.Sundar, MD & CEO (Interim) Banking and Accountancy

3 Shri Y.N.Lakshminarayana Murthy2 Agriculture & Rural Economy

4 Shri G.Sudhakara Gupta Business

5 Shri H.S.Upendra Kamath3 Banking (Practical Experience) and Small Scale Industry (Special Knowledge)

6 Shri N.Saiprasad Business

7 Shri Gorinka Jaganmohan Rao Risk Management, Payment & Settlement Systems, Finance and Banking


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Sl. No. Name of the Director Areas of Expertise

8 Shri Raghuraj Gujjar Accountancy

9 Shri Shakti Sinha Economics, Cooperation, Law, Finance and Human Resources

10 Shri Satish Kumar Kalra Banking, Risk Management, Business Management, Finance and Human Resources

11 Smt. Meeta Makhan Banking & Business Management

12 Shri K.R.Pradeep Accountancy & Law

1 Shri B.K.Manjunath retired as Chairman of the Bank on 05th June 2020 and was appointed as Additional Director under Non-Executive and Independent category of the Bank on 10th June 2020.

2 Shri Y.N.Lakshminarayana Murthy retired on 17th July 2020 and was appointed as Additional Director under Non-Executive and Independent category of the Bank on 30th July 2020.

3 Shri H.S.Upendra Kamath retired on 07th August 2020.

33. DIRECTORS’ RESPONSIBILITY STATEMENT PURSUANT TO SECTION 134(3) (c) OF COMPANIES ACT, 2013

The Board of Directors of your Bank confi rms that in the preparation of the annual accounts for the year ended March 31, 2020:

• The applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

• The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the fi nancial year and of the profi t and loss of the Company for that period.

• The Directors had taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

• The Directors had prepared the annual accounts on a going concern basis.

• The Directors had laid down internal fi nancial controls to be followed by the company and that such internal fi nancial controls are adequate and were operating effectively; and

• The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

34. SOCIAL INITIATIVES 2019-2020

Donation

Your Bank as a responsible corporate citizen has been supporting various philanthropic activities by donating such initiatives to the tune of ` 3.16 Lakhs. Further, your bank has also taken several initiatives in the area of CSR.

Corporate Social Responsibility (CSR)

In accordance with the directives of Government of India, Bank is required to spend 2% of the average net profi t of the last 3 Financial Years or any part thereof on CSR activities. The Bank has disclosed its CSR policy in the website and the same can be viewed at https://www.lvbank.com/policies.aspx. The Annual Report on the CSR activities undertaken during the year as per the format specifi ed by the Ministry of Corporate Affairs is forming part of this Report and is annexed to this Report as Annexure-E.

35. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report prepared in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended has been made available on the Bank’s website at https://www.lvbank.com/business-responsibility-report.aspx .


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36. ANNUAL RETURN

The extract of Annual Return in Form No. MGT 9 is annexed herewith as Annexure J. Pursuant to the provisions of Section 134(3) (a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, as amended, the Annual Return of the Bank as on March 31, 2020 will be made available on the website of the Bank and can be accessed at https://www.lvbank.com.

37. STATEMENT ON COMPLIANCE TO APPLICABLE SECRETARIAL STANDARDS

The Bank is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

38. PARTICULARS OF EMPLOYEES

The disclosures pursuant to the provisions (as amended) of Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the Disclosures pursuant to the provisions of Section 197 (12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure-F.

39. EMPLOYEES STOCK OPTION SCHEME

In the year 2010, the shareholders of the Bank have approved the issue of shares through Stock Option Scheme (ESOS 2010). During FY 2019-2020, total of 10,521options were exercised by the eligible employees. In the year 2017, the shareholders of the Bank have approved the issue of shares through Employees Stock Option Scheme 2017 (ESOS – 2017). The implementation of both the said Schemes is in accordance with the applicable SEBI Regulations.

All the options granted so far have been under ESOS 2010 and no options have been granted under ESOS 2017 till date. There are no material changes made in the Schemes during the year and all the schemes are in compliance of Securities and Exchange Board of India (Share Based Employee Benefi ts) Regulations, 2014. Statutory disclosures regarding ESOS have been furnished in Annexure G to the report and can be viewed at www.lvbank.com.

40. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The provisions of Section 134(1)(m) of the Companies Act, 2013 and the applicable rule under the Companies (Accounts) Rules, 2014 relating to conservation of energy and technology absorption do not apply to your Bank. The Bank has, however, used Information Technology extensively in its operations. The Bank continues to encourage the country’s exports and will endeavor to enlarge its export fi nancing.

41. DETAILS OF MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE BANK WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE BANK TO WHICH THE FINANCIAL STATEMENT RELATE AND THE DATE OF THE REPORT

1. M/s.Religare Finvest Ltd., had deposited ̀ 19,52,75,841.26 on 11.11.2016, ̀ 215,83,03,562.93 on 11.11.2016, ̀ 153,02,34,680.63 and ` 204,03,12,901.48 on 9.1.2017 with our bank. The said amounts were kept with our Janpath branch. Our Janpath branch extended deposit loan to M/s.RHL Holdings Ltd and M/s.Ranchem Ltd on 11.11.2016 and 09.01.2017 to an extent of 92% - 95% of the deposits of M/s.Religare Finvest Ltd.

The bank had liquidated the deposits of M/s.Religare Finvest Ltd on 20.02.2018 and adjusted the proceeds to the loans availed by M/s. RHL Holding Pvt. Ltd and M/s. Ranchem Ltd due to non-submission of clear intimation/communication and relevant papers/documents for continuation/renewal of deposit loan facility. M/s. Religare Finvest Ltd questioned the appropriation of said deposits into the above said loan accounts and fi led a commercial suit No.940/2018 before High Court, Delhi against the bank. In this regard, bank had obtained opinion from two different reputed law fi rm and advocates opined that the claim is not tenable and bank has got good case. The said suit is pending for hearing.

Meanwhile, RFL lodged a criminal complaint with EOW, Delhi during the pendency of the above said civil case and FIR was registered by EOW, Delhi bearing FIR No.189/2019 dated 23.09.2019 under section 409 and 120 B of IPC against the bank, RHC Holding, Ranchem and their directors & others. Further, we understand that a chargesheet has been fi led against Malvinder/Shivender Singhs & our employees and court is yet to take cognizance of the same.


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In pursuance of the above said FIR registered by the EOW, Delhi, Enforcement Directorate, New Delhi also registered a case under PMLA Act and issued summons to our Principal Nodal Offi cer to furnish certain details about Religare transaction under section 50 of PMLA Act. The investigation is still pending.

The Ministry of Corporate Affairs directed Serious Fraud Investigation Offi ce (“SFIO”) to conduct investigation into the affairs of Religare Enterprises Limited (“REL”). Accordingly, investigation has been commenced and the same is pending.

2. The Board at its meeting held on April 5, 2019 had approved the scheme of amalgamation of The Lakshmi Vilas Bank Limited (LVB) (“Transferor Company”) with Indiabulls Housing Finance Limited (IHFL) (“Transferee Company”). In furtherance to the same, based on the mutual discussion of the management of LVB and IHFL, respectively, the Board at its meeting held on May 3, 2019 had considered and approved amendments to effect merger of IHFL (“Transferor Company 1”) and its wholly owned subsidiary, Indiabulls Commercial Credit Ltd., (ICCL) (“Transferor Company 2”) into and with LVB (“Transferee Company”) under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 as amended, Companies (Compromises, Arrangements and Amalgamations) Rules 2016, and other rules and regulations framed thereunder. The Scheme was subject to the receipt of approval from the Reserve Bank of India, other Regulatory approvals and all other applicable compliances. Further, on the joint application fi led by the said three entities with Competition Commission of India (CCI) on May 10, 2019, CCI has accorded its approval by Order under Section 31(1) of the Competition Act, 2002 dated June 20, 2019. The Bank had submitted an application seeking Reserve Bank of India (RBI) approval on May, 07, 2019 for voluntary amalgamation of Indiabulls Housing Finance Limited and Indiabulls Commercial Credit Limited into and with the Lakshmi Vilas Bank Limited, however Reserve Bank of India vide letter dated October 09, 2019, informed that the application for voluntary amalgamation of lndiabulls Housing Finance Limited and lndiabulls Commercial Credit Limited with The Lakshmi Vilas Bank Limited ("LVB" or "Transferee Company") cannot be approved.

3. The Bank routinely evaluates capital raising options and proposals which are in its best interest.

The Bank has signed preliminary, non-binding letter of intent (Loi) with M/s. Clix Capital Services Private Limited ("Clix Capital") and M/s. Clix Finance India Private Limited ("Clix Finance") (collectively, the "Clix Group") as on 15thJune 2020 in relation to the proposed amalgamation of Clix Group with the Bank. Under the non-binding LoI, the proposed amalgamation is subject to completion of mutual due-diligence in exclusive window within September 15th, 2020, and will be subject to regulatory and other customary approvals. In the event the discussions between the contracting parties in relation to the proposed transaction is successful and defi nitive agreements are executed, we will make appropriate disclosures as required under the provisions of applicable law.

42. DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED, IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE BY REGULATORS OR COURTS OR TRIBUNALS

During the year under review, no Signifi cant Material Orders were passed by any regulators or courts or tribunals against the Bank other than those disclosed separately in the fi nancial statements, directors report and in the Corporate Governance Report.

43. OTHER PENALTIES IMPOSED BY REGULATORS

RBI has imposed a monetary penalty of ` 1.00 crores on Bank for non-adhering to IRAC norms observed in statutory inspection with respect to fi nancial position as on March 31, 2017.

RBI has imposed a total penalty of ̀ 83,250/- on account of defi ciency like mutilated notes etc., observed in Soiled Notes remittances made by our currency chest transactions and incoginito visit by RBI offi cials to respective branch.

44. NUMBER OF CASES FILED, IF ANY AND THEIR DISPOSAL UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In order to provide protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment and for matters connected therewith or incidental thereto, as sexual harassment results in violation of the fundamental rights of a woman to equality under Articles 14 and 15 of the Constitution of India and her right to life and to live with dignity under Article 21 of the Constitution and right to practice any profession or to carry on any occupation, which includes a right to a safe environment free from sexual harassment, a well-defi ned policy in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been adopted in the bank. The complaints registered under the Act, on actions covered under the ambit of Sexual Harassment at work place are handled by a committee represented by two senior executives of the Bank, a lady executive and an external member. Redressal of such complaints are dealt in a prudent manner, giving equal opportunity to both the aggrieved and the accused for representation of the case and without affecting the dignity and self-esteem of the women employee (permanent, contractual, temporary, trainee).


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Number of complaints pending as on the beginning of the fi nancial year - Nil

Number of complaints fi led during the fi nancial year - Nil

Number of complaints pending as on the end of the fi nancial year – Nil

45. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Disclosure of information in the public interest by the employees of an organization is increasingly gaining acceptance by Public bodies for ensuring better governance standards and probity in the conduct of affairs.

As a proactive measure for strengthening fi nancial stability and with a view to enhance public confi dence in the robustness of the fi nancial sector, RBI has formulated a scheme called “Protected disclosures scheme for private sector and foreign banks”.

In the above perspective, our Bank has formulated and implemented a “Whistle Blower Policy” which is made available in the Bank’s Website and local intranet. During the year 2019-20, no personnel has been denied access to the Audit committee. The Web link thereto is https://www.lvbank.com/UserFiles/File/WhistleBlowerPolicy_2015.pdf.

46. CODE OF CONDUCT TO REGULATE, MONITOR AND REPORT TRADING BY INSIDERS IN SECURITIES OF THE LAKSHMI VILAS BANK LIMITED

The Bank has formulated a Code of Conduct pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended, to regulate, monitor and ensure reporting of trading by the employees and other connected persons towards achieving compliance with the SEBI Regulations and is designed to maintain highest ethical standards of dealing in securities of the Bank by persons to whom it is applicable. The code of conduct and related policy are available in the Bank’s website and can be viewed at https://www.lvbank.com/insider-trading.aspx

47. AUDITORS

Statutory Auditors:

The Statutory audit of the Bank was carried out by M/s. P. Chandrasekar LLP, Chartered Accountants, Bangalore whose report is annexed and forms part of this report. The Statutory Central and Branch Auditors have audited all the branches and other offi ces of the Bank. The qualifi ed opinion of the Statutory Auditors together with the basis and our response to the same are furnished hereunder:

Observation:

Qualifi ed Opinion:

1. During the fi nancial year ended 31st March 2018, the Bank had adjusted loans aggregating to ̀ 794 crores extended to RHC Holding Private Limited and Ranchem Private Limited against deposits of Religare Finvest Limited. The said adjustment has been contested by Religare Finvest Limited and a suit has been fi led against the Bank in May 2018 before the Honourable High Court of Delhi. The matter still remains sub-judice. Further, the Economic Offences Wing, Delhi (“EOW”) has initiated proceedings against the Directors of the Bank and SEBI has sought clarifi cation on the above matter. However, as per the Bank, based on legal opinions obtained against the suit, the said appropriation is lawful and tenable and hence not made any specifi c provision on this score. The Reserve Bank of India (“RBI”) vide letter dated 21st November 2019, had advised the Bank to maintain provisions, on a prudential basis, to cover potential losses for the ‘Claim against the Bank not acknowledged as debt’ in respect of the above-mentioned matter. In case of adverse judgment, the management needs to provide an additional amount of ` 594 crores after considering the available contingent provision of ` 200 crores provided in the books. Considering the above, the Provisions (other than Tax) and Contingencies would have increased, net loss for the year would have increased, shareholders’ funds would have decreased, by Rs.594 crores each and the Capital Adequacy Ratio (Basel III) would have reduced by 4.50%.

2. Bank has reversed the cumulative provision of Rs.48.70 crores held towards revision of wages due to employees with effect from November 2017. While the Bank has cited the withdrawal of mandate given to the Indian Banks’ Association (“IBA”) to negotiate revision of salary on its behalf, as the basis for reversing the provision, there is no evidence to suggest that there will not be any liability for the wage revision with effect from November 2017. While the quantum of wage revision cannot be determined as on date, it is likely that the provision required would at least be ` 48.70 crores. Considering the above, the Employees Cost and the net loss for the year would have increased by ` 24 crores each, other income would have decreased by ` 24.70 crores and other liabilities and Provisions as at 31st March 2020 would have increased by ` 48.70 crores.


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For and on behalf of the Board of Directors

B.K.Manjunath S.Sundar Chairman of the Meeting Managing Director & CEO

Place: ChennaiDate: 26.08.2020

3. Bank has recognised net deferred tax asset of Rs.1,185.57 crores as at 31st March 2020, of which Rs.326.01 crores was created during the year ended 31st March 2020. As mentioned in Note 17 of the Financial Results, the Bank has decided not to opt for reduced corporate tax rate under Section 115BAA of the Income Tax Act and the deferred tax asset and liability have been calculated with the existing tax rate. As per the requirements of AS 22 “Accounting for Taxes on Income”, deferred tax assets should be recognised and carried forward only to the extent that there is a virtual certainty that suffi cient future taxable income will be available against which such deferred tax assets can be realised. In our opinion, considering the recurring losses and in the present scenario of the Bank going through the Prompt Corrective Action imposed by the RBI, there is no certainty that the Bank will have suffi cient future taxable income to justify the creation of deferred tax asset. Had the deferred tax asset not been created and retained, the net loss for the year would have been higher by ` 1,185.57 crores.

Response:

Impact is not Quantifi ed

1. “Disputing the said adjustment, M/s.Religare Finvest Limited has fi led a suit against the Bank in May, 2018 before the Honourable High Court of Delhi and the same is being defended appropriately by the Bank. The matter still remains sub-judice. Based on two independent legal opinion that the Bank’s action is lawful and tenable, no liability is expected. The matters is sub judice”.

Impact is Quantifi ed

2. “Board directed Management to withdraw the mandate given to IBA to negotiate wages of its offi cers and workmen staff from 1st November 2017. Accordingly, Bank has written separate letters to IBA regarding withdrawal of mandate for Offi cers and for workmen staff. Since the mandate stands withdrawn, there is no liability on the Bank to pay any arrears of wages with effect from 1stNovember, 2017. Accordingly, Bank has reversed the entire provision of arrears of wages amounting to ` 48.70 crores.”

3. “Bank has already engaged services of merchant bankers and has received non-binding letter from Clix group for amalgamation with the bank which is under process. Simultaneously Bank will talk to other investors to raise capital. This will enable the Bank to grow the business and this along with other cost control measures undertaken by the Bank would generate suffi cient profi ts in order to absorb DTA.”

Secretarial Auditor:

Pursuant to the provisions of the Companies Act, 2013, the Bank has appointed Shri K Muthusamy, Practising Company Secretary, Coimbatore (CoP 3176) as the Secretarial Auditor of the Bank for the FY 2019-20. The Secretarial Audit Report dated 15th June 2020 is annexed to this report as Annexure H. There are no qualifi cations, reservation or adverse remark or disclaimer in the report.

48. LISTING AGREEMENT WITH STOCK EXCHANGES

The Equity Shares of the Bank are listed with the National Stock Exchange of India Limited, Mumbai and BSE Limited, Mumbai to enhance the liquidity of your equity shares.

49. ACKNOWLEDGMENTS

Your Directors would like to thank the shareholders and customers for their continued goodwill and support. The Board also gratefully acknowledges the guidance and co-operation received from the Reserve Bank of India and other regulatory and government authorities like SEBI, NSE, BSE, NSDL, CDSL and Department of Income Tax.

Your Directors would also like to express their sincere appreciation of the contribution made by the management and staff including the Employees’ Union and Offi cers’ Association for their support and look forward to a more evolved relationship, as steps are taken to re-orient the bank for the future.


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INDEPENDENT AUDITOR’S REPORT

To

The Members of The Lakshmi Vilas Bank Limited

Report on the Audit of the Financial Statements

Qualifi ed Opinion

We have audited the accompanying fi nancial statements of The Lakshmi Bank Limited (“the Bank”), which comprise the Balance Sheet as at 31st March 2020, the Profi t and Loss Account, the Cash Flow Statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory information. Incorporated in these fi nancial statements are the Returns for the year ended on that date of 21 Branches and departments audited by us and 562 Branches/ offi ces audited by statutory branch auditors. The Branches audited by us and those audited by other auditors have been selected by the Bank in accordance of the guidelines issued to the Bank by the Reserve Bank of India (“RBI”).

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualifi ed Opinion paragraph, the aforesaid fi nancial statements give the information required by the Banking Regulation Act,1949 as well as the Companies Act,2013 in the manner so required for banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Bank as at 31st March 2020, and its losses and its cash fl ows for the year ended on that date.

Basis for Qualifi ed Opinion

1. We draw attention to Note 8 of the Schedule 18 – Notes on Accounts. During the fi nancial year ended 31st March 2018, the Bank had adjusted loans aggregating to Rs.794 crore extended to RHC Holding Private Limited and Ranchem Private Limited against deposits of Religare Finvest Limited. The said adjustment has been contested by Religare Finvest Limited and a suit has been fi led against the Bank in May 2018 before the Honourable High Court of Delhi. The matter still remains sub-judice. Further, the Economic Offences Wing, Delhi (“EOW”) has initiated proceedings against the Directors of the Bank and SEBI has sought clarifi cation on the above matter. However, as per the Bank, based on legal opinions obtained against the suit, the said appropriation is lawful and tenable and hence not made any specifi c provision on this score. The Reserve Bank of India (“RBI”) vide letter dated 21st November 2019, had advised the Bank to maintain provisions, on a prudential basis, to cover potential losses for the ‘Claim against the Bank not acknowledged as debt’ in respect of the above-mentioned matter. In case of adverse judgment, the Management needs to provide an additional amount of Rs.594 crore after considering the available contingent provision of Rs.200 crore provided in the books. Considering the above, the Provisions & Contingencies would have increased, net loss for the year would have increased, shareholders’ funds would have decreased, by Rs.594 crore each and the Capital Adequacy Ratio (Basel III) would have reduced by 4.50%.

The audit opinion on the fi nancial statements for the years ended 31st March 2018 and 31st March 2019 was also qualifi ed in respect of this matter.

2. We draw attention to Note 5.1.1 of the Schedule 18 – Notes on Accounts, which states that the Bank has reversed the cumulative provision of Rs.48.70 crore held towards revision of wages due to employees with effect from November 2017. While the Bank has cited the withdrawal of mandate given to the Indian Banks’ Association (“IBA”) to negotiate revision of salary on its behalf, as the basis for reversing the provision, there is no evidence to suggest that there will not be any liability for the wage revision with effect from November 2017. While the quantum of wage revision cannot be determined as on date, it is likely that the provision required would at least be Rs.48.70 crore. Considering the above, Operating Expenses and the net loss for the year would have increased by Rs.24 crore each, Other income would have decreased by Rs.24.70 crore and Other liabilities & Provisions as at 31st March 2020 would have increased by Rs.48.70 crore.

3. We draw attention to Note 4.9 of the Schedule 18 – Notes on Accounts, which states that the Bank has recognised net deferred tax asset of Rs.1,185.57 crore as at 31st March 2020, of which Rs.326.01 crore was created during the year ended 31st March 2020. The Bank has decided not to opt for reduced corporate tax rate under Section 115BAA of the Income Tax Act and the deferred tax asset and liability have been calculated with the existing tax rate.

As per the requirements of AS 22 “Accounting for Taxes on Income”, deferred tax assets should be recognised and carried forward only to the extent that there is a virtual certainty that suffi cient future taxable income will be available against which such deferred tax assets can be realised. In our opinion, considering the recurring losses and in the present scenario of the Bank going through the Prompt Corrective Action imposed by the RBI, there is no certainty that the Bank will have suffi cient future taxable income to justify the creation of deferred tax asset. Had the deferred tax asset not been created and retained, the net loss for the year would have been higher by Rs.1,185.57 crore.


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We conducted our audit in accordance with the Standards on Auditing (“SAs”) specifi ed under Section 143(10) of the Companies Act,2013 (“the Act”). Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Results section of our report. We are independent of the Bank in accordance with the Code of Ethics, as amended, issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Financial Results, and we have fulfi lled our other ethical responsibilities in accordance with these requirements and the Code of Ethics, as amended. We believe that the audit evidence obtained by us is suffi cient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

The fi nancial results indicate that the Bank has incurred a loss of Rs.836.04 crore during the year ended 31st March 2020. The Bank has been incurring losses for the past 10 Quarters and the Reserve Bank of India has initiated Prompt Corrective Action in September 2019, which inter alia prescribes the Bank to bring in additional capital, restrict further lending to corporates, reduce NPAs and improve the Provision Coverage Ratio to 70%. There has been a steady decline in the Bank’s deposit base since September 2019 and increase in the NPA ratios. The Bank’s Tier 1 Capital ratio has turned negative, at -0.88%, as compared to the minimum requirement of 8.875%. This requires the Bank to take effective steps to augment its capital base in the year 2020-21. We were informed that the Bank routinely evaluates capital raising options.

In line with the RBI’s COVID-19 Regulatory Package dated 27th March 2020 and 17th April 2020, the Bank has granted a moratorium of three months on the payment of all instalments and/ or interest, as applicable, falling due between 1st March 2020 and 31st May 2020 to all eligible borrowers classifi ed as “Standard”, even if overdue, as at 29th February 2020.

In the opinion of the Bank, based on their internal assessment and the likely capital infusion, the Bank will be able to realise its assets and discharge its liabilities in its normal course of business and hence the Financial Results have been prepared on a going concern basis. The said assumption of going concern is dependent upon the Bank’s ability to achieve improvements in liquidity, asset quality and solvency ratios, augment its capital base and mitigate the impact of COVID-19 and thus a material uncertainty exists that may cast a signifi cant doubt on the Bank’s ability to continue as a going concern. However, as stated above, the Bank opines that there are mitigating factors to such uncertainties.

Our opinion on the fi nancial statements is not modifi ed in respect of this matter.

Emphasis of Matter

1. We draw attention to Note 9 of the Schedule 18 – Notes on Accounts, which describes that the Bank has recognised provision on loans and overdrafts that were overdue but “Standard” as at 29th February 2020, for which moratorium benefi t has been granted, based on the days past due status as on that date in accordance with the RBI’s COVID-19 Regulatory Package.

2. We draw attention to Note 9 of the Schedule 18 – Notes on Accounts, which describes the uncertainties due to the outbreak of COVID-19 and Management’s evaluation of its impact on the operations of the Bank. In view of these uncertainties, the impact on the Bank’s fi nancial results is signifi cantly dependent on future developments.

3. We draw attention to Note 5.1.1 of the Schedule 18 – Notes on Accounts, which describes about the reversal of excess provision for employee benefi ts amounting Rs.70.37 crore as per the actuarial valuation report as at 31st March 2020 in accordance with AS 15 “Employee benefi ts” and this reversal of excess provision is mainly on account of the change in the principal actuarial assumption of salary escalation rate.

Our opinion on the fi nancial statements is not modifi ed in respect of any of the above-mentioned matters of emphasis.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most signifi cance in our audit of the standalone fi nancial statements of the current period. These matters were addressed in the context of our audit of the standalone fi nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

S. No. Key Audit Matter Auditor’s Response to Key Audit Matter

1 Recognition of Deferred tax assets on carry forward of losses

Deferred tax assets on unabsorbed depreciation or carry forward of losses are to be recognized only when there is a virtual certainty supported by convincing evidence that suffi cient future taxable income will be available against which such

Principal Audit Procedures:

• Considered the taxable profi ts of the Bank and taxes paid in the past, obtained details of carry forward losses under income tax and details of estimates of taxable incomes for future periods without considering further capital infusion, of restructuring and without considering expected recoveries from assets where resolution proceedings are underway.


22


deferred tax assets can be realised. Determination of virtual certainty is a matter of judgement based on convincing evidence.

Refer Note 4.9 of the Schedule 18 – Notes on Accounts

• Tested the period over which the deferred tax assets on such unabsorbed losses would be recovered against future taxable income.

• Tested the Management`s underlying assumptions in estimating the future taxable incomes against which such unabsorbed losses would be recovered.

2 Adequacy of provisions in respect of Advances

Advances are classified as performing and non-performing assets in accordance with the prudential norms issued by RBI. The identifi cation of non-performing assets and creation of provision on such advances involves key judgments relating to performance of borrowers, determination of security value, manual interventions, management judgement, regulatory level, etc.

Accordingly, our audit was focused on income recognition, asset classification and provisioning pertaining to advances due to the materiality of the balances and associated impairment provisions.


We assessed the Bank’s system in place to identify and provide for non-performing assets.

Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:

• Evaluated the design of internal controls relating to identifi cation and making provision for non-performing assets.

• Tested the relevant information technology systems used in identifi cation and making provision for such NPA as per the RBI Guidelines including involvement of manual process and manual controls. in relation to income recognition, asset classification and provisioning pertaining to advances.

• Considered Branch audit reports for identifi cation and provisioning for non-performing assets

• Test checked the identifi cation and provisioning of non-performing assets in accordance with RBI Guidelines issued from time to time.

• Ensured exceptions noticed during our audit procedures are duly corrected.

3 Information technology (IT) systems (Flex Cube – Oracle based) used in financial reporting process

The Bank’s operational and financial processes are dependent on IT systems due to large volume of transactions that are processed daily.

Accordingly, our audit was focused on key IT systems and controls due to the pervasive impact on the financial statements.


We conducted an assessment and identified key IT applications, databases and operating systems that are relevant to our audit and have identified CBS and Treasury System primarily as relevant for financial reporting.

Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:

• Obtained an understanding of the Bank’s IT control environment, IT policies and key changes during the audit period.

• Reviewed the design, implementation and operating effectiveness of the Bank’s General IT controls over the key IT systems that are critical to financial reporting on test check basis as per the checklist provided by the ICAI in its latest Guidance Note on Bank Audit.

• Tested key automated and manual business cycle controls and logic for system generated reports relevant to the audit on test check basis.

4 Valuation of Investments

As per RBI guidelines, Investments are classifi ed into Held for Trading (“HFT”), Available for Sale (“AFS”) and Held to Maturity (“HTM”) categories at the time of purchase and HTM investments are at amortised cost and AFS and HFT are at Mark to Market.

Accordingly, our audit was focused on the key audit matter, due to the Management’s judgment in determining the value based on the policy of the Bank, impairment assessments and the impact on the fi nancial statements.


We conducted an assessment of the policies, controls, classifi cations and valuation of investments.

• Reviewed the appropriateness of the valuation, by test checking on the pricing, volatility, discount factors.

• Reviewed if the RBI policies are followed.

• Reviewed if the fi nancial statements disclosures refl ect the Bank’s exposure to investments in line with the RBI policies, and Accounting Standards.


23


5 Modifi ed audit procedures carried out in light of COVID-19 pandemic

Due to the outbreak of COVID-19 pandemic, nationwide lockdown has been imposed by the Central Government/ State Governments/ Local authorities, which had resulted in restrictions on movement of personnel. Hence, physical visit to the Branches and offi ces was not possible in most of the cases by us and the Branch auditors.

Accordingly, our audit procedures were carried out based on the necessary records, reports, documents and certifi cates were made available to us by the Bank through digital medium, e-mail and remote access to the Core Banking Solution application.

As we could not gather audit evidence physically or through meetings with the Bank’s offi cials, we have identifi ed the modifi ed audit procedure as a Key Audit Matter.


We modifi ed our audit procedures as outlined below:

• Verifi ed the necessary records, reports, documents and certifi cates (mostly the scanned images) electronically through e-mails and remote access to the Branch/ offi ce system and the Core Banking Solution application.

• Resolved audit observations through discussions, receipt of digital records, telephonic conversations, video conferencing and e-mails.

Other Matter

Audit of most of the Branches have been performed by us and the Branch auditors, relying on alternative audit procedures, such as through remote access, on account of restrictions on physical visit to the Branches due to the COVID-19 pandemic.

Our opinion on the fi nancial statements is not modifi ed in respect of this matter.

Information other than the Financial Statements and Auditor’s Report thereon

The Bank’s Board of Directors is responsible for the preparation of the other information. The other information comprises of the CSR initiatives, Directors’ Report including Annexures to Directors’ Report, Shareholders’ Information, Business Responsibility Report, Corporate Governance Report, Management Discussion and Analysis Report, List of Branches, Basel III Disclosures, Decade Progress included in the Bank’s Annual Report, but does not include the fi nancial statements and our auditor’s report thereon.

Our opinion on the fi nancial statements does not cover the other information and the Basel III disclosures, and accordingly, we do not express any form of assurance conclusion thereon.

In connection with our audit of the fi nancial statements, our responsibility is to read the other information, and, in doing so, consider whether the other information is materially inconsistent with the fi nancial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Financial Statements

The Bank's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act,2013 (“the Act”) with respect to the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards specifi ed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and provisions of Section 29 of the Banking Regulation Act,1949 and circulars and guidelines issued by the Reserve Bank of India (“RBI”) from time to time.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities ; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal fi nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the fi nancial statements, the Board of Directors is responsible for assessing the Bank’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Bank’s fi nancial reporting process.


24

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the fi nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted with SA’s will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to infl uence the economic decisions of users taken on the basis of these fi nancial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone fi nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is suffi cient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal fi nancial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Bank has adequate internal fi nancial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signifi cant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone fi nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone fi nancial statements, including the disclosures, and whether the standalone fi nancial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the fi nancial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the fi nancial statements may be infl uenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identifi ed misstatements in the fi nancial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signifi cant audit fi ndings, including any signifi cant defi ciencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most signifi cance in the audit of the standalone fi nancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefi ts of such communication.

Report on Other Legal and Regulatory Requirements

The Balance Sheet and the Profi t and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act,1949 and Section 133 of the Companies Act,2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

As required by sub-section (3) of Section 30 of the Banking Regulation Act,1949, we report that:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit except for the matter described in the Basis for Qualifi ed Opinion paragraph and have found them to be satisfactory;

(b) The transactions of the Bank, which have come to our notice, have been within the powers of the Bank;

(c) Since the key operations of the Bank are automated with key applications integrated to the Core Banking System, the audit is carried out centrally as all the necessary records and data required for the purpose of our audit are available therein. However,


25

during the course of our audit, we have visited 9 Branches and offi ces. The returns received from the offi ces and Branches of the Bank have been found adequate for the purposes of our audit. As mentioned in Other Matter paragraph, audit of most of the Branches have been performed by us and the Branch auditors, relying on alternative audit procedures, such as through remote access, on account of restrictions on physical visit to the Branches due to the COVID-19 pandemic.

Further, as required by Section 143(3) of the Act, we report that:

(i) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit except for the matter described in the Basis for Qualifi ed Opinion paragraph;

(ii) In our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from Branches not visited by us;

(iii) The reports on the accounts of the Branches audited by Branch auditors of the Bank under Section 143(8) of the Act have been sent to us and have been properly dealt with by us in preparing this report;

(iv) The Balance Sheet, the Profi t and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns received from the Branches not visited by us;

(v) Except for the possible effects of matter described in the Basis for Qualifi ed Opinion paragraph, in our opinion, the fi nancial statements comply with the Accounting Standards specifi ed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, to the extent they are not inconsistent with the accounting policies prescribed by RBI;

(vi) On the basis of written representations received from the Directors as on 31st March 2020 taken on record by the Board of Directors, none of the Directors is disqualifi ed as on 31st March 2020 from being appointed as a Director in terms of Section 164 (2) of the Act;

(vii) With respect to the adequacy of the internal fi nancial controls over fi nancial reporting of the Bank and the operating effectiveness of such controls, refer to our separate Report in "Annexure A"; and

(viii) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,2014, in our opinion and to the best of our information and according to the explanations given to us:

a. The Bank has disclosed the impact of pending litigations on its fi nancial position in its fi nancial statements - Refer Schedule 18 - Note No. 7 to the fi nancial statements;

b. The Bank does not have any long term contracts including derivative contracts - Refer Schedule 18 - Note No. 3.3 to the fi nancial statements;

c. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Bank;

d. With respect to the matter to be included in the Auditor’s Report in accordance with the requirements of Section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the Bank being a banking company, Section 197 of the Act, related to the managerial remuneration is not applicable by virtue of Section 35B(2A) of the Banking Regulation Act,1949.

For M/s. P.CHANDRASEKAR LLPChartered Accountants

(Firm Registration No. 000580S/S200066)

LAKSHMY CHANDRASEKARANPlace : Bangalore PartnerDate : 10th July, 2020 Membership No. 028508

UDIN: 20028508AAAAAU7760


26

Annexure A to the Independent Auditor’s Report of even date on the fi nancial statements of The Lakshmi Vilas Bank Limited

Report on the Internal Financial Controls with reference to fi nancial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013

We have audited the internal fi nancial controls with reference to fi nancial statements of The Lakshmi Vilas Bank Limited (‘the Bank’) as at 31st March 2020 in conjunction with our audit of the fi nancial statements of the Bank for the year ended on that date.

Management’s Responsibility for Internal Financial Controls with reference to fi nancial statements

The Bank’s Board of Directors is responsible for establishing and maintaining internal fi nancial controls based on the internal control over fi nancial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (“the Guidance Note”) issued by the Institute of Chartered Accountants of India (“the ICAI”).

These responsibilities include the design, implementation and maintenance of adequate internal fi nancial controls that were operating effectively for ensuring the orderly and effi cient conduct of its business, including adherence to Bank’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable fi nancial information, as required under the Companies Act,2013 (“the Act”).

Auditor’s Responsibility

Our responsibility is to express an opinion on the Bank’s internal fi nancial controls with reference to fi nancial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (“the Guidance Note”) issued by the ICAI and the Standards on Auditing (“the Standards”), prescribed under Section 143(10) of the Companies Act,2013 to the extent applicable to an audit of internal fi nancial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal fi nancial controls over fi nancial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal fi nancial controls with reference to fi nancial statements and their operating effectiveness. Our audit of internal fi nancial controls with reference to fi nancial statements included obtaining an understanding of internal fi nancial controls with reference to fi nancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion on the Bank’s internal fi nancial controls with reference to fi nancial statements.

Meaning of Internal Financial Controls with reference to fi nancial statements

A bank’s internal fi nancial control over fi nancial reporting is a process designed to provide reasonable assurance regarding the reliability of fi nancial reporting and the preparation of fi nancial statements for external purposes in accordance with generally accepted accounting principles. A bank’s internal fi nancial control over fi nancial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly refl ect the transactions and dispositions of the assets of the bank;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of fi nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditure of the bank are being made only in accordance with authorizations of management and directors of the bank; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the bank’s assets that could have a material effect on the fi nancial statements.

Inherent Limitations of Internal Financial Controls with reference to fi nancial statements

Because of the inherent limitations of internal fi nancial controls with reference to fi nancial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal fi nancial controls over fi nancial reporting to future periods are subject to the risk that the internal fi nancial control over fi nancial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


27

Opinion

In our opinion, the Bank has, in all material respects, adequate internal fi nancial controls with reference to fi nancial statements and such internal fi nancial controls with reference to fi nancial statements were operating effectively as at 31st March 2020, based on the internal controls criteria established by the Bank considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For M/s. P.CHANDRASEKAR LLPChartered Accountants

(Firm Registration No. 000580S/S200066)

LAKSHMY CHANDRASEKARANPlace : Bangalore PartnerDate : 10th July, 2020 Membership No. 028508

UDIN: 20028508AAAAAU7760


28

(` 000’s)

BALANCE SHEET as on 31st March 2020

Schedules 1 to 12 and 17 to 18 form part of this Balance Sheet.

As per our Report of even date attached

For M/s. P. CHANDRASEKAR LLPChartered Accountants(FRN - 000580S/S200066)

LAKSHMY CHANDRASEKARANPartnerMembership No. 028508

Chennai10th July, 2020

Y.N. LAKSHMINARAYANA MURTHYG. SUDHAKARA GUPTAH.S. UPENDRA KAMATHN. SAIPRASADGORINKA JAGANMOHAN RAORAGHURAJ GUJJARSAKTHI SINHASATISH KUMAR KALRAMEETA MAKHANK. R. PRADEEPRAJNISH KUMARSUNDARAM SHANKARDirectors

B.K. MANJUNATHChairman of the Meeting

S. SUNDARManaging Director & CEO

K. HARIHARANChief Financial Offi cer

N. RAMANATHANCompany Secretary

ScheduleAs at

31-03-2020As at

31-03-2019

I. CAPITAL & LIABILITIES

a. Capital 1 336 71 38 319 90 32

b. Reserves & Surplus 2 893 09 12 1572 67 31

c. Deposits 3 21443 19 41 29279 44 08

d. Borrowings 4 755 70 00 921 25 90

e. Other Liabilities & Provisions 5 992 81 60 952 88 68

TOTAL 24421 51 51 33046 16 29

II. ASSETS

a. Cash & Balances with Reserve Bank of India 6 1047 80 43 1654 07 21

b. Balances with Banks and Money at call & Short Notice 7 792 32 01 515 04 07

c. Investments 8 5383 82 95 8430 16 53

d. Advances 9 13827 89 04 20103 25 93

e. Fixed Assets 10 463 42 13 469 95 43

f. Other Assets 11 2906 24 95 1873 67 12

TOTAL 24421 51 51 33046 16 29

Contingent Liabilities 12 7532 83 55 10431 86 20

Bills for collection 968 18 44 976 92 25

Signifi cant Accounting Policies 17

Notes on Accounts 18


29

PROFIT AND LOSS ACCOUNT for the year ended 31st March 2020

Schedules 13 to 16 and 17 to 18 form part of this Profi t & Loss Account.

(` 000’s)






B.K. MANJUNATHChairman




ScheduleYear ended 31-03-2020

Year ended31-03-2019

I. INCOME

a. Interest Earned 13 2206 68 55 2839 89 39

b. Other Income 14 351 34 47 250 31 79

TOTAL 2558 03 02 3090 21 18

II. EXPENDITURE

a. Interest Expended 15 1778 96 29 2279 75 13

b. Operating Expenses 16 794 52 35 822 42 66

c. Provisions & Contingencies 820 58 84 882 13 10

TOTAL 3394 07 48 3984 30 89

III. NET PROFIT FOR THE YEAR -836 04 46 -894 09 71

Profi t brought forward -1565 28 82 -671 12 47

TOTAL -2401 33 28 -1565 22 18

IV. APPROPRIATIONS

a. Transfer to Statutory Reserve 0 0

b. Transfer to Capital Reserve 59 26 08 6 64

c. Transfer to Other Reserves 0 0

d. Investment Reserve 0 0

e. Transfer to Special Reserve u/s 36(1)(viii) of the IT Act, 1961 0 0

f. Dividend Paid 0 0

g. Tax on Dividend 0 0

h. Balance carried over to Balance Sheet -2460 59 36 -1565 28 82

TOTAL -2401 33 28 -1565 22 18

Earnings Per Share - Basic (`) -25.16 -34.66

Earnings Per Share - Diluted (`) -25.16 -34.59


30

CASH FLOW STATEMENT for the year ended 31st March 2020

(` in 000’s)

31-03-2020 31-03-2019

CASH FLOW FROM OPERATING ACTIVITIES:Net Profi t as per Profi t & Loss Account -836 04 47 -894 09 71ADJUSTMENTS FOR:

Provisions & Contingencies 820 58 84 882 13 10Depreciation on Fixed Assets 82 64 82 67 20 93Loss /(Profi t) on sale of assets 61 85 - 82 54Loss /(Profi t) on sale of NBA 1 81 0Income Tax / T D S paid 0 -10 00 00

Net cash fl ow before changes in Working Capital 67 82 86 44 41 78

CHANGES IN WORKING CAPITAL :LIABILITIES : Increase/Decrease in

Deposits -7836 24 67 -4030 04 21Refi nances -165 55 90 -3091 52 13Other Liabilities -697 64 09 -573 01 61

-8699 44 67 -7694 57 95ASSETS : Increase/Decrease in

Investments -2963 85 17 -2155 04 01Advances -6275 36 90 -5664 94 24Other Assets 1032 59 63 340 41 88

8206 62 43 7479 56 36Net Cash Flow used in operating activities -424 99 38 -170 59 80CASH FLOW FROM INVESTING ACTIVITIES :

Purchase of Fixed Assets -78 89 02 -118 70 63Sale of Fixed Assets 2 09 07 1 45 29

Net Cash Flow used in Investing activities -76 79 95 -117 25 34CASH FLOW FROM FINANCING ACTIVITIES:

Share issue including share premium net of forfeited shares 173 33 91 442 37 38Proceeds received from Tier II Bonds 0 0Repayment of Tier II Bonds 0 0Dividends paid - 53 43 - 37 32

Net Cash Flow from fi nancing activities 172 80 49 442 00 06Cash fl ow for the year -328 98 84 154 14 92Cash & Cash equivalents at the beginning of the year 2169 11 28 2014 96 36Cash & Cash equivalents at the year end (refer Schedule 6 & 7)

1840 12 44 2169 11 28











31

(` 000’s)

As at 31-03-2020

As at31-03-2019

SCHEDULE 1 - CAPITALAUTHORISED CAPITAL(65,00,00,000 equity shares of ` 10/- each) 650 00 00 500 00 00(Previous year 50,00,00,000 equity shares of `10/- each)ISSUED CAPITAL(33,87,32,277 equity shares of `10/- each).(Previous year 32,19,21,756 equity of `10/- each) of which 1,68,00,000 shares issued through Preferential and 10,521 shares issued under “LVB ESOS-2010”.

338 73 23 321 92 18

Subscribed, Called-up and Paid Up Capitali) 33,67,13,751 equity shares of `10/- each. 336 71 38 319 90 32

(Previous year 31,99,03,230 shares of ` 10/- each) (1,68,00,000 shares issued through Preferential and 10,521 shares issued under “LVB ESOS-2010”.)

ii) 1,26,42,131 Bonus Shares allotted (Previous year 1,26,42,131 shares)

iii) Shares kept in abeyance 20,18,526, inclusive of Forfeited & lapsed shares. (Previous year 20,18,526 shares)

iv) Shares Forfeited and lapsed 23,658 (Previous year 23,658 shares) 336 71 38 319 90 32

SCHEDULE 2 - RESERVES & SURPLUSI. STATUTORY RESERVE

Opening Balance 481 40 46 481 40 46Additions during the year 0 481 40 46 0 481 40 46

II. CAPITAL RESERVEOpening Balance 226 59 44 226 52 80Additions during the year 59 26 08 285 85 52 6 64 226 59 44

III. SHARE PREMIUMOpening Balance 1907 17 71 1529 75 61Additions during the year 171 47 14 396 58 18

2078 64 85 1926 33 79Deductions during the year 11 65 51 2066 99 34 19 16 08 1907 17 71

IV. REVENUE & OTHER RESERVESOpening Balance 271 48 05 269 20 31Additions during the year 2 69 98 2 27 74

274 18 03 271 48 05Deductions during the year 0 274 18 03 0 271 48 05

V. EMPLOYEE STOCK OPTION OUTSTANDINGOpening Balance 7 24 66 6 20 32Additions during the year 3 76 87 1 17 20

11 01 53 7 37 52Deductions during the year 7 05 64 12 86Less: Transferred to General Reserve 3 95 88 7 24 66

VI. SPECIAL RESERVE U/S 36(1)(viii) OF IT ACT, 1961Opening Balance 62 45 00 62 45 00Additions during the year 0 62 45 00 0 62 45 00

VII. REVALUATION RESERVEOpening Balance 181 60 81 167 25 42Additions during the year 0 16 63 13

181 60 81 183 88 55Depreciation on Revalued Asset 2 76 56 178 84 25 2 27 74 181 60 81

VIII. BALANCE IN PROFIT & LOSS ACCOUNT -2460 59 36 -1565 28 82893 09 12 1572 67 31


32

(` 000’s)

As at 31-03-2020

As at31-03-2019

SCHEDULE 3 - DEPOSITS

A. I. DEMAND DEPOSITS

1. From Banks 79 80 4 47 18

2. From Others 1383 17 25 1383 97 05 1962 50 14 1966 97 32

II. SAVINGS BANK DEPOSITS 4327 59 56 5552 25 79

III. TERM DEPOSITS

1. From Banks 1 95 00 108 54 22

2. From Others 15729 67 80 15731 62 80 21651 66 75 21760 20 97

21443 19 41 29279 44 08

B. (I) DEPOSITS OF BRANCHES IN INDIA 21443 19 41 29279 44 08

(II) DEPOSITS OF BRANCHES OUTSIDE INDIA NIL NIL

21443 19 41 29279 44 08

SCHEDULE 4 - BORROWINGS

I. BORROWINGS IN INDIA

1. Reserve Bank of India 87 00 00 0

2. Other Banks 0 52 66 40

3. Other Institutions & Agencies* 668 70 00 755 70 00 868 59 50 921 25 90

II. BORROWINGS OUTSIDE INDIA 0 0

* Includes unsecured Tier II bonds of ` 368.70 Cr (PY ` 368.70 Cr)

755 70 00 921 25 90

SECURED BORROWINGS INCLUDED IN I & II ABOVE 0 0

SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS

I. Bills payable 41 04 64 64 99 45

II. Inter-offi ce adjustments (net) 37 46 39 0

III. Interest accrued 161 94 68 229 18 76

IV. (i) Others - (including Provisions) 654 04 89 560 39 47

(ii) Contingent Provisions against Standard Assets 98 31 00 98 31 00

992 81 60 952 88 68

SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA

Cash in Hand (including foreign Currency Notes) 367 70 76 333 37 55

Balances with Reserve Bank of India

I) in current account 680 09 67 1320 69 66

II) in other accounts 0 0

1047 80 43 1654 07 21


33

(` 000’s)

As at 31-03-2020

As at31-03-2019

SCHEDULE 7 - BALANCES WITH BANKS & MONEY AT CALL AND SHORT NOTICE

I. IN INDIA

[i] Balance with Banks

a. in current accounts 11 95 80 45 48 30

b. in other deposit accounts 4 34 11 31 62

16 29 91 45 79 92

[ii] Money at call and short notice

a. with banks 0 0

b. with RBI in reverse repo 755 00 00 249 00 00

c. with other institutions 0 74 96 00

755 00 00 323 96 00

771 29 91 369 75 92

II. OUTSIDE INDIA

[i] Balance with Banks

a. in current accounts 12 47 09 145 28 15

b. in other accounts 8 55 01 0

21 02 10 145 28 15

792 32 01 515 04 07

SCHEDULE 8 - INVESTMENTS

I. INVESTMENTS IN INDIA

I. Government Securities [Including treasury bills, & zero coupon bonds] 4874 80 04 7449 05 05

II. Other approved securities 0 0

III. Shares 33 97 58 124 02 47

IV. Debentures & Bonds 273 70 47 579 13 83

V. Subsidiaries and Joint Ventures 0 0

VI. Others [including Commercial Paper, Mutual Funds, Security Receipt, Units, etc.]

201 34 86 277 95 18

5383 82 95 8430 16 53

GROSS INVESTMENTS IN INDIA 5749 30 76 8713 15 93

LESS: DEPRECIATION 365 47 81 282 99 40

NET INVESTMENTS IN INDIA 5383 82 95 8430 16 53

II. INVESTMENTS OUTSIDE INDIA NIL NIL

5383 82 95 8430 16 53


34

(` 000’s)

As at 31-03-2020

As at31-03-2019

SCHEDULE 9 - ADVANCES

A. I. Bills purchased & discounted 92 89 37 232 24 13

II. Cash credits, overdrafts & loans repayable on demand 7130 95 87 8963 50 53

III. Term loans 6604 03 80 10907 51 27

13827 89 04 20103 25 93

B. PARTICULARS OF ADVANCES

I. Secured by tangible assets [Including advances against Book Debts]

13694 38 74 19929 18 06

II. Covered by Bank / Government Guarantees 0 0

III. Unsecured 133 50 30 174 07 87

13827 89 04 20103 25 93

C. SECTORAL CLASSIFICATION OF ADVANCES

I. Priority Sector 6981 67 51 8203 96 85

II. Public Sector 0 0

III. Banks 0 0

IV. Others 6846 21 53 11899 29 08

13827 89 04 20103 25 93

SCHEDULE 10 - FIXED ASSETS

I. PREMISES

At cost 106 27 48 65 24 18

At Revaluation Value 192 12 25 175 49 12

Addition due to Revaluation Value 0 16 63 13

Additions during the year 91 14 41 10 65

299 30 87 298 47 08

Deductions during the year 7 00 7 35

299 23 87 298 39 73

Less: Depreciation to date 27 49 43 23 57 52

Add : Capital Work in Progress 1 82 40 273 56 84 0 274 82 21

II. OTHER FIXED ASSETS (INCLUDING FURNITURE & FIXTURES)

At Cost 572 62 39 500 80 89

Additions during the year 73 55 10 77 59 98

646 17 49 578 40 87

Deductions during the year 11 24 00 5 78 49

634 93 49 572 62 39

Less: Depreciation to date 447 68 58 377 49 17

Add : Capital Work in Progress 2 60 38 189 85 29 0 195 13 22

463 42 13 469 95 43


35

(` 000’s)

As at 31-03-2020

As at31-03-2019

SCHEDULE 11 - OTHER ASSETS

I. Inter-Offi ce Adjustments (net) 0 2 35 38

II. Interest Accrued 113 35 23 194 68 07

III. Tax Paid in Advance and Tax Deducted at Source (net) 376 96 83 375 09 17

IV. Deferred Tax Asset / Liabilities (net) 1185 56 00 859 55 00

V. Stationery & Stamps 2 62 41 2 66 90

VI. Non Banking Assets acquired in satisfaction of claims 137 95 49 139 37 88

VII. Others 1089 78 99 299 94 72

2906 24 95 1873 67 12

SCHEDULE 12 - CONTINGENT LIABILITIES

I. Claims against the Bank not acknowledged as debts 963 68 52 961 75 50

II. Liability for partly paid Investments 0 0

III. Liability on account of outstanding forward exchange contracts 5172 27 85 7538 61 61

IV. Guarantees given on behalf of constituents

In India 966 23 76 1178 53 29

Outside India 43 39 64 58 12 98

V. Acceptances, Endorsements & Other Obligations 322 86 06 637 24 76

VI. Other items for which the Bank is contingently liable 64 37 72 57 58 06

7532 83 55 10431 86 20

Year ended 31-03-2020


SCHEDULE 13 - INTEREST EARNED

I. Interest / discount on advances / bills 1657 70 46 2163 15 27

II. Income on Investments 510 38 82 666 34 80

III. Interest on balance with Reserve Bank of India & other inter-bank Funds 23 67 95 6 84 93

IV. Others 14 91 32 3 54 39

2206 68 55 2839 89 39


36

(` 000’s)



SCHEDULE 14 - OTHER INCOME

I. Commission, Exchange and Brokerage 80 27 60 115 62 27

II. Profi t / Loss on sale of Investments (net) 101 11 43 -18 60 47

III. Profi t / Loss on sale of Land, Buildings & Other Assets - 63 66 82 54

IV. Profi t / Loss on Exchange Transactions (net) 8 76 64 11 73 41

V. Income earned by way of Dividends from Companies in India. 1 19 67 1 87 13

VI. Miscellaneous Income 160 62 79 138 86 91

351 34 47 250 31 79

SCHEDULE 15 - INTEREST EXPENDED

I. Interest on Deposits 1701 33 78 2102 09 31

II. Interest on Reserve Bank of India / Inter-Bank Borrowings 77 62 51 177 65 82

1778 96 29 2279 75 13

SCHEDULE 16 - OPERATING EXPENSES

I. Payments to and Provision for Employees 336 37 36 401 66 07

II. Rent, Taxes & Lighting 84 10 51 87 92 21

III. Printing & Stationery 6 61 43 9 96 45

IV. Advertisement & Publicity 4 33 58 8 32 12

V. Depreciation on Bank's Property 82 64 82 67 20 93

VI. Director's fees, allowances 1 97 48 1 24 78

VII. Auditors' fees & Expenses (Including Branch Auditors) 1 87 71 1 80 30

VIII. Law Charges 8 71 15 5 58 18

IX. Postage, Telegrams, Telephones, etc. 19 17 68 19 51 20

X. Repairs & Maintenance 6 19 03 2 92 04

XI. Insurance 37 13 39 39 25 83

XII. Other Expenditure 205 38 21 177 02 55

794 52 35 822 42 66


37

SCHEDULE 17

SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF ACCOUNTING:

The fi nancial statements are prepared following the going concern concept, on historical cost basis unless otherwise stated and conform to the Generally Accepted Accounting Principles, (GAAP) in India which encompasses applicable statutory provisions, regulatory norms prescribed by the Reserve Bank of India (RBI) from time to time, Accounting Standards (AS) specifi ed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extent applicable and current practices prevailing in the banking industry in India.

B. USE OF ESTIMATES:

The preparation of the fi nancial statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities including contingent liabilities as of the date of the fi nancial statements and the reported income and expenses during the reported period. The Management believes that the estimates and assumptions used in the preparation of the fi nancial statements are prudent and reasonable. Actual results could differ from these estimates. The differences, if any between estimates and actual will be dealt appropriately in future periods.

C. PRINCIPAL ACCOUNTING POLICIES

1. TRANSACTIONS INVOLVING FOREIGN EXCHANGE:

(a) Foreign Currency Assets and Liabilities are evaluated at the exchange rates prevailing at the close of the year as per the guidelines issued by FEDAI. The resultant profi t or loss is accounted for.

(b) Income and Expenditure in foreign currency are translated at the exchange rates prevailing on the date of the respective transaction.

(c) Outstanding forward exchange contracts in each currency are revalued at the Balance Sheet date at the corresponding forward rates for the residual maturity of the contract, in accordance with the guidelines of FEDAI and the provisions of AS-11. The difference between revalued amount and the contracted amount is recognized as profi t or loss, as the case may be.

(d) Contingent liabilities on guarantees, letters of credit, acceptances and endorsements are reported at the rates prevailing on the Balance Sheet date.

2. INVESTMENTS:

(a) Investments are categorized under the heads ‘Held to Maturity’, Available for Sale, and ‘Held for Trading’ and are valued in accordance with the guidelines of the Reserve Bank of India

(b) Brokerage / commission etc, paid in connection with the acquisition of investments is charged to revenue and not included in cost.

(c) Broken period interest paid / received on debt instruments is treated as interest expense / income.

(d) Security receipts are valued at NAV as declared by Securitisation Companies

(e) The excess of acquisition cost over the face value of securities under “Held to Maturity” category is amortised over the remaining period to maturity.

(f) Costs including brokerage and commission pertaining to investments, paid at the time of acquisition, are charged to the profi t and loss account. Cost of investments is computed based on the Weighted Average Rate method.

(g) Profi t / loss on sale of investments in the 'Held to Maturity' category is recognized in the profi t and loss account and profi t is thereafter appropriated (net of applicable taxes and statutory reserve requirements) to capital reserve. Profi t / loss on sale of investments in 'Available for Sale' and 'Held for Trading' categories is recognised in the profi t and loss account.

(h) All Repo and Reverse Repo transactions are accounted for as borrowing and lending transactions respectively in accordance with the extant RBI guidelines.


38

3. ADVANCES:

3.1 In accordance with the prudential norms issued by RBI:

(a) Advances are classifi ed into standard, sub-standard, doubtful and loss assets borrower-wise;

(b) Provisions are made for loan losses, and

(c) General provision for standard advances is made.

3.2 Advances disclosed are net of provisions made for non-performing assets, ECGC claims settled, part recovery towards NPA accounts receipts held under sundries, and provision made for sacrifi ce of interest / diminution in the value of restructured advances measured in present value terms as per RBI guidelines.

4. FIXED ASSETS AND DEPRECIATION:

(a) Fixed assets are accounted for at their historical cost except for Land and Building which are accounted at their revalued cost.

(b) Software is capitalised along with computer hardware and included under Other Fixed Assets.

(c) Depreciation on assets other than computers are provided on Straight Line Method after considering the useful life specifi ed in Schedule II to the Companies Act, 2013 except for hand held communication devices(other than Tablets) which are depreciated in full considering the fast changing technology and obsolescence.

(d) Depreciation on computers and Software are provided for on straight-line method at the rate of 33.33% as per the guidelines issued by the Reserve Bank of India.

(e) Depreciation for premises, in which land cost and construction cost could not be ascertained separately, is provided on the total cost.

5. EMPLOYEE BENEFITS:

(a) Annual contributions to the approved Employees’ Gratuity Fund, Approved Pension Fund and Provision for Leave Encashment benefi ts are made on actuarial basis and net actuarial gain/loss are recognised as per Accounting Standard 15. Contribution made by the bank to Provident Fund and Contributory Pension Scheme are charged to Profi t & Loss account.

(b) The Bank follows the intrinsic value method to account for its employee compensation costs arising from grant of Employee Stock Options.

6. PROVISION FOR TAXATION:

Provision for taxation is made on the basis of the estimated tax liability, after due consideration of the judicial pronouncements and legal opinion, with adjustment for deferred tax in terms of the Accounting Standard 22 (Accounting for Taxes on Income).

7. REVENUE RECOGNITION:

(a) Income is accounted for on accrual basis.

(b) Interest income on non-performing advances/investments are recognized on realization basis, owing to the signifi cant uncertainty in collection thereof:

(c) Interest on tax refund from Income Tax Department is accounted based on assessment orders received.

(d) Dividend Income on Investments is accounted based on declaration basis.

8. SEGMENT REPORTING:

(a) The Bank recognises the Business Segment as the Primary Reporting Segment and Geographical Segment as the Secondary Reporting Segment, in accordance with the RBI guidelines and in compliance with the Accounting Standard 17.

(b) Business Segment is classifi ed into (a) Treasury (b) Corporate and Wholesale Banking, (c) Retail Banking and (d) Other Banking Operations.

(c) Geographical Segment consists only of the Domestic Segment since the Bank does not have any foreign branches.


39

9. EARNING PER SHARE:

Basic and Diluted earnings per equity share are reported in accordance with the Accounting Standard 20 “Earnings per share”. Basic earnings per equity share are computed by dividing net profi t by the weighted average number of equity shares outstanding for the year. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

10. IMPAIRMENT OF ASSETS

The Bank assesses at each balance sheet date whether there is any indication that an asset may be impaired. Impairment loss, if any, is provided in the Profi t and Loss Account to the extent the carrying amount of assets exceeds their estimated recoverable amount.

11. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

(a) As per the Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent Assets”, the Bank recognises provisions only when it has a present obligation as a result of a past event and it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

(b) Contingent Liability is recognised and disclosed only when a legal dispute is pending before a court of law/ forum/ Banking Ombudsman.

(c) Contingent Assets are not recognized in the fi nancial statements since this may result in the recognition of income that may never be realised.

12. NET PROFIT:

The net profi t as per the Profi t & Loss account is arrived at after necessary provisions towards: –

a) Taxation.

b) Advances and other assets.

c) Shortfall in the value of investments

d) Staff Retirement benefi ts.

e) Other usual and necessary provisions.

13. CASH AND CASH EQUIVALENTS:

Cash and cash equivalents include cash in hand, Balance with RBI, Balance with other Banks and money at Call and Short Notice.

Cash fl ows are reported using indirect method, whereby Profi t (Loss) before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or fi nancing cash fl ows. The cash fl ows from operating, investing and fi nancing activities of the bank are segregated.


40

SCHEDULE 18

NOTES ON ACCOUNTS

1. The reconciliation of inter branch transactions has been completed up to 31.03.2020 and tallying of balances is ensured on an ongoing basis.

2. CAPITAL RAISED THROUGH PREFERENTIAL ISSUE:

During the year 2019-20, the Bank has allotted 1,68,00,000 equity shares of face value of ` 10 each at a premium of ` 102 per share aggregating to ` 188.16 crore to M/s.Indiabulls Housing Finance Limited.

3. DISCLOSURE REQUIREMENTS

3.1 Capital (` in crore)

Items 2019-20 2018-19

i) Common Equity Tier 1 Capital Ratio (%) – (Basel III) -0.88 5.72

ii) Tier 1 Capital Ratio (%) -0.88 5.72

iii) Tier 2 Capital Ratio (%) 2.00 2.00

iv) Total Capital Ratio (CRAR) (%) 1.12 7.72

v) Percentage of the shareholding of the Government of India in public sector bank NIL NIL

vi) Amount of equity capital raised 188.28 460.49

vii) Amount of Additional Tier 1 capital raised, of whichPNCPS :PDI : NIL NIL

viii) Amount of Tier II Capital raised, of whichDebt capital instrumentsPreference Share Capital instruments NIL NIL

3.2. INVESTMENTS (` in crore)

Particulars 2019-20 2018-19

(1) Value of Investments

(i) Gross Value of Investments

(a) In India 5749.31 8713.16

(b) Outside India NIL NIL

(ii) Provisions for Depreciation

(a) In India 365.48 282.99


(iii) Net Value of Investments

(a) In India 5383.83 8430.17


(2) Movement of provisions held towards Depreciation on investments

(i) Opening balance 282.99 100.45

(ii) Add: Provisions made during the year 90.99 189.58

(iii) Less: Write-off / write-back of excess provisions during the year 8.50 7.04

(iv) Closing Balance 365.48 282.99

3.2.1 In respect of securities held under HTM category, premium paid of ` 21.88 crore (previous year ` 29.25 crore) has been amortized during the year and debited under “Interest received on Investments”.


41

3.2.2 Repo Transactions (in face value terms) (` in crore)

Particulars

Minimum outstanding

during the year

Maximum outstanding

during the year

Daily Average outstanding

during the year

Outstanding as on

March 312020

Securities sold under repo

I. Government securities

II. Corporate debt securities

0.00

(0.00)

NIL

(NIL)

1187.52

(2338.18)

NIL

(NIL)

209.08

(384.51)

NIL

(NIL)

82.10

(126.27)

NIL

(NIL)

Securities purchased under reverse repo

I. Government securities

II. Corporate debt securities

0.00

(0.00)

NIL

(NIL)

1411.34

(1351.87)

NIL

(NIL)

263.94

(93.81)

NIL

(NIL)

709.67

(267.91)

NIL

(NIL)

(Previous Year Figures are indicated in brackets)

3.2.3. Non-SLR Investment Portfolio

i) Issuer composition of Non SLR investments: (` in crore)

No. Issuer AmountExtent of Private

Placement

Extent of ‘Below

Investment Grade’

Securities

Extent of ‘Unrated’Securities

Extent of ‘Unlisted’Securities

(1) (2) (3) (4) (5) (6) (7)

1 PSUs 0.23 0.17 - - -

2 FIs - - - - -

3 Banks 8.96 - - - -

4 Private Corporates 547.39 476.39 373.71 58.45 96.20

5 Subsidiaries/ Joint Ventures - - - - -

6 Others 317.92 314.76 85.95 85.95 314.76

7 Less: Provision held towards depreciation (365.48) - - - -

Total 509.02 791.32 459.66 144.40 410.96

Amounts reported under Columns 4, 5, 6 and 7 above may not be mutually exclusive.


42

ii) Non-performing Non-SLR investments (` in crore)


Opening balance 178.19 52.58

Additions during the year 161.91 125.61

Reductions during the year 0.00 0.00

Closing balance 340.10 178.19

Total Provisions held (*) 194.84 135.78

(*) An amount of ` 0.95 crore received towards part settlement is parked under sundries account.

3.2.4 Sale and transfers to / from HTM category

During the year, the book value of securities sold under HTM category exceeds 5% of the book value of investments held in HTM category as at the beginning of the year. The details of HTM category as on 31.03.2020 are furnished hereunder:

(` in crore)

Market Value 3533.64

Book value 3439.70

Excess of book value over market value for which Provision is not made NIL

3.3 Derivatives

3.3.1 Forward Rate Agreement/ Interest Rate Swap (` in crore)


i) The notional principal of swap agreements 2044.19 1425.10

ii) Losses which would be incurred if counterparties failed to fulfi ll their obligations under the agreements

0.00 0.00

iii) Collateral required by the Bank upon entering into swaps 0.00 0.00

iv) Concentration of credit risk arising from the swaps 100% 100%

v) The fair value of the swap book (6.88) (1.36)

3.3.2 Exchange Traded Interest Rate Derivatives (` In crore)

SI. No.


(i)Notional principal amount of exchange traded interest rate derivatives undertaken during the year (instrument-wise) Nil Nil

(ii)Notional principal amount of exchange traded interest rate derivatives outstanding at the end of the year (instrument-wise) Nil Nil

(iii)Notional principal amount of exchange traded interest rate derivatives outstanding and not "highly effective" (instrument-wise) Nil Nil

(iv)Mark-to-market value of exchange traded interest rate derivatives outstanding and not "highly effective" (instrument-wise) Nil Nil

3.3.3 Disclosures on risk exposure in derivatives

Qualitative Disclosure:

The Board of Directors, the Risk Management Committee (RMC), the Asset Liability Management Committee (ALCO), and the Market Risk Management Department are entrusted with the management of risks in derivatives. Operations in the Treasury are segregated into three functional areas, namely Front offi ce, Mid-offi ce and Back-offi ce.


43

Treasury Policy approved by the Board of Directors defi nes the framework for carrying out derivatives business and lays down policies and processes to measure, monitor and report risk arising from derivative transactions. The policy provides for (a) appropriate risk limits for different derivative products and (b) authority levels for review of limit breaches and to take appropriate actions in such events.

The derivatives dealt by the bank are Forward Contracts in the foreign exchange market and Rupee OIS (Overnight Indexed Swap). Forward contracts are being used to hedge / cover the exposure in foreign exchange arising out of merchant transaction and trading positions. Rupee Derivatives are executed for hedging or for trading.

To cover the risk arising out of the above derivatives, various risk limits like PV01, VaR, NOOP, AGL, IGL, Stop loss, Deal size, Counter party limits have been prescribed in the Treasury Policy of the Bank. The same is monitored by Mid-Offi ce which is independent of Treasury Department and reporting to Chief Risk Offi cer. The Mid-offi ce monitors the derivatives operations against prescribed policies and limits on a daily basis and submits MIS and details of exceptions if any on a daily basis.

The Derivative transactions are conducted in the terms of the policy of the Bank as well as the extant guidelines issued by RBI from time to time.

Quantitative Disclosures (` in crore)

Sl. No.

ParticularCurrency Derivatives Interest rate derivatives

2019-20 2018-19 2019-20 2018-19

(i) Derivatives (Notional Principal Amount)

a) For hedging NA NA NA NA

b) For trading NA NA 2044.19 1425.10

(ii) Marked to Market Positions

a) Asset (+) NA NA 42.66 2150.92

b) Liability (-) NA NA 49.54 2287.08

(iii) Credit Exposure NA NA 63.10 35.76

(iv) Likely impact of one percentage change in interest rate (100* PV01)

a) On hedging derivatives NA NA NA NA

b) On trading derivatives NA NA 4.42 10.20

(v) Maximum and Minimum of 100*PV01 observed during the year

a) On hedging NA NA NA NA

b) On trading NA NA NA NA

Maximum NA NA 14.27 10.20

Minimum NA NA 0.06 NA

Banks may adopt the Current Exposure Method on Measurement of Credit Exposure of Derivative Products as per extant RBI instructions

3.3.4 Shifting of securities:

For the year ended 31.03.2020, Bank has shifted securities amounting to ` 300 crore (Face Value) (Previous year ` 628.66 crore Face Value) from HTM to AFS category and there was no loss on such transfer (Previous year – No loss). Further, Bank has shifted securities amounting to ` 279.13 crore (Face Value) (Previous year ` 872.08 crore Face Value) from AFS to HTM category and loss which arose on such transfer amounting to ` 8.50 crore has been provided during the year. (Previous year ` 7.04 crore)


44

3.3.5 SLR Securities (` In crore)

ParticularsAs at 31.03.2020 As at 31.03.2019

Book Value Market Value Book Value Market Value

Government Securities SLR (CG, SG,TB) 4874.80 4970.78 7,452.83 7,237.73

Approved securities – SLR 0.00 0.00 0.00 0.00

3.4 Asset Quality

3.4.1 Non-Performing Assets (` in crore)


(i) Net NPAs to Net Advances (%) 10.04% 7.49%

(ii) Movement of NPAs (Gross)

(a) Opening balance 3358.99 2694.21(b) Additions during the year 1553.24 1412.21(c) Reductions during the year 678.92 747.43(d) Closing balance 4233.31 3358.99

(iii) Movement of Net NPAs

(a) Opening balance 1506.29 1457.89(b) Additions during the year 1036.69 1037.93(c) Reductions during the year 1155.12 989.53(d) Closing balance 1387.86 1506.29

(iv) Movement of provisions for NPAs (excluding provisions on standard assets)

(a) Opening balance 1785.27 1169.05(b) Provisions made during the year 1136.38 995.63(c) Write-off/ write-back of excess provisions 153.32 379.41(d) Closing balance 2768.33 1785.27

3.4.2 Divergence in the asset classifi cation and provisioning:

In terms of the RBI Circular DBR.BP.BC.No. 32/21.04.018/2018-19 dated 1st April 2019, banks are required to disclose the divergences in asset classifi cation and provisioning consequent to RBI's annual supervisory process in their notes to accounts wherever either a) the additional provisioning requirements assessed by RBI exceeds 10% of the reported profi t before provisions and contingencies for the reference period or b) the additional Gross NPAs identifi ed by RBI exceed 15% of the published incremental Gross NPAs for the reference period, or both. Accordingly, divergence in Asset Classifi cation and Provisioning for NPAs in compliance to Risk Assessment Report (RAR) of RBI for the fi nancial year 2018-19 is reported hereunder.

(` in crore)

S. No. Particulars Amount

1. Gross NPAs as on March 31, 2019 as reported by the bank 3358.99

2. Gross NPAs as on March 31, 2019 as reported by RBI 3415.98

3. Divergence in Gross NPAs (2-1) 56.99

4. Net NPAs as on March 31, 2019 as reported by the bank 1506.29

5. Net NPAs as on March 31, 2019 as reported by RBI 1451.37

6. Divergence in Net NPAs (5-4) -54.92

7. Provisions for NPAs as on March 31, 2019 as reported by the bank 1785.27

8. Provisions for NPAs as on March 31, 2019 as reported by RBI 1897.17

9. Divergence in Provisioning (8-7) 111.90

10. Reported Net Profi t after Tax (PAT) for the year ended March 31, 2019 -894.10

11. Adjusted (notional) Net Profi t after Tax (PAT) for the year ended March 31, 2019 after taking into account the divergence in provisioning

-1006.00

(Resultant impact of the RBI divergence has been duly considered and given effect to as of 31.03.2020).


45

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46

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Standard

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Doubtful

Loss

Total

Standard

Sub-Standard

Doubtful

Loss

Total

Standard

Sub-Standard

Doubtful

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Total

Standard

Sub-Standard

Dou btful

Loss

Total

5D

owng

rada

tions

of

rest

ruct

ured

acc

ount

s du

ring

the

FY

No.

of

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0.86

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4.48

3.69

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5.86

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n M

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14

20

10

31

08

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16

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.

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Incl

udes

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7 a

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hich

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3.4.

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.)


47

3.4.4 Details of fi nancial assets sold to Securitization / Reconstruction Company for Asset Reconstruction

(A) Details of Sales: (` in crore)


i. No. of accounts NIL 5

ii. Aggregate value (net of provisions) of accounts sold to SC/RC NIL 148.16

iii. Aggregate consideration NIL 89.29

iv. Additional consideration realized in respect of accounts transferred in earlier years NIL 0.00

v. Aggregate profi t/ (loss) over net book value NIL -58.87

(B) NPA Assets Sold to ARC: (` in crore)

Particulars

Backed by NPAs sold by the bank as

underlying

Backed by NPAs sold by other banks / fi nancial institutions / non-banking fi nancial

companies as underlying

Total

2019-20 2018-19 2019-20 2018-19 2019-20 2018-19

Book value of investments in security Receipts as at 31st March

313.01 329.54 1.75 2.46 314.76 332.00

C. Disclosures of investment in Security Receipts: (` in crore)

ParticularsSRs Issued within

past 5 years

SRs issued more than 5 years ago but within past 8 years

SRs issued more than 8 years ago

(i) Book value of SRs backed by NPAs sold by the Bank as underlying

120.50 120.48 72.03

Provision held against (i) 0.00 46.29 72.03

(ii) Book value of SRs backed by NPAs sold by other banks/fi nancial institutions/non-banking fi nancial companies as underlying

0.00 0.00 1.75

Provision held against (ii) 0.00 0.00 1.75

Total (i) + (ii) 120.50 120.48 73.78

3.4.5 Details of non-performing fi nancial assets purchased/sold (from/to other Banks)

A. Details of non-performing fi nancial assets purchased: (` in crore)


1 (a) No. of accounts purchased during the year NIL NIL

(b) Aggregate outstanding NIL NIL

2 (a) Of these, number of accounts restructured during the year NIL NIL

(b) Aggregate outstanding NIL NIL


48

B. Details of non-performing fi nancial assets sold: (` in crore)


1. No. of accounts sold NIL NIL

2. Aggregate outstanding NIL NIL

3. Aggregate consideration received NIL NIL

3.4.6 Provisions on Standard Assets (` in crore)


Provisions towards Standard Assets 98.31 98.31

3.5 Business Ratios


(i) Interest Income as a percentage to Working Funds 6.89 7.41

(ii) Non-interest income as a percentage to Working Funds 1.10 0.65

(iii) Operating Profi t as a percentage to Working Funds -0.05 -0.03

(iv) Return on Assets (%) -2.61 -2.32

(v) Business (Deposits plus advances) per employee (` in crore) 8.42 10.42

(vi) Profi t per employee (` in crore) -0.18 -0.18

3.6 Asset Liability Management

Maturity pattern of certain items of assets and liabilities (` in crore)

Items 1Day2 to 7 days

8 to 14Days

15 to28

Days

29 daysto 3

months

Over 3months &

up to 6months

Over 6 months& up to1 year

Over 1year &up to

3 years

Over 3years &up to 5years

Over 5 years

Total

Deposits 61.68(348.60)

354.14(696.17)

403.63(903.19)

296.22(418.15)

1123.47(1896.63)

1671.20(1595.31)

2088.74(3604.61)

9177.00(12004.99)

823.27(904.11)

5443.82(6907.68)

21443.19(29279.44)

Advances (Net) 78.00(128.27)

357.08(726.95)

387.60(847.50)

486.38(1081.31)

1068.47(3777.34)

1311.25(347.37)

2723.34(1109.69)

4671.76(8430.58)

1041.53(1280.89)

1702.43(2373.36)

13827.89(20103.26)

Investments (Net) 81.83(84.06)

133.56(183.83)

0.00(0.00)

15.00(0.00)

531.44(39.24)

400.54(32.41)

33.98(905.07)

422.10(340.24)

657.33(295.05)

3108.02(6550.28)

5383.82(8430.17)

Borrowings 0.00(0.00)

0.00(252.56)

0.00(0.00)

0.00(0.00)

0.00(0.00)

0.00(0.00)

300.00(0.00)

137.50(350.50)

178.10(78.10)

140.10(240.10)

755.70(921.26)

Foreign Currency assets

44.03(152.68)

0.32(0.58)

0.44(3.04)

1.37(1.80)

9.99(9.71)

11.19(21.49)

0.00(0.00)

8.55(0.00)

0.00(0.00)

0.00(0.00)

75.89(189.30)

Foreign Currency liabilities

3.77(1.03)

0.24(6.32)

0.00(7.83)

0.26(2.06)

6.51(5.45)

20.18(5.45)

14.42(25.28)

18.95(40.66)

8.56(17.88)

0.00(35.99)

72.89 (147.94)

(Previous Year Figures are indicated in brackets)

The above data have been compiled by the management on the basis of the guidelines of RBI which have been relied upon by Auditors


49

3.7 Exposures

3.7.1 Exposure to Real Estate Sector (` in crore)

Category 2019-20 2018-19

a) Direct exposure

(i) Residential Mortgages – 1443.21 1760.76

Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented;

(ii) Commercial Real Estate –

Lending secured by mortgages on commercial real estates (offi ce buildings, retail space, multi-purpose commercial premises, multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction, etc.). Exposure would also include non-fund based (NFB) limits;

1216.03 1512.99

(iii) Investments in Mortgage Backed Securities (MBS) and other securitised exposures –

a. Residential, 0.00 0.00

b. Commercial Real Estate. 0.00 0.00

b) Indirect Exposure

Fund based and non-fund based exposures on National Housing Bank (NHB) and Housing Finance Companies (HFCs).

116.17 126.27

Total Exposure to Real Estate Sector 2775.41 3400.02

3.7.2 Exposure to Capital Market (` in crore)


(i) Direct investment in equity shares, convertible bonds, convertible debentures and units of equity-oriented mutual funds the corpus of which is not exclusively invested in corporate debt;

49.01 201.61

(ii) Advances against shares / bonds / debentures or other securities or on clean basis to individuals for investment in shares (including IPOs / ESOPs), convertible bonds,convertible debentures, and units of equity-oriented mutual funds;

NIL NIL

(iii) Advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security;

5.12 5.58

(iv) Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e. where the primary security other than shares/convertible bonds/convertible debentures/units of equity oriented mutual funds does not fully cover theadvances;

7.55 11.68

(v) Secured and unsecured advances to stockbrokers and guarantees issued on behalf of stockbrokers and market makers;

NIL 150.00

(vi) Loans sanctioned to corporates against the security of shares / bonds/debentures or other securities or on clean basis for meeting promoter’s contribution to the equity ofnew companies in anticipation of raising resources;

NIL NIL

(vii) Bridge loans to companies against expected equity fl ows / issues; NIL NIL

(viii) Underwriting commitments taken up by the banks in respect of primary issue of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds;

NIL NIL

(ix) Financing to stockbrokers for margin trading; NIL NIL

(x) All exposures to Venture Capital Funds (both registered and unregistered) NIL NIL

Total Exposure to Capital Market 61.68 368.87


50

3.7.3 Risk Category wise Country Exposure (` in crore)

Risk CategoryExposure (net) as at31-3-2020

Provision held as at

31-3-2020

Exposure (net) as at31-3-2019

Provision held as at

31-3-2019

Insignifi cant 30.00 NIL 206.92 NIL

Low 15.76 NIL 24.61 NIL

Moderate 0.00 NIL 2.83 NIL

High 0.00 NIL 0.20 NIL

Very High 0.23 NIL 0.00 NIL

Restricted 0.00 NIL 0.00 NIL

Off-credit 0.00 NIL 0.00 NIL

Total 45.99 NIL 234.56 NIL

As the bank’s exposure for the year in respect of risk category wise country exposure (Foreign exchange transactions) is less than 1% of total assets of the bank, no provision is considered necessary.

3.7.4 Details of Single Borrower Limit (SBL)/ Group Borrower Limit (GBL) exceeded by the bank.

A. SBL exceeded by the Bank for the period 01/04/2019 to 31/03/2020 NIL (PY NIL)

B. GBL exceeded by the Bank for the period 01/04/2019 to 31/03/2020 NIL (PY NIL)

3.7.5 Unsecured Advances (Amount of Advances for which, intangible securities have been taken) (` in crore)

ParticularsAs on

31-03-2020As on

31-03-2019

The total amount of Advances for which intangible Securities such as charge over the rights, licenses, Authority, etc. have been taken.

NIL NIL

Estimated value of such intangible collaterals NIL NIL

3.8 Miscellaneous

3.8.1 Disclosure of Penalties imposed by RBI:

A penalty of ` 1.00 Cr has been imposed on account of non-compliance with IRAC norms for the year ended March 31, 2017 and a penalty of ` 83,250 has been imposed on account of defi ciency like mutilated currencies observed in cash remittances made by currency chest to RBI.

4. Disclosure in terms of Accounting Standards

4.1 Accounting Standard 5 - Net Profi t or Loss for the period, prior period items and changes in Accounting Policies:

There are no material prior period income and expenditure included in the Profi t & Loss account, which requires a disclosure as per Accounting Standard 5.

There has been no change in the Accounting policies followed by the bank during the year ended 31.03.2020 as compared to those in the preceding fi nancial year ended 31.03.2019.

4.2 Accounting Standard 9 - Revenue Recognition:

Bank is following accrual method of accounting and hence no disclosure is warranted under Accounting Standard 9.


51

4.3 Disclosure in terms of Accounting Standard 10 – Fixed Assets (Revaluation of Premises)

In accordance with Banks stated policy, revaluation of the premises in its fi xed assets portfolio was carried out during the years 2010-11, 2015-16 &2018-19 by the Bank using the services of Banks approved empanelled Independent valuers. Appreciation arising out of such revaluation was accounted with corresponding credit to Revaluation Reserves. The details are as under

(` In crore)

Original Cost of Premises 107.11

Incremental Value on account of revaluation made in 2011 - ` 81.51Incremental Value on account of revaluation made in 2016- ` 93.98Incremental Value on account of revaluation made in 2019- ` 16.63

192.12

Depreciation on Original Cost - `14.28Depreciation on Revalued Cost - ` 13.21

27.49

Written Down Value of such revalued assets 271.74

Capital Work in Progress 1.82

Written down Value (Including Capital WIP) 273.56

4.4 Accounting Standard 15 – Employee Benefi ts

4.4.1 The Bank is following Accounting Standard 15 (Revised 2005) “Employee Benefi ts” as under:

In respect of contributory plans viz. – Provident Fund and Contributory Pension Scheme, the bank pays fi xed contribution at pre-determined rates to a separate entity, which invests in permitted securities. The obligation of the Bank is limited to such fi xed contribution.

In respect of Defi ned Benefi t Plans, viz. Gratuity and Pension as well as for Leave encashment, provision has been made based on actuarial valuation as per the guidelines.

The summarized position of Post-employment benefi ts and long term employee benefi ts recognized in the Profi t and Loss account and Balance Sheet as required in accordance with the Accounting Standard -15 (Revised) are as under:

I. Principal Actuarial Assumptions at the Balance Sheet Date (Expressed as weighted Averages)

ParticularsGratuity (Funded)

Pension (Funded)

Leave Encashment (Unfunded)

Discount Rate 6.96% 6.96% 6.96%

Salary Escalation Rate 1.50% 1.50% 1.50%

Attrition Rate 4.00% 4.00% 4.00%

Expected Rate of return on Plan Assets 9.00% 9.00% -

II. Change in the Present value of obligations (` in crore)


Pension (Funded)


Present Value of obligations as at the beginning of the year 90.70 345.50 67.04

Interest Cost 5.99 21.90 4.53

Current Service Cost 3.22 67.40 5.63

Past service cost (non-vested benefi ts) 0 0 0

Past service cost (vested benefi ts) 0 0 0

Benefi ts Paid 9.19 61.55 3.84

Actuarial (loss)/gain on obligation (balancing fi gure) -14.17 -67.90 -17.33

Present Value of obligations as at the year end 76.55 305.34 56.03


52

III. Change in Fair Value of Plan Asset (` in crore)

ParticularsGratuity

(Funded)Pension (Funded)


Fair value of Plan Assets at the beginning of the year 91.63 324.49 -

Expected return on Plan Assets 8.24 29.20 -

Employer's Contribution 8.30 50.24 -

Benefi ts Paid 9.19 61.56 -

Actuarial (loss)/gain on plan assets (balancing fi gure) -6.78 -14.08 -

Fair Value of Plan Asset at the end of the year 92.20 328.29 -

IV. Actual Return on Plan Assets (` in crore)

ParticularsGratuity



Expected return on plan assets 8.24 29.20 -

Actuarial gain/(loss) on plan assets -6.78 -14.08 -

Actual return on plan assets 1.46 15.12 -

V. Actuarial Gain / (Loss) recognized (` in crore)

ParticularsGratuity



Actuarial gain/(loss) for the Period - Obligation -14.17 -67.90 -17.33

Actuarial gain/(loss) for the Period - Plan Assets -6.78 -14.08 -

Total gain/(loss) for the period -20.95 -81.97 -17.33

Actuarial gain/(loss) recognized in the period -7.39 -53.81 -17.33

Unrecognized actuarial gain/(loss) at the end of the year 0.00 0.00 0.00

VI Amount recognized in Balance Sheet (` in crore)

ParticularsGratuity



Present value of the Obligation 76.55 305.34 56.03

Fair value of plan assets 92.20 328.29 0.00

Difference -15.65 -22.95 56.03

Unrecognized Transitional liability 0.00 0.00 0.00

Unrecognized past service cost (non vested benefi ts) 0.00 0.00 0.00

Liability recognized in the Balance Sheet -15.64 -22.95 56.03


53

VII Expenses Recognized in Profi t & Loss Account (` in crore)

ParticularsGratuity



Current Service Cost 3.22 67.40 5.63

Interest Cost 5.99 21.90 4.53

Expected return on Plan assets 8.24 29.20 0.00

Net actuarial gain/(loss)recognised in the year -7.39 -53.81 -17.33

Transitional Liability recognized in the year 0.00 0.00 0.00

Past service cost (non-vested benefi ts) 0.00 0.00 0.00

Past service cost (vested benefi ts) 0.00 0.00 0.00

Expenses Recognized in Profi t & Loss Account -6.42 6.29 -7.16

VIII Movements in the Liability Recognized in the Balance Sheet (` in crore)

ParticularsGratuity



Opening net Liability * -0.93 21.01 0.00

Opening amount determined under para 55 of AS15R

Expense as Above -6.42 6.29 -7.16

Contribution paid 8.30 50.24 -

Closing Net Liability * -15.64 -22.95 -7.16

* Net liability = Obligation - Funded /provisions.

(` in crore)

ParticularsGratuity



Opening balance 90.70 345.49 67.04

Closing balance 76.55 305.34 56.03

IX Amount for the Current Period (` in crore)


Pension (Funded)


Present value of Obligation 76.55 305.34 56.03

Plan Assets 92.20 328.29 -

Surplus/(Defi cit) 15.64 22.95 56.03


54

X Major categories of Plan Assets (As % of Total Plan Assets)


Pension (Funded)

Government of India Securities 59.02 28.61

High Quality Corporate Bonds / FDs 28.19 19.15

Short Term Debt Instruments 0.35 0.22

Equity Share of listed companies 0.00 0.00

Property 0.00 0.00

Special Deposit Scheme 1.08 0.00

Equity Mutual Fund 3.14 1.26

Balance with Bank Account 5.84 1.44

Balance held at LIC India’s Running account 0.00 34.11

Annuity under Return of Purchase Price 0.00 21.64

Amount Receivable from Bank 0.00 -7.73

Others (Interest Receivables) 2.14 1.30

Suspense 0.24 0.00

Total 100.00 100.00

4.5 Employee Stock Option Scheme

As on 31st March, 2019, the options in force were 18,63,878. During the year, Bank had allotted 10,521 options pursuant to exercise by employees and 9,49,167 options were cancelled/lapsed. As on 31st March 2020, the number of options in force are 9,04,190.The Bank has reversed a sum of ` 3.24 crore towards proportionate compensation expenses for the year ended 31st March 2020 (PY- ` 1.39 crore).

4.6. Accounting Standard 17 – Segment Reporting (` in crore)

SEGMENT REPORTING - MARCH 2020

PART A: BUSINESS SEGMENTS YEAR ENDED

PARTICULARS 31-03-2020 31-03-2019

1. SEGMENT REVENUE :

a. Treasury operations 645.30 668.19

b. Corporate/Wholesale banking operations 570.37 705.42

c. Retail banking operations 1330.85 1700.14

d. Other banking operations 11.51 16.46

TOTAL 2558.03 3090.21

2. SEGMENT RESULTS (Operating Profi t)


b. Corporate/Wholesale Banking operations -54.22 -26.09

c. Retail banking operations -126.51 -6.70

d. Other banking operations 3.57 8.24

TOTAL -15.46 -11.97


55

SEGMENT REPORTING - MARCH 2020

PART A: BUSINESS SEGMENTS YEAR ENDED

PARTICULARS 31-03-2020 31-03-2019

OPERATING PROFIT -15.46 -11.97

PROVISIONS OTHER THAN TAX 1146.60 1276.56

PROFIT BEFORE TAX -1162.05 -1288.53

Less : Tax expenses -326.01 -394.43

NET PROFIT -836.04 -894.10

3. CAPITAL EMPLOYED :


b. Corporate/Wholesale banking operations 187.96 46.39

c. Retail banking operations 561.74 150.93

d. Unallocated Assets 163.98 1490.24

TOTAL 1229.80 1892.58

PART B – GEOGRAPHICAL SEGMENTS: Since the Bank is having domestic operations only no reporting is made under international segment.

In reporting of segment Assets, Liabilities, Revenue, Results, certain estimates and assumptions have been considered by the Management, which have been relied upon by the Statutory Central Auditors.

4.7. Accounting Standard 18 – Related Party Disclosures

Pursuant to Regulation 23(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)

S. No. Name Designation

1Mr.Parthasarathi Mukherjee * (Till 31.08.2019)

Managing Director

2Mr. S. Sundar(CFO Till 31.12.2019 & MD From 01.01.2020)

Managing Director

3 Mr. N. Ramanathan Company Secretary

(Contd.)


56

(` in crore)

Items/ Related Party

Parent (as per

ownership or control)

SubsidiariesAssociates /

Joint Ventures

Key Management

Personnel

Relatives of key

Management Personnel

Total

March 31, 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019

Borrowings NIL NIL NIL NIL

Deposits NIL NIL NIL NIL

Placement of Deposits NIL NIL NIL NIL

Advances NIL NIL NIL NIL

Investments NIL NIL NIL NIL

Non-Funded Commitments NIL NIL NIL NIL

Leasing/HP arrangements provided

NIL NIL NIL NIL

Leasing / HP arrangements availed

NIL NIL NIL NIL

Purchase of Fixed Assets NIL NIL NIL NIL

Sale of Fixed Assets NIL NIL NIL NIL

Interest Paid NIL NIL NIL NIL

Interest Received NIL NIL NIL NIL

Rendering of Services NIL NIL NIL NIL

Receiving of Services NIL 1.03* 0.81 NIL 1.03* 0.81

Management Contracts NIL NIL NIL NIL

* Salary for MD for the period from Apr-19 to Aug-19 has been waived.

4.8. Accounting Standard 20 – Earnings per Share (EPS)

EPS calculation in accordance with the AS-20 issued by the ICAI is as under:


Net profi t after Tax (` In crore) -836.04 -894.10

Weighted Average Number of Equity shares 332,303,485 257,971,140

Weighted Average Number of Diluted Equity shares 332,303,485 258,504,067

Earnings per share – Basic (`) -25.16 -34.66

Earnings per share – Diluted (`) -25.16 -34.59


57

4.9. Accounting Standard 22 – Accounting for Taxes on Income

The Bank has recognized net Deferred Tax Assets as on 31st March, 2020 aggregating to ̀ 1185.57 crore (PY ̀ 859.56 crore) on timing differences pertaining to surplus provision for doubtful advances, Provision for Standard Advances, Leave Encashment, Special Reserve, brought forward loses etc. in accordance with Accounting Standard – 22 on “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India. The major components of DTA / DTL are furnished as under:

(` in crore)

Particulars Deferred Tax Assets Deferred Tax Liabilities

Deferred Tax Components 2019-20 2018-19 2019-20 2018-19

Provision for leave encashment 19.57 23.43 0.00 0.00

Depreciation on fi xed assets 0.00 0.00 5.35 10.64

DTA on loss/ provision for advances 1096.55 779.81 0.00 0.00

Provision for wage arrears 0.00 8.63 0.00 0.00

Provision for other assets 96.62 80.15 0.00 0.00

Special Reserve u/s 36(i)(viii) 0.00 0.00 21.82 21.82

CLOSING BALANCE 1212.74 892.02 27.17 32.46

Net DTA 1185.57 859.56

4.10. Intangible Assets - Accounting Standard 26

The Bank has followed AS 26 “Intangible asset” and the guidelines issued by the RBI in this regard.

4.11. Accounting Standard 28 – Impairment of Assets

A substantial portion of the bank’s assets comprises fi nancial assets to which Accounting Standard 28 is not applicable. In the opinion of the Bank management, there is no impairment of other assets as at 31st March 2020 requiring recognition in terms of the said Standard.

4.12 Details of movement in provisions in accordance with Accounting Standard 29: (` in crore)

ParticularsOpening Provision

made during the year

Provisions reversed/ adjusted

Closing

as on 01.04.2019

as on 31.03.2020

Provision for Standard Assets 98.31 0.00 0.00 98.31

Provision for Bad and Doubtful debts 1785.27 1002.73 19.67 2768.33

Provision for Income Tax 404.84 0.00 0.00 404.84

Provision for depreciation in market value of Investments

282.99 90.99 8.50 365.48

Provision for Other assets 228.54 50.00 1.40 277.14

Counter cyclical buffer 14.71 0.00 0.00 14.71

Provision for Interest Tax 0.10 0.00 0.00 0.10

Provision for Fringe Benefi t Tax 1.90 0.00 0.00 1.90

Provision for Dividend (Including Dividend Tax) 0.00 0.00 0.00 0.00

Provision for Restructured Advances & FITL 29.82 8.53 13.53 24.81

Provision for Foreign Currency Unhedged 0.82 0.15 0.22 0.76

COVID- 19 – Moratorium A/c’s Provision 0.00 10.01 0.00 10.01


58

5. Additional Disclosures

5.1 Provisions and Contingencies: Break up of ‘Provisions & Contingencies’ shown under the head Expenditure in Profi t & Loss Account

(` in crore)


Provision towards Standard Assets 0.00 0.00

Provision towards NPA 1002.08 878.57

Provision for COVID-Moratorium Accounts 10.01 0.00

Provision for depreciation in market value of Investments 90.99 189.58

Provision for Restructured Advances (Economic sacrifi ce) & FITL -5.02 -10.44

Provision for Foreign Currency Unhedged -0.06 -1.21

Provision for Other Assets 48.60 220.06

Sub Total 1146.60 1276.56

Provision for Income Tax (Net of deferred tax) -326.01 -394.43

Total 820.59 882.13

5.1.1. Reversal of Provisions:

The Bank has withdrawn the mandate given to Indian Banks Association (IBA) to negotiate revision of salary on its behalf for both its offi cer staff and clerical staff. Consequently no obligation is cast on the Bank to pay revised wages wef 01.11.2017 and hence the entire provision of ` 48.70 crores (including ` 24 crores for the Current year) created for wage arrears has been reversed as this no longer payable.

Provision for terminal benefi ts (Pension, Gratuity and Leave encashment) held in excess of the provision required as at 31st March 2020 as per the actuarial valuation report, has been reversed. Such excess provision reversed during the year amounted to ` 70.37 cores which includes ` 45.20 crores pertaining to 2019-20.

5.2 Movement of Counter Cyclical Provisioning Buffer (` in crore)


(a) Opening balance in the account 14.71 14.71

(b) Provision made in the accounting year 0.00 0.00

(c) Amount of drawdown made during the accounting year 0.00 0.00

(d) Closing balance in the account 14.71 14.71

5.3 Draw Down from Reserves:

The Preferential Issue expenditure of ` 11.65 crore incurred during the year appropriated on approval from the share premium account.

5.4 Disclosure of complaints

A. Customer Complaints:

(a) No. of complaints pending at the beginning of the year 1

(b) No. of complaints received during the year 715

(c) No. of complaints redressed during the year 690

(d) No. of complaints pending at the end of the year 26


59

ATM complaints through Dispute Management Systems (DMS) - NPCI

(a) No. of complaints pending at the beginning of the year 59

(b) No. of complaints received during the year 3624

(c) No. of complaints redressed during the year 3675

(d) No. of complaints pending at the end of the year 8

B. Awards passed by the Banking Ombudsman

(a) No. of unimplemented Awards at the beginning of the year 0

(b) No. of Awards Passed by the Banking Ombudsmen during the year 0

(c) No. of Awards implemented during the year 0

(d) No. of unimplemented Awards at the end of the year 0

5.5 Disclosure of Letters of Comfort (LOCs) issued by Banks (` in crore)

Particulars Amount

Letters of comfort issued in earlier years and outstanding as on 01-04-2019 6.33

Add; Letters of Comfort issued during FY 2019-20 0.00

Less: Letters of Comfort expired during FY 2019-20 0.00

Letters of Comfort Outstanding as on 31-03-2020 6.33

5.6 Provisioning Coverage ratio

The provision coverage ratio of the Bank as on 31.03.2020 is 71.25%.(62.08% as on 31.03.2019)

5.7 Bancassurance Business:

Fees, remuneration received from Bancassurance business:

For the year ended 31.03.2020, the Bank received Gross Commission income of ` 12.10 crore from Bancassurance business, of which ` 9.40 crore was from life insurance segment, ` 1.41 crore was from general insurance segment and ` 1.29 Cr from health insurance segment.

5.8. Concentration of Deposits, Advances, Exposures and NPAs

5.8.1 Concentration of Deposits (` in crore)

Total Deposits of twenty largest depositors 1579.89

Percentage of Deposits of twenty largest depositors to Total Deposits of the bank 7.37%

5.8.2 Concentration of Advances (` in crore)

Total Advances to twenty largest borrowers 2584.77

Percentage of Advances to twenty largest borrowers to Total Advances of the bank 14.36%

5.8.3 Concentration of Exposures (` in crore)

Total Exposure to twenty largest borrowers/customers 2605.12

Percentage of Exposures to twenty largest borrowers/customers to Total Exposure of the bank on borrowers/customers

13.80%


60

5.8.4 Concentration of NPAs (` in crore)

Total Exposure to top four NPA accounts 547.09

5.9 Sector-wise Advances (` in Crore)

Sl. No

Sector

2019-20 2018-19

Outstanding Total

AdvancesGross NPA

% of Gross NPAs

to Total Advances in that Sector

Outstanding Total

AdvancesGross NPA

% of Gross NPAs

to Total Advances in that Sector

(A) Priority Sector

1.Agriculture and allied activities

3075.03 153.49 4.99% 3226.04 135.67 4.21%

2. Industries 1098.84 198.06 18.02% 1376.76 135.08 9.81%

3. Services 2089.97 346.78 16.60% 2912.05 284.48 9.77%

4. Personal Loans 717.84 16.38 2.28% 689.12 16.24 2.36%

Sub Total (A) 6981.68 714.72 10.23 8203.97 571.47 6.97%

(B) Non Priority Sector

1.Agriculture and allied activities

368.08 368.03 94.98% 392.69 56.41 14.37%

2. Industries 2628.13 1243.18 47.30% 3031.18 1193.50 39.37%

3. Services 2924.41 878.43 30.03% 3966.16 612.43 15.44%

4. Personal Loans 2549.60 132.96 5.21% 4706.96 68.18 1.45%

5. Others 1221.39 895.96 73.35% 1655.00 857.00 51.78%

Sub Total (B) 9691.67 3518.58 36.30% 13751.99 2787.52 20.27%

Total (A+B) 16673.34 4233.31 25.39% 21955.96 3358.99 15.30%

5.9.1 Priority Sector Lending Certifi cates (PSLCs)

The Banks are required to disclose the amount of PSLCs sold/purchased (category-wise) as per RBI/2015-16/366 FIDD.CO.Plan.BC.23/ 04.09.01/2015-16 dated: April 7, 2016 and is furnished as under:

(` in crore )

SI. No. Category of PSLCOutstanding

as on 31-03-2020

Outstanding as on

31-03-2019

1 PSLC-Agriculture 100.00 NIL

2 PSLC-SF/MF 1050.00 NIL

3 PSLC-Micro Enterprises 650.00 NIL

4 PSLC-General 200.00 NIL

Total PSLC 2000.00 NIL


61

5.10 Movement of NPAs (` in crore )


Gross NPAs as on 1st April (Opening Balance) 3358.99 2694.21

Additions (Fresh NPAs) during the year 1553.24 1412.21

Sub-total (A) 4912.23 4106.42

Less:-

(i) Upgradations 265.15 194.19

(ii) Recoveries (excluding recoveries made from upgraded accounts) 394.77 292.60

(iii) Technical / Prudential write offs 0.00 85.98

(iv) Write-offs other than those under (iii) above 19.00 174.66

Sub-total (B) 678.92 747.43

Gross NPAs as on 31st March (closing balance) (A-B) 4233.31 3358.99

5.10.1 Details of Technical write–offs and recoveries made: (` in Crore)


Opening balance of Technical / Prudential written off accounts as at 1st April 613.25 550.71

Add: Technical / Prudential write offs during the year 0.00 85.98

Sub Total (A) 613.25 636.69

Less: Recoveries/ Reduction made from previously technical / prudential written – off accounts during the year (B)

19.20 23.44

Closing balance as on 31st March (A-B) 594.04 613.25

5.11 Overseas Assets, NPAs and Revenue

Particulars (` in crore)

Total Assets NIL

Total NPAs NIL

Total Revenue NIL

5.12 Off-balance Sheet SPVs sponsored

Name of the SPV sponsored

Domestic Overseas

NIL NIL


62

5.13 Resolution Plan implemented for Stressed Asset

The Banks are required to disclose resolution plan implemented for stressed assets as per the RBI Circular RBI/2017-18/131, DBR No.BP.BC.1010/21.04.048/2017-18 dated 12th February 2018 and is furnished as under:-

(` in crore)

Particulars No of cases Amount

Resolution Plan implemented @ NIL NIL

Of which, Restructure approved cases NIL NIL

Of which, number of Cases with aggregate exposure of lenders is ` 1 Billion and above where Independent Credit evaluation (ICE) of the Residual debt is required by Credit Rating Agencies (CRA)

NIL NIL

Of which, Number of cases with exposure ̀ 5 Billion and above where 2 such Independent Credit evaluation (ICE) is required by CRA

NIL NIL

@ The details furnished above excludes the borrower entities in respect of which specifi c instructions have already been issued by Reserve Bank of India to the banks for reference under IBC

5.13.1 Acquisition of Non-SLR securities due to conversion of debt during Restructuring process

As per RBI Circular RBI/2017-18/131, DBR No.BP.BC.1010/21.04.048/2017-18 dated 12th February 2018, disclosure is made as under:-

Bank has acquired and held shares/debentures for an amount of ` 116.16 crore by way of conversion of debt to equity during various restructuring process implemented by the Bank. This amount is not considered for the calculation of regulatory ceilings/restrictions on Capital Market Exposures, Investment in Para Banking activities and intra-Group exposure. However, there is no implication on compliance of the provisions of Section 19(2) of the Banking Regulation Act, 1949.

5.13.2 Revised framework for resolution of stressed assets

The Reserve Bank of India vide its circular dated February 12, 2018 issued a revised framework for resolution of stressed assets, which superseded the existing guidelines on SDR, S4A etc., with immediate effect. Accordingly, the Bank has revoked the stand-still benefi ts for accounts where any of these schemes had been invoked but not yet implemented and classifi ed them as per the extant RBI Guidelines on Income Recognition and Asset Classifi cation.

5.13.3 Disclosures on Flexible Structuring of Existing Loans (` in crore)

Period

No. of borrowers taken

up for fl exible structuring

Amount of loans taken up for fl exible structuring

Exposure weighted average duration of loans taken up for

fl exible structuring

Classifi ed as Standard

Classifi ed as NPA

Before applying fl exible

structuring

After applying fl exible

structuring

2019-20 NIL NIL NIL NIL NIL

2018-19 NIL NIL NIL NIL NIL

5.13.4 Disclosures on Strategic Debt Restructuring Scheme (` in crore)

Period

No. of accounts

where SDR has been invoked

Amount outstanding as on the reporting date

Amount outstanding as on the reporting date with respect to accounts where

conversion of debt to equity is pending

Amount outstanding as on the reporting date with respect to accounts where

conversion of debt to equity has taken place


Classifi ed as NPA


Classifi ed as NPA


Classifi ed as NPA

2019-20 5 NIL 254.78 NIL NIL NIL 254.78

2018-19 5 NIL 269.55 NIL NIL NIL 269.55


63

5.13.5 Disclosures on Change in Ownership outside SDR Scheme (` In crore)

No. of accounts where Banks have decided to effectchange in ownership


31.03.2020


with respect to accounts where conversion of debt to equity / invocation of

pledge of equity shares is pending


with respect to accounts where conversion of debt

to equity / nvocation of pledge of equity shares

has taken place

Amount outstanding as on the reporting date with respect

to accounts where change in ownership is envisaged by issuance

of fresh shares or sale of promoters equity


Classifi ed as NPA


Classifi ed as NPA


Classifi ed as NPA


Classifi ed as NPA

Nil

5.13.6 Disclosures on Change in Ownership of Projects Under Implementation

No. of project loan accounts where Banks have decided to effect change

in ownership


Classifi ed as StandardClassifi ed as Standard

RestructuredClassifi ed as NPA

NIL

5.13.7 Disclosures on the scheme for Sustainable Structuring of Stressed assets (S4A) (` in crore)

PeriodNo. of accounts where S4A

has been appliedAggregate amount

outstanding

Amount outstandingProvision Held

Part A Part B

2019-20Classifi ed as Standard NIL NIL NIL NIL

Classifi ed as NPA 25.66 14.00 11.66 14.00

2018-19Classifi ed as Standard NIL NIL NIL NIL

Classifi ed as NPA 25.66 14.00 11.66 12.01

5.13.8 Micro, Small and Medium Enterprises (MSME) Sector – Restructuring of Advances

The disclosure required to be made as per RBI Circular RBI/2018-19 /100 .DBR. No. BP. BC. 18/ 21.04.048/2018-19 dated 01st January 2020, is as under:-

No. of Accounts Restructured Amount (` Crore)

1 1.20


64

5.14 Disclosure on Remuneration

a. Qualitative disclosures

(a) Information relating to the composition and mandate of the Remuneration Committee.

The composition of the Nomination Remuneration and Compensation Committee of the Board as on 31st March 2020 is 4 directors. The Committee is constituted as per regulatory requirements

(b) Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy.

The compensation policy was approved by the Nomination Remuneration and Compensation Committee of the Board on 25th March 2019.

Performance is evaluated based on Key Performance Indicators as approved by the Board.

(c) Description of the ways in which current and future risks are taken into account in the remuneration processes. It should include the nature and type of the key measures used to take account of these risks.

(d) Description of the ways in which the Bank seeks to link performance during a performance measurement period with level of remuneration.

(e) A discussion of the Bank’s policy on deferral and vesting of variable remuneration and a discussion of the Bank’s policy and criteria for adjusting deferred remuneration before vesting and after vesting

(f) Description of the different forms of variable remuneration (i.e. cash, shares, ESOPs and other forms) that the bank utilizes and the rationale for using these different forms.

ESOS and Performance Incentives are the components of variable remuneration.

b. Quantitative disclosures


(g) Number of meetings held by the Remuneration Committee during the fi nancial year and remuneration paid to its members

Meeting of the Nomination, R e m u n e r a t i o n a n d Compensation Committee of the Board (NRCCB) was held 11 times during FY 2019-20 and the total remuneration paid to the committee members in the form of sitting fees is ` 0.14 crore.

Meeting of the Nomination, R e m u n e r a t i o n a n d Compensation Committee of the Board (NRCCB) was held 5 times during FY 2018-19 and the total remuneration paid to the committee members in the form of sitting fees is ` 0.07 crore.

(h) (i) Number of employees having received a variable remuneration award during the fi nancial year.

NIL NIL

(ii) Number and total amount sign-on awards made during the fi nancial year.

NIL NIL

(iii) a. Details of guaranteed bonus, if any, paid as joining / Sign on bonus.

NIL NIL

b. Details of performance Bonus / Allowance NIL NIL

(iv) Details of severance pay, in addition to accrued benefi ts, if any.

NIL NIL

(i) (i) Total amount of outstanding deferred remuneration, split into cash, shares and shares linked instruments and other forms.

NIL NIL

(ii) Total amount of deferred remuneration paid out in the fi nancial year.

NIL NIL


65


(j) Breakdown of amount of remuneration awards for the fi nancial year to show fi xed and variable, deferred and non-deferred.

No risks takers were paid variable pay. No deferred a n d n o n - d e f e r r e d remuneration.

No r isks takers were paid var iable pay. No deferred and non-deferred remuneration.

(k) (i) Total amount of outstanding deferred remuneration and retained remuneration exposed to ex-post explicit and/or implicit adjustments.

NIL NIL

(ii) Total amount of reductions during the fi nancial year due to ex-post explicit adjustments.

NIL NIL

(iii) Total amount of reductions during the fi nancial year due to ex-post implicit adjustments.

NIL NIL

5.15 Disclosures relating to securitization: NA

5.16 Credit Default Swaps: NIL

5.17 Intra – Group Exposure: (` in crore)

Particulars 2019-20

(a) Total amount of intra-group exposures

NIL(b) Total amount of top-20 intra-group exposures

(c) Percentage of intra-group exposures to total exposure of the bank on borrowers / customers

(d) Details of breach of limits on intra-group exposures and regulatory action thereon, if any.

5.18 Transfer to Depositors Education and Awareness Fund (DEAF) (` In crore)


Opening balance of amounts transferred to DEAF 57.58 42.62

Add: Amounts Transferred to DEAF during the year 7.42 15.97

Less: Amounts reimbursed by DEAF towards claims 0.63 1.01

Closing balance of amounts transferred to DEAF 64.37 57.58

5.19 Unhedged Foreign Currency Exposure

Based on the declaration received from borrowers, the bank has estimated and provided towards the liability for Unhedged Foreign Currency Exposure (UFCE) of their constituents in terms of RBI Circular No. BDOD.No.BP.BC.85/21.06.200/2013-14 dated 15th January 2014 and the total provision held as of 31st March 2020 is ` 0.76 crore.

5.20 Details of Frauds occurred and Provision made during the year

As per RBI Circular No.DBR. No. BP.BC.92/21.04.048/2015-16 dated April 18, 2016 required details are furnished:

(a) Number of Fraud cases reported during the year 37

(b) Amount involved (` in crore) 324.61

(c) Quantum of Provision made, net of recoveries (` in crore) 318.41

(d) Quantum of unamortized Provision debited from ‘Other Reserves’ (` in crore) 0.00


66

6.1 Liquidity Coverage Ratio (` In crore)

2019-20 2018-19

Total Unweighted

Value (Average)

Total Weighted

Value (Average)

Total Unweighted

Value (Average)

Total Weighted Value

(Average)

High Quality Liquid Assets

1. Total High Quality Liquid Assets (HQLA) – Average

6967.55 6399.76

Cash Outfl ows

2 Retail deposits and deposits from small business customers, of which

18712.70 1666.87 17882.23 1620.61

(i) Stable Deposits 4088.05 204.40 3352.33 167.62

(ii) Less stable Deposits 14624.63 1462.46 14529.90 1452.99

3 Unsecured wholesale funding, of which: 5079.16 1235.52 5139.48 1685.22

(i) Operational deposits (all counterparties) 0 0 0 0

(ii) Non-operational deposits (all counterparties)

5079.17 1235.51 5139.48 1685.22

(iii) Unsecured debt 0 0 0 0

4 Secured Wholesale funding 209.33 0 1189.89 19.52

5. Additional requirements, of which 6162.16 537.98 15947.00 1140.87

(i) Outfl ows related to derivative exposures and other collateral requirements

89.06 89.06 16.63 16.63

(ii) Outfl ows related to loss of funding on debt products

0 0 0 0

(iii) Credit and Liquidity facilities 0.40 0.30 16.42 5.92

6 Other contractual funding obligations 188.31 188.31 383.72 383.72

7 Other contingent funding obligations 5884.37 260.30 15530.22 734.60

8 Total Cash Outfl ows 30163.37 3440.37 40158.59 4466.22

Cash Infl ows

9 Secured lending (e.g. reverse repos) 260.70 0.00 99.03 0

10 Infl ows from fully performing exposures 683.94 341.80 1102.71 551.35

11 Other cash infl ows 223.66 185.86 53.48 53.48

12 Total Cash Infl ows 1168.30 527.66 1255.21 604.83

Total Adjusted Value


TOTAL HQLA (Average) 6967.55 6399.76

Total Net Cash Outfl ows 2912.70 3860.10

Liquidity Coverage Ratio (%) 239.21 165.79

6.1.1. Disclosure under IBC

As per RBI Circular No. DBR.No.BO.15199/21.04.048/2016-17 dated June 23, 2017, for the accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), the Bank is holding total provision of ` 295.92 crore (` 184.28 crore as at March 31, 2019).


67

6.1.2 Implementation of IND AS

As advised by RBI, the Bank has submitted proforma IndAS fi nancials for the period ending 30th June 2019,30th September 2019 and 31st December 2019 in prescribed format.

In terms of RBI notifi cation DBR.BP.BC.No.29/21.07.001/2018-19 dated 22nd March 2019 has deferred implementation of IndAS until further notice from RBI

6.2 Qualitative disclosure around LCR

Based on RBI guidelines issued during June, 2014 and also other circulars subsequently thereon, the Bank has been computing the Liquidity Coverage Ratio with effective from 01st January, 2015. As per these guidelines, the Bank has high quality liquid assets (HQLA) into Level 1 and Level 2A/2B. As on 31.03.2020, the Bank has ` 5837.23 Cr of HQLAs, of which, the main contribution is from Level – 1 type of assets with ` 5828.43 Cr. The Level – 1 asset are in the form of surplus SLR investments / Excess CRR and Cash in Hand.

As on 31.03.2020, after applying the respective haircuts as mentioned by RBI guidelines on LCR, the Bank has total amount of ` 2473.14 Cr of cash outfl ows and ` 336.57 Cr of cash infl ows over the next 30 days period. Of this total amount of ` 2473.14 Cr of cash outfl ows, the major component is in the form of Retail deposits and Unsecure Wholesale Funding and of the total ` 336.57 Cr of cash infl ows, the major cash infl ows are in the form of amounts to be received from Retail and small business counterparties and Non – Financial wholesale counterparties.

7. The disputed income tax demand outstanding as on 31.03.2020 amounts to ` 330.22 crore (PY: ` 336.66 crore) and service tax liability of ` 170.63 crore (PY: ` 11.24 Crore). No provision is considered necessary in respect of the disputed liabilities in view of the favourable decisions by various appellate authorities on similar issues.

Provision for Income Tax in the current year is made as per Income Computation Disclosures Standards (ICDS) after considering various judicial decisions on certain disputed issues.

8. During the fi nancial year 2017-18, the Bank had adjusted deposit loans aggregating to ` 794 crore, extended to M/s.RHC Holding Private Limited and M/s.Ranchem Private Limited, group companies of M/s Religare Finvest Limited against its deposits. Disputing the said adjustment, M/s.Religare Finvest Limited has fi led a suit against the Bank in May, 2018 before the Honourable High Court of Delhi and the same is being defended appropriately by the Bank. The matter still remains sub-judice. The Reserve Bank of India advised that the Bank may on a prudential basis maintain provision to cover potential losses for the "claims against the Bank not acknowledged as debt". As per legal opinions received by the Bank, the adjustment of deposits against loans is lawful and tenable. Hence, the Bank management's decision on recognition and measurement of provisions on this score depends on the verdict of the court in the said suit. The Bank holds a contingent provision of ` 200 crore on this score. Further to the above, Bank has submitted replies to the clarifi cations sought by SEBI. EOW, Delhi has registered FIR against Directors of Board LVB, RHC Holding and Directors on the Board of RHC Holding and the investigation is in progress. The Bank has sent a detailed letter to EOW explaining its stand on the issue and assured to extend full co-operation in the investigation.

9. The SARS-CoV-2 virus responsible for COVID-19 continues to spread across the globe and India, which has contributed to a signifi cant decline and volatility in Global and Indian fi nancial markets and local economic activities. On March 11, 2020, the COVID-19 outbreak was declared a global pandemic by the World Health Organization. Numerous governments and companies, including the Bank have introduced a variety of measure to contain the spread of the virus. The Government of India had announced a series of lock-down measures beginning 24th March 2020 with extension thereof up to 31st May 2020 and further to 31st July 2020, in order to limit the spread of the pandemic across India. The extent to which the COVID-19 pandemic will impact the Bank's results will depend on future developments, which are highly uncertain, including, among other things, any new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether government mandated or elected by the Bank. In accordance with the RBI guidelines vide circular DOR.No.BP.BC.47/21.04.048/2019-20 dated March 27, 2020 and DOR.No.BP.BC.63/21.04.048/2019-20 dated April 17, 2020 on the ‘COVID-19 Regulatory Package.

Board has approved a policy for implementation of the said guidelines by the Bank, including, inter-alia granting of moratorium on the payment of installments and / or interest falling due between March 01, 2020 and May 31, 2020 upto June 30, 2020 (and subsequently extended to August 31, 2020 vide RBI circular DOR.No.BP.BC.72/21.04.048/2019-20 dated May 23, 2020) as well as relaxation of certain parameters, to eligible borrowers. For all such accounts where the moratorium is granted, the asset classifi cation shall remain standstill during the moratorium period (i.e. the number of day’s past-due shall exclude the moratorium period for the purposes of asset classifi cation under the Income Recognition, Asset Classifi cation and Provisioning norms).


68

Bank is required to make additional provision @ 10%, over two quarters beginning with quarter ended March 31, 2020, in respect of such borrowers whose accounts, though classifi ed as standard as on Feb 29,2020. Would have become non-performing but for these benefi ts/relaxations.

Accordingly, Bank has made the provision amounting to ` 10.01 crore for the loan outstanding amount of ̀ 200.17 crore during the quarter ended 31st March 2020.

In terms of RBI circular DOR.NO.BP.BC.63/21.04.048/2019-20 dated 17th April, 2020 “COVID 19 Regulatory package – Asset Classifi cation and Provisioning” the disclosure are as follows:

(` In crore)

SL. No Particulars Amount

I Respective amounts in SMA/overdue categories, where the moratorium/deferment was extended in terms of paragraph 2 and 3.

1104.80

II Respective amount where assets classifi cation benefi ts is extended. 200.16

III Provisions made during the Q4FY2020 and Q1FY2021 in term of paragraph 5: 10.01

IV Provisions adjusted during the respective accounting periods against slippage and the residual provisions in terms of paragraph 6.

Not Applicable FY 2019-20

10. Previous year’s fi gures have been regrouped / reclassifi ed wherever considered necessary to conform to the current year’s classifi cation.











69

DISCLOSURE UNDER PILLAR III OF BASEL III NORMS AS ON 31.03.2020 I. SCOPE OF APPLICATION AND CAPITAL ADEQUACY

Table DF - 1

Scope of Application

Lakshmi Vilas Bank is a private sector bank incorporated in the year 1926 at Karur. The bank doesn’t have any subsidiaries under its Management. Hence the CRAR is computed on standalone basis only.

Qualitative Disclosures:

List of group entities considered for consolidation.

List of group entities not considered for consolidation both under the accounting and regulatory scope of consolidation.

No Group affi liation

Quantitative Disclosures:

List of group entities considered for consolidation

Not applicable

The aggregate amount of capital defi ciencies in all subsidiaries which are not included in the regulatory scope of consolidation i.e. that are deducted:

Not applicable

The aggregate amounts (e.g. current book value) of the bank’s total interests in insurance entities, which are risk-weighted:

Not applicable

Any restrictions or impediments on transfer of funds or regulatory capital within the banking group:

Not applicable

Table DF - 2

Capital Adequacy

Qualitative Disclosures:

A summary discussion of the bank’s approach for assessing the adequacy of its capital to support current and future activities.

As per Basel III guidelines, the Bank is required to maintain a minimum Capital to Risk Weighted Assets Ratio (CRAR) of 10.875%. The given minimum capital requirement includes capital conservative buffer of 1.875%. The total capital to Risk Weighted Assets Ratio (CRAR) as per Basel III guidelines works to 1.12% as on 31.03.2020 (As against the minimum regulatory requirement of 10.875%). The tier I CRAR stood at -0.88%.

Quantitative Disclosures:

Particulars Number of Equity Shares Face Value Per share Amount in lakhs

Authorized Capital 650000000 10 65000.00

Issued Capital 338732277 10 33873.23

Subscribed Capital 336713751 10 33671.38

Called up/paid up Capital 336713751 10 33671.38

The Bank’s shares are listed on the National Stock Exchange Limited (NSE) and Bombay Stock Exchange Limited (BSE).

Break up of capital funds: (` in lakhs)

A. Tier I Capital Elements

1. Paid up capital 33671.38

2. Reserves and surplus 78747.48

3. Gross Tier I Capital 112418.86

4. Less (Intangible Assets) including DTA adjustments 124050.80

5. Net Tier I Capital -11,631.94


70

B. Tier II Capital Elements

1. General Provisions and Loan loss Reserve 9846.79

2. Subordinated Debt (Lower Tier II bonds) 26922.00

3. Provision for restructured advances 7.06

4. Provision for unhedged foreign currency exposure 75.63

5. Total Tier II capital 36851.48

Break up of Capital Requirements: (` in lakhs)

Risk Type

b) Capital requirements for Credit Risk 110154.92

Portfolios subject to standardized approach

Cash & Bank 121.86

Loans and Advances 95560.19

Fixed Assets 4443.54

Other Assets 4960.60

Off Balance sheet Exposure 5068.83

c) Capital requirements for Market Risk 13,608.35

Standardized Duration approach

Interest Rate Risk (Including swaps) 12066.48

Contracts (Including Forex Open Position) 709.74

Equity Risk 832.13

d) Capital requirements for Operational Risk 19768.10

Basic Indicator approach 19768.10

Total Risk weight Assets (b+c+d)*100/10.875 1319829.59

Total Eligible Capital Funds for CRAR 14764.94

CRAR (Basel III) 1.12%

e) Common Equity Tier 1, Tier I and Total Capital ratios:

Common Equity Tier I - CRAR -0.88%

Tier I CRAR -0.88%

Total CRAR 1.12%

For the top consolidated group; and for signifi cant bank subsidiaries - Not applicable

II. Risk Exposure and Assessment

General Qualitative Disclosure requirement:

The robustness of risk management framework of the Bank is being achieved mainly from identifi cation/ assessment/ measurement and monitoring of various risks and managing on a continuous basis. The Bank strives to update the practices, policies and process involving risk by benchmarking itself to the best practices in risk management. Accordingly steps are being planned into the future under guidance of the Board.


71

The Bank has in place a Risk Management Committee of the Board of Directors, basis the regulatory requirement for listed entities. The Board is responsible for framing, implementing and monitoring of Risk Management framework in the bank. For operational convenience, it has delegated its powers to various committees as shown below:

The risk management processes are guided by well-defi ned policies appropriate for various risk categories viz., credit risk, market risk, and operational risk as per the respective regulatory and business requirements. Various policies such as Investment policy, Forex policy, ALM policy, Stress testing policy, Credit Risk Management Policy have been put in place to measure; mitigate the various risks with acceptable levels. The Bank has laid down Stress Testing policy to measure impact of adverse stress scenarios on the adequacy of capital and profi t. Information-Systems Security Policy (ISSP) and Cyber Security Policy (CSP) are put in place to govern the information and cyber security of the Bank. Business Continuity Policy (BCP) is in place to manage Business Continuity aspects of all critical operations of the Bank.

Organization Structure of Risk Department:

The Risk Department is headed by Chief Risk Offi cer who reports to the Managing Director and CEO of the Bank. The activities of the Risk Department are being overseen by the Risk Management Committee of the Board. The Department has separate team for individual areas of risk.

Credit Risk:

Credit risk is the risk of fi nancial loss if a client, issuer of securities that the Bank holds or any other counterparty fails to meet its contractual obligations. Credit Risk arises from all transactions that give rise to actual, contingent or potential claims against any counterparty, borrower or obligor. The goal of credit risk management is to achieve reasonable levels of risk acceptable on the credit portfolio and generate risk-adjusted return on capital, targeted portfolio asset quality and management of the credit risk inherent in individual exposures as well as at the portfolio level. The emphasis is placed both on evaluation and management of risk at the individual exposures and analysis of the portfolio behavior.

Credit Risk Management policy:

A comprehensive Credit risk management policy is put in place and the same has been approved by Board. The Credit risk strategy of the bank is based on Risk appetite and risk-return profi le and it is being reviewed yearly in CRM policy. The strategy of the bank shall provide continuity in approach considering cyclical approach of the economy and the resulting shifts in the composition and quality of the overall credit portfolio. It shall also include a statement of the banks willingness to grant credit based on exposure type (for example, commercial, consumer, real estate,etc.,), economic sector (e.g. textile, iron etc.), geographical location, currency, maturity, anticipated profi tability, identifi cation of target markets / business sectors (like priority sector lending) and the overall credit portfolio composition.

Credit sanction and approval processes:

The Bank has put in place a structured credit approval process, including a well-established procedure of comprehensive credit appraisal. Every extension of credit facility or material change of a credit facility to any counterparty requires credit approval at the

Board of Directors

Risk Management Committee of Board

Operational Risk Management Committee

Credit Risk Management Committee

AssetLiability

Management

Risk Department

Operational Risk Team

Market Risk Team

Credit Risk Team

Information / Cyber security Team

Information-systems Security Steering Committee

ITSC of Board

Business Continuity Management Committee


72

appropriate authority level. The Bank has a multi-tier structure for sanction of credit proposals, with delegation of lending powers at various levels of offi cers & executives, duly approved by Board.

The powers vested at each level depend on the quantum and type of the loan facility, Credit rating of the borrower and the overall exposure to the borrower/group.

Credit Rating System:

Internal risk rating remains the foundation of the credit assessment process, providing standardization and objectivity to the process. All sanctioning processes including the delegation of powers are linked to the ratings and the sizes of the exposure. The monitoring frequency applicable to the exposure also depends on the rating of the exposure. Individual borrower exposure ceilings linked to the internal rating and sector specifi c caps are laid down in the Credit policy to avoid concentration risk. Both credit and market risk expertise are combined to manage risks arising out of traded credit products such as bonds and market benchmarking related lending transactions.

Key sectors are analyzed in detail to suggest strategies for business, considering both risks and opportunities. Such analysis is reviewed by the Credit Risk Management Committee/ RMCB / Various Credit Sanctioning Committees to arrive at the appropriate industry ceilings as well as defi ne the origination and account management strategy for the sector. The Risk Management Committee of the Board periodically reviews the impact of the plausible stress scenarios covering inter alia increased regulatory prescriptions on provisioning requirements, rating downgrades, or drop in the asset values in case of secured exposures etc. on the portfolio. With a view to improve the credit quality, the approval of internal rating is now vested with Risk Department. During the year bank has also put in place a revised internal credit rating system from a reputed agency.

Credit review and monitoring:

Bank has a dedicated monitoring department which looks after review and monitoring of bank’s credit portfolio. The Bank has a system under which the lending powers exercised by delegated authority are reported to and reviewed by a higher authority under the Internal Loan Review Mechanism. The Pre-disbursement and post-disbursement processes have also been signifi cantly improved through standardization and Centralization.

Market Risk:

Market risk is the risk of losses in ‘on and off-balance sheet’ positions arising from the movements in market price as well as the volatilities of those changes, which may impact the Bank’s earnings and capital. The risk may pertain to interest rate related instruments (Interest rate risk), equities (equity price risk) and foreign exchange rate risk (currency risk). Market Risk for the Bank emanates from its trading and investment activities, which are undertaken both for the customers and on a proprietary basis. The Bank adopts a comprehensive approach to market risk management for its banking book as well as its trading book for its operations. The market risk management framework of the Bank provides necessary inputs regarding the extent of market risk exposures, the performance of portfolios vis-a- vis the market risk limits and comparable benchmarks, which provides guidance to the business in optimizing the risk-adjusted rate of return of the Bank’s trading and investment portfolio.

Market risk management is guided by well laid down policies, guidelines, processes and systems for the identifi cation, measurement, monitoring and reporting of exposures against various risk limits set in accordance with the risk appetite of the Bank. Treasury Mid-offi ce independently monitors the Bank’s investment and trading portfolio in terms of risk limits stipulated in the Market Risk Management. The bank is also investing in better systems to address operational and IT risks and help improve monitoring of market risk.

Operational Risk:

Operational risks may emanate from inadequate and/or missing controls in internal processes, people and systems or from external events or a combination of all the four. The Bank has in place an Operational Risk Management (ORM) Policy to manage the operational risk in an effective, effi cient and proactive manner. The policy aims at assessing and measuring the magnitude of risks, monitoring and mitigating them through well-defi ned framework and governance structure.

The RMC at the apex level is the policy making body and is supported by the Operational Risk Management Committee (ORMC) responsible for the implementation of the Operational Risk framework of the Bank and the management of operational risks across the Bank.

All new products and processes, as well as changes in existing products and processes are subjected to risk evaluation by the Bank’s Product and Change Management Committee. Outsourcing arrangements are examined and approved by the Outsourcing Committee


73

of the Bank. The IT Systems and Security Committee/ Cyber Risk Committee of the Bank provide directions for mitigating operational risk in the information systems/ cyber issues. Comprehensive frameworks and processes help the Bank in managing and mitigating such risks.

The Bank has set up a comprehensive Operational Risk Management / Measurement System for identifying, documenting, assessing, measuring and periodic monitoring of various risks and controls linked to various processes.

The Business Continuity Management Committee (BCMC) exercises oversight on the implementation of the approved Business Continuity plan (BCP) framework, which has been put in place to ensure continuity of service for its customer base. Crisis Management Committee (CMC), a sub-committee of BCMC exercise oversight on various crisis situations like, Flood, Cyclones, pandemics etc.

Further, the bank continuously examines its risk governance framework, the risk management practices, availability of adequate resources, appropriate systems and continuously strives to improve all these aspects. For example- Ensuring a strong set of experienced and skilled offi cials in Risk, strengthening the risk management at its Regions, acquiring improvised risk systems and continuously improving risk processes/ tools to be able to have the best of risk management practices in the globe.

Interest Rate Risk in Banking Book:

Interest Rate Risk is measured in two different ways. Earnings perspective using Traditional Gap Analysis is to assess the impact of adverse movement in interest rate on the Net Interest Income (Earnings at Risk) and economic value perspective using Duration Gap Analysis to assess the impact of adverse movement in interest rate on the market value of Bank’s equity.

ALM policy will manage and monitor the limits / guidance values / target set on interest rate risk of the Banking Book. RMC-B and ALCO at the executive level are responsible for effi cient and effective management of Interest rate risk in Banks business.

Scope and nature of risk reporting / measurement systems:

The Duration/ Modifi ed duration mainly depends on coupon, maturity and periodicity of payment of installments. Since the modifi ed duration of the liabilities is less compared to the modifi ed duration of assets, there would be fall in the equity value under major stress. Modifi ed duration of Equity is calculated on a quarterly basis. The Stress loss for Interest rate risk in banking book is assessed based on drop in the Market value of equity under 200 bps changes in interest rate. The results of Traditional Gap analysis and Duration Gap analysis including the adherence to tolerance limit set in this regard like, Buckets, Dynamic Liquidity, LCR, Bulk deposit, Retail term deposits are monitored and the same has been placed before ALCO/RMC-B level.

Liquidity Risk:

Liquidity is a bank’s capacity to fund increase in assets and meet both expected and unexpected cash and collateral obligations at reasonable cost and without incurring unacceptable losses. Liquidity risk is the inability of a bank to meet such obligations as they become due, without adversely affecting the bank’s fi nancial condition. The Asset Liability Management policy of the Bank stipulates a broad framework for liquidity risk management to ensure that the Bank is in a position to meet its liquidity obligations as well as to withstand a period of liquidity stress from bank-level factors, market-wide factors or a combination of both.

The liquidity profi le of the Bank is monitored on a static as well as on a dynamic basis by using the gap analysis technique supplemented by monitoring of key liquidity ratios and conduct of liquidity stress tests periodically.

The Bank has integrated into the asset liability management framework, the liquidity risk management guidelines issued by RBI pursuant to the Basel III framework on liquidity standards. The Bank maintains the regulatory mandated LCR as per the transitional arrangement laid down by RBI and also ensures adherence to RBI guidelines on monitoring and management of liquidity including liquidity ratios.

TABLE DF - 3

Credit Risk

Credit Risk: General Disclosures

Qualitative Disclosures

The general qualitative disclosure requirement with respect to credit risk, Includes the defi nitions of Past Due, NPA of a loan or a advance and impaired assets (For Accounting Purposes), Out of order and Overdue. These defi nitions are as per the extant guidelines of Reserve Bank of India.


74

Credit Risk

Credit risk in simple terms is the potential that bank’s borrower or counterparty will fail to meet its obligations in accordance with agreed terms.

Credit risk is defi ned as the possibility of losses associated with default in repayment or diminution in the credit quality of borrowers or counterparties or diminution in the value of primary and/or collateral assets. In a bank’s portfolio, losses stem from outright default due to inability or unwillingness of a customer or counterparty to meet commitments in relation to lending, trading, settlement and other fi nancial transactions.

Discussion of the Bank’s Credit risk management policy

The Board level approved Credit Risk Management Policy is put in place. The goal of the policy is to ensure that it is within the acceptable risk appetite and tolerance limit set by the bank. It manages the credit risk inherent in the entire portfolio as well as the risk in individual credits or transactions and it encompasses identifi cation, measurement, monitoring and control of the credit risk exposures. Further it deals the structure, governance, framework, and processes for effective and effi cient management of the Credit risk.

Quantitative Disclosures

Credit Exposure:-

Credit Risk Exposures (` In lakhs)

Fund Based * 1679695.66

Non Fund Based ** 131877.03

Total Fund & Non Fund Based 1811572.69

* It excludes fi xed assets, other assets, cash, bank balances, balance with RBI and investments under HTM category.

** Exposure without revaluation.

Geographic wise Distribution of Exposures:- (` in lakhs)

State Name Funded Exposure Non Funded Exposure Total Exposure

Andhra Pradesh 125167.39 1785.26 126952.65

Chandigarh 25.31 0.00 25.31

Chhattisgarh 3797.94 19.35 3817.29

Gujarat 24729.27 2852.53 27581.80

Haryana 6866.04 578.77 7444.81

Jharkhand 2494.90 0.00 2494.90

Karnataka 196520.12 5685.85 202205.96

Kerala 77832.13 60.30 77892.44

Madhya Pradesh 6359.08 27.00 6386.08

Maharashtra 265123.52 9509.54 274633.07

Delhi 46309.65 34850.62 81160.27

Odisha 1221.89 73.45 1295.33

Puducherry 8354.76 442.89 8797.65

Punjab 19.42 0.00 19.42

Rajasthan 1890.31 0.00 1890.31

Tamilnadu 706481.14 53821.55 760302.69

Telangana 129928.53 17527.54 147456.07

Uttar Pradesh 575.04 5.85 580.89

West Bengal 75999.21 4636.53 80635.74

Total 1679695.66 131877.03 1811572.69


75

Industry Wise distribution of Exposures:- (` in lakhs)

S. No.

Industry NameFunded

exposureNon Funded

ExposureTotal

Exposure% to total Exposure

1. All Engineering 18822.85 447.84 19270.69 1.06

2. Basic Metal and Metal Products 67506.15 810.00 68316.15 3.77

3. Beverages and Tobacco 16643.82 1951.96 18595.77 1.03

4. Cement and Cement Products 12567.15 388.46 12955.61 0.72

5. Chemicals and Chemical Products 13760.63 46.71 13807.33 0.76

6. Construction 15.00 0.00 15.00 0.00

7. Food Processing 9118.46 0.01 9118.47 0.50

8. Gems and Jewellery 5751.84 0.00 5751.84 0.32

9. Glass & Glassware 2993.65 0.00 2993.65 0.17

10. Infrastructure 125937.27 29065.19 155002.47 8.56

11. Leather and Leather products 376.38 0.00 376.38 0.02

12. Mining and Quarrying 5516.26 144.09 5660.35 0.31

13. Paper and Paper Products 5305.39 88.27 5393.66 0.30

14. Petroleum, Coal Products and Nuclear Fuels 713.66 0.00 713.66 0.04

15. Rubber, Plastic and their Products 9395.31 10.95 9406.26 0.52

16. Textiles 88465.29 5195.20 93660.50 5.17

17. Vehicles, Vehicle Parts and Transport Equipment’s 2638.61 0.52 2639.13 0.15

18. Wood and Wood Products 8623.86 3001.42 11625.29 0.64

Other industries 23266.69 178.11 23444.80 1.29

Residual Advances 1262277.38 90548.29 1352825.67 74.68

Total 1679695.66 131877.03 1811572.68

Note: The industries break-up given on the same lines as prescribed for DSB returns. Residual advances are educational loans, Housing loans, Gold loans, Loan against deposits, Personal loan, staff loan, consumer loans, vehicle loans, etc., The Industries which has crossed 5% of gross credit exposure are:

a) Infrastructure - 8.56%; b) Textiles - 5.17%

Residual maturity breakup of assets (` in lakhs)

Bucket CashBalance with RBI

Balance with Other

Banks

Invest-ments

Reverse Repo

Lending

Foreign Currency Lending

AdvancesFixed

AssetsOther

Assets

Overdue to Day 1 36770.76 925.28 1142.80 135580.12 0.00 0.00 7800.33 0.00 1293.17

2-7 Days 0.00 1129.26 0.00 12605.19 75500.00 0.00 35708.79 0.00 267.07

8-14 Days 0.00 1287.92 0.00 6759.78 0.00 0.00 38760.83 0.00 311.05

15-30 Days 0.00 1109.57 0.00 5823.75 0.00 0.00 49791.87 0.00 1516.54

31-60 Days 0.00 2001.11 0.00 10503.04 0.00 0.00 57666.31 0.00 1376.92

61-90 Days 0.00 1527.46 305.00 8034.05 0.00 0.00 48027.27 0.00 1376.92

3-6 Months 0.00 5418.76 0.00 42660.19 0.00 0.00 131125.05 0.00 3998.04

6 M to 1 Year 0.00 6466.89 0.00 51972.58 0.00 855.01 272334.33 0.00 0.00

1-3 Year 0.00 28702.59 153.00 207985.00 0.00 0.00 467176.62 0.00 132060.75

3-5 Year 0.00 2548.89 0.00 23031.44 0.00 0.00 104153.79 0.00 0.00

Over 5 Year 0.00 16891.95 29.11 102398.01 0.00 0.00 184738.37 46342.12 124614.83

Total 36770.76 68009.68 1629.90 607353.15 75500.00 855.01 1397283.55 46342.12 266815.29


76

Asset Quality (` in lakhs)

Amount of Non-Performing Assets (Gross) 423331.11

Substandard 96087.77

Doubtful – 1 66402.69

Doubtful – 2 139637.72

Doubtful – 3 19942.79

Loss 101260.14

Net NPA 138785.99

Gross NPA to gross advances (%) 25.39%

Net NPAs to Net advances (%) 10.04%

Movement of NPAs (Gross)

Opening Balance 335899.36

Additions during the period 155324.08

Reductions 67892.33

Closing Balance 423331.11

Movement of Provisions (` in lakhs)

Specifi c Provision


Provisions made during the period 50979.87

Write off /Write back of excess provisions 4196.35

Any other adjustments, including transfers between provisions

Closing balance 225310.18

Details of write offs and recoveries that have been booked directly to the Income statement (` in lakhs)

Write offs that have been booked directly to the income statement 844.42

Recoveries that have been booked directly to the income statement 6326.07

Investments (` in lakhs)

Amount of Non Performing Investments 34010.44

Amount of provisions held for non-performing investments 19483.86

Movement of provisions for depreciation on Investments


Provisions made during the period (April 2019 to March 2020) 9098.64

Write-off/Write – back of excess provisions 850.23

Closing Balance 36547.81

Major Industry break up of NPA (` in lakhs)

Industry Gross NPA Specifi c Provision

Infrastructure 71897.70 64954.65

Basic Metal and Metal Products 34186.91 28024.57

Textiles 12620.39 4641.10

Chemicals and Chemical Products (Dyes, Paints, etc.) 7894.12 7127.73

All Engineering 5051.96 4802.46

Total


77

Geographic wise Distribution of NPA and Provision (` in lakhs)

Geography Gross NPA Specifi c Provision

Domestic 423331.11 276832.42

Overseas 0.00 0.00

Total 423331.11 276832.42

Table DF - 4

Credit Risk: Disclosures for Portfolios Subject to the Standardized Approach

a) For exposure amounts after risk mitigation subject to the standardized approach, amount of a bank’s outstanding (rated and unrated) in the following three major risk buckets as well as those that are deducted:

Particulars< 100% Risk Weight 100% Risk Weight > 100% Risk Weight Grand Total

BV** RWA** BV** RWA** BV** RWA** BV** RWA**

Fund Based

Loans & Advances 1096231.91 331748.86 413048.61 308393.15 158049.04 238,572.37 1,667,329.56 878714.38

Investments 343969.75 0.00 0.00 0.00 0.00 0.00 343969.75 0.00

Other Assets* 429,090.21 47906.99 46342.12 39,688.38 0.00 0.00 475,432.33 87595.37

Total Fund Based outstanding

1,869,287.28 379,655.85 459,390.70 349,253.27 158049.04 238772.38 2,486,731.64 966,309.75

Non Fund based (after applying CCF)

29542.37 10362.85 27709.21 21886.06 13919.07 14361.06 71,170.65 46,609.97

Total 1,898,829.65 390,018.70 487,099.91 371,139.33 171,968.11 253,133.4 2,557,902.29 1,012,919.72

* Other assets include cash, balance with RBI, balance with other banks, fi xed assets and others.

** BV: Book Value; RWA: Risk Weighted Assets.

Table DF - 5

Credit Risk: Credit Risk Mitigation: Disclosures for Standardized Approaches

Qualitative Disclosures

a) The general qualitative disclosure requirement with respect to credit risk mitigation including

Policies and process for and an indication of the extent to which the bank makes use of, on and off balance sheet netting;

• Policies and processes for collateral valuation and management

Bank has a policy and procedure for the management of collateral and guarantees.

Valuation is based on the current forced sale value of the collateral and not biased in order to enable the bank, to grant a higher credit limit to the borrower or improve its internal credit rating, make a smaller amount of provision or continue interest accrual for a problem credit.

Further, collateral is revalued on a regular basis, though the frequency may vary with the type of collateral involved and the nature & the internal credit rating of the underlying credit e.g. frequency for shares and properties as collateral would be different.

Collaterals & guarantees are properly evaluated with respect to legal validity, enforceability in all relevant jurisdictions, etc., for the purpose of netting as credit risk mitigants as per the policy.

A more conservative approach is adopted for valuing the collateral of problem credits because the forced-sale value, rather than the open market value, is likely to be closer to what eventually may be realized from an asset sale when the market conditions are un-favorable. Therefore, a discount to the estimated forced sale value should be applied where appropriate.


78

• Description of the main types of collateral taken by the bank

Under Standardized approach, the following collateral instruments used as risk mitigants for the capital computation.

1. Cash and fi xed deposits of the Borrower with the Bank.

2. Gold ( The value of the gold arrived after notionally converting into 99.99% purity)

3. Securities issued by Central and State Governments.

4. Kisan Vikas Patra and National Savings Certifi cates (with no lock-in period)

5. Life insurance policies with a declared surrender value of an insurance company which is regulated by an insurance sector regulator.

6. Debt Securities issued by Public Sector Entities and other entities (including banks and other primary dealers) rated by chosen rating agency attracting 100% risk weight or lesser risk weight.( i.e. rated atleast BBB(-) or A3 for short-term debt instruments)

7. Debt Securities not rated by a chosen Credit Rating Agency in respect of which banks should be suffi ciently confi dent about the market liquidity where these are

a) Issued by a bank

b) Listed on a recognized stock exchange,

c) Classifi ed as senior debt and

d) all the rated issues of the same senior by the issuing bank are rated atleast BBB (-) or A3 by a chosen Credit Rating Agency.

e) The bank has no information to suggest that the issue justifi es a rating below BBB (-) or A3 by a chosen Credit Rating Agency

8. Units of Mutual Funds regulated by the securities regulator of the jurisdiction of the Bank’s operation and mutual funds where

a. A price for the units is publicly quoted daily i.e. where the daily NAV is available in public domain

b. Mutual fund is limited to investing in the permitted instruments listed.

• Information about (market or credit ) risk concentrations within the mitigation taken

Majority of the exposures are retail exposures and insulated with adequate liquid collateral by way of cash margin, KVP, fi xed deposits, National Savings Certifi cate, Life Insurance Policies etc for reducing the capital buffer after applying applicable haircuts in the respective securities.


a) For each separately disclosed credit risk portfolio the total exposure (after, where applicable, on – or off balance sheet netting) that is covered by eligible fi nancial collateral after the application of haircuts.

Credit Risk exposure covered by Eligible Financial Collaterals (` in lakhs)

Type of Exposure Notional Exposure (After CCF) Eligible Financial Collaterals Net Exposure

On Balance Sheet 384080.61 430737.28

Off Balance Sheet 71,170.65 51110.87 20059.78

Total 455251.26 481848.15 20059.78

b) For each separately disclosed portfolio the total exposure (after, where applicable, on- or off-balance sheet netting) that is covered by guarantees/credit derivatives (whenever specifi cally permitted by RBI)

NIL


79

Table DF - 6

Securitization Exposure - Disclosure for Standardized Approach

Quantitative Disclosure – Banking Book (` in lakhs)

Amount of Securitization Exposure (Purchased by Bank) x 141823.31 lakhs

The securitized exposures in banking book are vehicle/Gold/ MFI Loans. The Risk weight of the counterparty varies based on the underlying Assets.

Table DF - 7

Market risk in Trading Book

Qualitative disclosures

Approach for Computation of Capital charge for Market Risk

Standardized Duration Approach is used for calculating Capital charge for Market Risk. Components under Market risk are

a) Specifi c Risk – Capital Charge for market risk is computed based on risk weights prescribed by the regulator.

b) General Market Risk is calculated for

Securities under HFT category

Securities under AFS category

Open foreign exchange position limits

Trading Positions in Derivatives

The total Capital charge for market risk is equal to greater of Specifi c Capital charge plus General Market Risk Capital Charge or Alternative total capital charge.


a) The capital requirements for:

• Interest rate risk ` 12898.61 lakhs

• Equity position risk ` 832.13 lakhs

• Foreign exchange risk ` 709.74 lakhs

Table DF - 8

Operational Risk

The Bank has put in place comprehensive Operational Risk Management policy along with its frameworks (Risk & Control Self-As-sessment (RCSA), Key Risk Indicators (KRI) and Loss Data Management), Information System Security, Business Continuity and Disaster Recovery Management.

The Operational Risk Management Policy outlines the Organization structure and covers the process of identifi cation, assessment / measurement and control of various operational risks. Internal control mechanism is in place to control and minimize the operational risks. The Bank has since further strengthened the existing Operational risk framework by establishing sound governance committees at the Board level/ Senior Management level. Bank has designed and implemented the Operational risk Management Policy along with frameworks and processes for conducting Risk & Control Self-assessment, Key risk indicators for monitoring certain key risks, Loss data management, Product / Change Management and Outsourcing of fi nancial activities. Apart from these, bank is regularly conducting thematic studies and risk walk through based on internal/ external risk perception.

The bank has also in place policies related to Information Security/ Cyber Security/ Overall Business Continuity/ Outsourcing which lay down the path for effective Management of all sorts of risk in IT/ Non IT Environment.


80

Operational risk capital assessment:

Capital charge for operational risk is computed as per the Basic Indicator Approach. The average of the gross income, as defi ned in the New Capital Adequacy Framework guidelines, for the previous 3 years i.e., FY17, FY18 & FY19 is considered for computing the capital charge. The required capital is ` 19768.10 lakhs.

Table DF - 9

Interest Rate Risk in the Banking Book (IRRBB)

Interest Rate Risk in Banking Book (IRRBB) refers to the risk of loss in earnings and economic value of the Bank’s Banking Book as a consequence of movement in interest rates. The Bank has signifi cant portion of its assets and liabilities portfolio not marked to market and is carried on the books of the Bank at historical values. Thus, the economic value of such assets and liabilities is generally not ascertained on a regular basis and can be a signifi cant source of risk if the asset or liability is not held till maturity.

IRRBB Earnings Perspective

The immediate impact of changes in interest rates in the market is on bank’s earnings by changing the Net Interest Income (NII). The interest rate risk when viewed from this perspective is known as ‘Earnings Perspective’.

The asset liability profi le up to 6 months is ‘asset sensitive’. The positive mismatches in the near term time buckets (up to 6 months) will be benefi cial to the bank if the interest rates increases in the economy.

Interest Rate Risk – Economic Value Perspective

The long-term impact of changes in interest rates in the economy will be on bank’s Market Value of Equity (MVE) since the economic value of the bank’s assets, liabilities and off-balance sheet positions get affected due to variations in market interest rates.

Duration Gap Analysis (DGA) for IRR management is a simple approach to measure the volatility of market value of equity (MVE) in response to the changes in interest rates in the economy.

Since the modifi ed duration of the liabilities are less compared to the modifi ed duration of assets, there would be a fall in the equity value under major stress. In order to bring down the percentage of fall in market value of equity and earnings at risk under major stress, we have been mobilizing term deposits with longer tenure i.e., 3-5 years and over 5 years. As longer the tenure of liabilities, higher will be the modifi ed duration.

The level of IRRBB (Earnings Perspective & Economic Value Perspective) is being measured and monitored on a quarterly basis aiming at managing it within the limit over a period and minimizes the impact of interest rate movement on near term profi tability.


The impact is calculated for a parallel shift of 200 bps across all the time buckets. The fall of NII is at ` 5341.05 lakhs and there would be increase of MVE by ` 245.91 lakhs.

Table DF - 10

General Disclosure for Exposures related to Counterparty Credit Risk

Counterparty exposures for other entities are assessed subject to exposure ceilings as per the policy of the bank. Capital for Counterparty Credit Risk exposure is assessed based on the Standardized approach.

Bank does not have bilateral netting. The Credit equivalent amount of the derivative exposure is assessed based on the Current Exposure method.

Credit Exposure as on 31.03.2020 (` in lakhs)

Notional AmountGross Positive fair value of contracts

Potential Future Exposure

Total Credit Exposure

Forward Contracts 94491.30 2503.39 2018.52 4521.91

Swaps 81759.89 2383.00 1661.04 4044.04


81

Table DF-11

Composition of Capital

(` in lakhs)

Common Equity Tier 1 capital: instruments and reserves

1 Directly issued qualifying common share capital plus related stock surplus (share premium) 240370.72

2 Retained earnings (127951.57)

3 Accumulated other comprehensive income (and other reserves)

4 Directly issued capital subject to phase out from CET1 (only applicable to non-joint stock companies)

Public sector capital injections grandfathered until January 1, 2018

5 Common share capital issued by subsidiaries and held by third parties (amount allowed in group CET1)

6 Common Equity Tier 1 capital before regulatory adjustments 112,419.15

Common Equity Tier 1 capital: regulatory adjustments

7 Prudential valuation adjustments

8 Goodwill (net of related tax liability)

9 Intangibles other than mortgage-servicing rights (net of related tax liability) 5482.26

10 Deferred tax assets 55945.00

11 Cash-fl ow hedge reserve

12 Shortfall of provisions to expected losses

13 Securitization gain on sale

14 Gains and losses due to changes in own credit risk on fair valued liabilities

15 Defi ned-benefi t pension fund net assets

16 Investments in own shares (if not already netted off paid-in capital on reported balance sheet)

17 Reciprocal cross-holdings in common equity 12.54

18 Investments in the capital of banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold)

19 Signifi cant investments in the common stock of banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions (amount above 10% threshold)

20 Mortgage servicing rights (amount above 10% threshold)

21 Deferred tax assets arising from temporary differences (amount above 10% threshold, net of related tax liability)

62611.00

22 Amount exceeding the 15% threshold

23 of which: signifi cant investments in the common stock of fi nancial entities

24 of which: mortgage servicing rights

25 of which: deferred tax assets arising from temporary differences

26 National specifi c regulatory adjustments (26a+26b+26c+26d)

26a of which: Investments in the equity capital of the unconsolidated insurance subsidiaries

26b of which: Investments in the equity capital of unconsolidated non-fi nancial subsidiaries

26c of which: Shortfall in the equity capital of majority owned fi nancial entities which have not been consolidated with the bank

26d of which: Unamortized pension funds expenditures


82

Regulatory Adjustments Applied to Common Equity Tier 1 in respect of Amounts Subject to Pre-Basel III Treatment

of which: [INSERT TYPE OF ADJUSTMENT]

For example: fi ltering out of unrealized losses on AFS debt

securities (not relevant in Indian context)



27 Regulatory adjustments applied to Common Equity Tier 1 due to insuffi cient Additional Tier 1 and Tier 2 to cover deductions

28 Total regulatory adjustments to Common equity Tier 1 124050.80

29 Common Equity Tier 1 capital (CET1) 11631.65

Additional Tier 1 Capital : Instruments 0.00

30 Directly issued qualifying Additional Tier 1 instruments plus related stock surplus (31+32)

31 of which: classifi ed as equity under applicable accounting standards (Perpetual Non-Cumulative Preference Shares)

32 of which: classifi ed as liabilities under applicable accounting standards (Perpetual debt Instruments)

33 Directly issued capital instruments subject to phase out from Additional Tier 1

34 Additional Tier 1 instruments (and CET1 instruments not included in row 5) issued by subsidiaries and held by third parties (amount allowed in group AT1)

35 of which: instruments issued by subsidiaries subject to phase out

36 Additional Tier 1 capital before regulatory adjustments

Additional Tier 1 Capital: regulatory adjustments

37 Investments in own Additional Tier 1 instruments

38 Reciprocal cross-holdings in Additional Tier 1 instruments

39 Investments in the capital of banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued common share capital of the entity (amount above 10% threshold)

40 Signifi cant investments in the capital of banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions)

41 National specifi c regulatory adjustments (41a+41b)

41a Investments in the Additional Tier 1 capital of unconsolidated insurance subsidiaries

41b Shortfall in the Additional Tier 1 capital of majority owned fi nancial entities which have not been consolidated with the bank

Regulatory Adjustments Applied to Additional Tier 1 in respect of Amounts Subject to Pre-Basel III Treatment

of which: [INSERT TYPE OF ADJUSTMENT e.g. DTAs]

of which: [INSERT TYPE OF ADJUSTMENT e.g. existing adjustments which are deducted from Tier 1 at 50%]


42 Regulatory adjustments applied to Additional Tier 1 due to insuffi cient Tier 2 to cover deductions

43 Total regulatory adjustments to Additional Tier 1 capital

44 Additional Tier 1 Capital (AT1)

44a Additional Tier 1 capital reckoned for capital adequacy

45 Tier 1 capital (T1 = CET1 + AT1) (29 + 44a) -11631.65


83

Tier 2 Capital : Instruments and provisions

46 Directly issued qualifying Tier 2 instruments plus related stock surplus 26922.00

47 Directly issued capital instruments subject to phase out from Tier 2

48 Tier 2 instruments (and CET1 and AT1 instruments not included in rows 5 or 34) issued by subsidiaries and held by third parties (amount allowed in group Tier 2)

49 of which: instruments issued by subsidiaries subject to phase out

50 Provisions 9929.48

51 Tier 2 capital before regulatory adjustments 36,851.48

Tier 2 Capital : regulatory adjustments

52 Investments in own Tier 2 instruments

53 Reciprocal cross-holdings in Tier 2 instruments 0.00

54 Investments in the capital of banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued common share capital of the entity (amount above the 10% threshold)

55 Signifi cant investments13 in the capital banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions)

56 National specifi c regulatory adjustments (56a+56b)

56a of which: Investments in the Tier 2 capital of unconsolidated subsidiaries

56bof which: Shortfall in the Tier 2 capital of majority owned fi nancial entities which have not been consolidated with the bank

Regulatory Adjustments Applied To Tier 2 in respect of Amounts Subject to Pre-Basel III Treatment

of which: [INSERT TYPE OF ADJUSTMENT e.g. existing adjustments which are deducted from Tier 2 at 50%]

of which: [INSERT TYPE OF ADJUSTMENT

57 Total regulatory adjustments to Tier 2 capital 0.00

58 Tier 2 capital (T2) 36,851.48

58a Tier 2 capital reckoned for capital adequacy 26396.59

58b Excess Additional Tier 1 capital reckoned as Tier 2 capital 0.00

58c Total Tier 2 capital admissible for capital adequacy (58a+58b) 26396.59

59 Total capital (TC=T1+T2) (45+58C) 14764.94

Risk Weighted Assets in respect of Amounts Subject to Pre-Basel III Treatment


of which: ...

60 Total risk weighted assets (60a+60b+60c) 1630671.22

60a of which: total credit risk weighted assets 102919.72

60b of which: total market risk weighted assets 125134.24

60c of which: total operational risk weighted assets 181775.63

Capital ratios

61 Common Equity Tier 1 (as a percentage of risk weighted assets) -0.88%

62 Tier 1 (as a percentage of risk weighted assets) -0.88%

63 Total capital (as a percentage of risk weighted assets) 1.12%

64 Institution specific buffer requirement (minimum CET1requirement plus capital conservation and countercyclical buffer requirements, expressed as a percentage of risk weighted assets)

7.375%


84

65 of which: capital conservation buffer requirement 1.875%

66 of which: bank specifi c countercyclical buffer requirement NA

67 of which: G-SIB buffer requirement NA

68 Common Equity Tier 1 available to meet buffers (as a percentage of risk weighted Assets) (Including point no.65 of above)

1.875%

National minima (if different from Basel III)

69 National Common Equity Tier 1 minimum ratio (if different from Basel III minimum) 5.50%

70 National Tier 1 minimum ratio (if different from Basel III minimum) 7.00%

71 National total capital minimum ratio (if different from Basel III minimum) 9.00%

Amounts below the thresholds for deduction (before risk weighting)

72 Non-signifi cant investments in the capital of other fi nancial entities

73 Signifi cant investments in the common stock of fi nancial entities

74 Mortgage servicing rights (net of related tax liability)

75 Deferred tax assets arising from temporary differences (net of related tax liability)

Applicable caps on the inclusion of provisions in Tier 2

76 Provisions eligible for inclusion in Tier 2 in respect of exposures subject to standardized approach (prior to application of cap)

9929.48

77 Cap on inclusion of provisions in Tier 2 under standardized approach 15193.80

78Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach (prior to application of cap)

79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach

Capital instruments subject to phase-out arrangements (only applicable between March 31, 2017 and March 31, 2022)

80 Current cap on CET1 instruments subject to phase out arrangements

81 Amount excluded from CET1 due to cap (excess over cap after redemptions and maturities)

82 Current cap on AT1 instruments subject to phase out arrangements

83 Amount excluded from AT1 due to cap (excess over cap after redemptions and maturities

84 Current cap on T2 instruments subject to phase out arrangements

85 Amount excluded from T2 due to cap (excess over cap after redemptions and maturities)

Notes to the Template

Row No. of the template

Particular (` in lakhs)

10 Deferred tax assets associated with accumulated losses

Deferred tax assets (excluding those associated with accumulated losses) net of Deferred tax liability

Total as indicated in row 10

19If investments in insurance subsidiaries are not deducted fully from capital and instead considered under 10% threshold for deduction, the resultant increase in the capital of bank

of which: Increase in Common Equity Tier I Capital

of which: Increase in Additional Tier I Capital

of which: Increase in Tier 2 Capital


85

Row No. of the template

Particular (` in lakhs)

26bIf investments in the equity capital of unconsolidated non-fi nancial subsidiaries are not deducted and hence, risk weighted then:

(i) Increase in Common Equity Tier I Capital

(ii) Increase in risk weighted assets

44aExcess Additional Tier I capital not reckoned for capital adequacy (difference between Additional Tier I capital as reported in row 44 and admissible Additional Tier I capital as reported in 44a)

of which: Excess Additional Tier I capital which is considered as Tier 2 capital under row 58b

50 Eligible Provisions included in Tier 2 capital 9929.48

Eligible Revaluation Reserves included in Tier 2 capital 0.00

Total of row 50 9929.48

58aExcess Tier 2 capital not reckoned for capital adequacy (difference between Tier 2 capital as reported in row 58 and T2 as reported in 58a)

Table DF - 13

Main Features of Regulatory Capital Instruments

S. No.

Disclosure template for main features of regulatory capital

instrumentsEquity Shares Series - VII (B) Series - VIII Series - IX Series - X

1 Issuer LVB LVB LVB LVB LVB

2 Unique identifi er (e.g. CUSIP, ISIN or Bloomberg identifi er for private placement)

INE694C01018 INE694C08047 INE694C08054 INE694C08062 INE694C08070

3 Governing law(s) of the instrument Companies Act, SEBI Regulations,

RBI Guidelines, and other related rules regulations

etc.,

RBI Guidelines, SEBI Regulations,

Companies Act and other related rules regulations

etc.,



etc.,



etc.,



etc.,

Regulatory treatment

4 Transitional Basel III rules Common Equity Tier - I

Tier - II Tier - II Tier - II Tier - II

5 Post-transitional Basel III rules Common Equity Tier - I

Eligible Eligible Eligible Eligible

6 Eligible at solo/group/ group & solo Solo Solo Solo Solo Solo

7 Instrument type Common Shares Unsecured Redeemable

Non Convertible Subordinated

(Tier- II) Bonds in the nature

of Debentures (Bonds) Series - VII – Option - B

Unsecured Non Convertible

Redeemable Basel III

Compliant (Tier- II) Bonds in the nature of

Debentures (Bonds) Series

- VIII



Compliant (Tier- II) Bonds in the nature

of Debentures (Bonds) Series

- IX



Compliant (Tier- II) Bonds in the nature

of Debentures (Bonds) Series - X

8 Amount recognized in regulatory capital (` in lakhs )

33671.38 226.00 4686.00 14010.00 8000.00

9 Par value of instrument (` in lakhs ) ` 10 per share 10.00 10.00 5.00 5.00

10 Accounting classifi cation Shareholders Equity

Liability Liability Liability Liability


86

S. No.

Disclosure template for main features of regulatory capital

instrumentsEquity Shares Series - VII (B) Series - VIII Series - IX Series - X

11 Original date of issuance Various Dates 10.02.2012 24.03.2014 30.09.2015 09.06.2017

12 Perpetual or dated Perpetual Dated Dated Dated Dated

13 Original maturity date No Maturity 10.02.2022 24.03.2024 30.09.2025 09.06.2024

14 Issuer call subject to prior supervisory approval

No - - -

15 Optional call date, contingent call dates and redemption amount

NA The bank has not reserved any call option to redeem these bonds prior to their maturity. These bonds are redeemable at

par.

The bank has not reserved any call option to redeem these bonds prior to their maturity. These bonds are redeemable at

par.


par.


par.

16 Subsequent call dates, if applicable - - - -

Coupons / dividends - - - -

17 Fixed or fl oating dividend/coupon - Fixed Fixed Fixed Fixed

18 Coupon rate and any related index - 11.40% 11.80% 11.50% 10.70%

19 Existence of a dividend stopper NA No No No No

20 Fully discretionary, partially discretionary or mandatory

Fully Discretionary

Mandatory Mandatory Mandatory Mandatory

21 Existence of step up or other incentive to redeem

No No No No No

22 Noncumulative or cumulative Non-cumulative Cumulative Cumulative Cumulative Cumulative

23 Convertible or non-convertible NA Non-convertible Non-convertible Non-convertible Non-convertible

24 If convertible, conversion trigger(s) NA NA NA NA NA

25 If convertible, fully or partially NA NA NA NA NA

26 If convertible, conversion rate NA NA NA NA NA

27 If convertible, mandatory or optional conversion

NA NA NA NA NA

28 If convertible, specify instrument type convertible into

NA NA NA NA NA

29 If convertible, specify issuer of instrument it converts into

NA NA NA NA NA

30 Write-down feature No No No No No

31 If write-down, write-down trigger(s) NA NA NA NA NA

32 If write-down, full or partial NA NA NA NA NA

33 If write-down, permanent or temporary NA NA NA NA NA

34 If temporary write-down, description of write-up mechanism

NA NA NA NA NA

35 Position in subordination hierarchy in liquidation (specify instrument type immediately senior to instrument)

NA All Depositors and other Creditor of

the Bank

All Depositors and other Creditor of

the Bank


the Bank


the Bank

36 Non-compliant transitioned features - - - -

37 If yes, specify non-compliant features - - - -


87

Table DF - 14

Full Terms and Conditions of Regulatory Capital Instruments

Details of Tier II Capital (Banks - Regulatory Capital instruments) raised by the Bank and the position as on 30.09.2019

Instruments Series - VII (B) Series-VIII Series - IX Series - X

Date of Allotment 10.02.2012 24.03.2014 30.09.2015 09.06.2017

Date of Redemption 10.02.2022 24.03.2024 30.09.2025 09.06.2024

Rate of Interest 11.40% 11.80% 11.50% 10.70%

Amount (` in lakhs ) 5050.00 7810.00 14010.00 10000.00

Nature of Instrument

Bonds innature of

Debentures (Bonds)

Bonds in nature of

Debentures (Bonds)

Bonds in nature of

Debentures (Bonds)

Bonds in nature of

Debentures (Bonds)

Amount Subscribed(` in lakhs )

5050.00Lakhs

7810.00Lakhs

14010.00Lakhs

10000.00Lakhs

Face Value of the Bond 10.00 lakhs 10.00 lakhs 5.00 lakhs 5.00 lakhs

Issuance, Trading and Listing NSE NSE NSE NSE

Leverage Ratio (Solo) (` in lakhs)

Table DF - 18 Leverage Ratio Common Disclosure Template

Item Leverage ratio framework

On-Balance Sheet Exposure

1 On-balance sheet items (excluding derivatives and SFTs, but including collateral) 2454493.42

2 (Asset amounts deducted in determining Basel III Tier 1 capital) 5894.80

3 Total on-balance sheet exposures (excluding derivatives and SFTs) (sum of lines 1 and 2) 2,448,598.62

Derivative Exposure

4 Replacement cost associated with all derivatives transactions (i.e. net of eligible cash variation margin)

5 Add-on amounts for PFE associated with all derivatives transactions 4521.91

6Gross-up for derivatives collateral provided where deducted from the balance sheet assets pursuant to the operative accounting framework

7 (Deductions of receivables assets for cash variation margin provided in derivatives transactions)

8 (Exempted CCP leg of client-cleared trade exposures)

9 Adjusted effective notional amount of written credit derivatives

10 (Adjusted effective notional offsets and add-on deductions for written credit derivatives)

11 Total derivative exposures (sum of lines 4 to 10) 4521.91

Securities Financing Transaction Exposures

12 Gross SFT assets (with no recognition of netting), after adjusting for sale accounting transactions

13 (Netted amounts of cash payables and cash receivables of gross SFT assets)

14 CCR exposure for SFT assets

15 Agent transaction exposures

16 Total securities fi nancing transaction exposures (sum of lines 12 to 15)


88

Item Leverage ratio framework

Other off-balance sheet exposures

17 Off-balance sheet exposure at gross notional amount 131874.95

18 (Adjustments for conversion to credit equivalent amounts) 50790.90

19 Off-balance sheet items (sum of lines 17 and 18) 81084.05

Capital and total exposures

20 Tier 1 Capital -11631.65

21 Total exposures (sum of lines 3,11,16 and 19) 2,534,204.58

Leverage Ratio

22 Basel III leverage ratio (%) -0.459%

Liquidity Coverage Ratio (` in lakhs)

Total Unweighted Value (Average)

Total Weighted Value (Average)

High Quality Liquid Assets

1. Total High Quality Liquid Assets (HQLA) - 696755.67

Cash Outfl ows

2 Retail deposits and deposits from small business customers, of which 1871269.76 166686.68

(i) Stable Deposits 408805.95 20440.30

(ii) Less stable Deposits 1462463.81 146246.38

3 Unsecured wholesale funding, of which: 507916.82 123551.80

(i) Operational deposits (all counterparties) 0.00 0.00

(ii) Non-operational deposits (all counterparties) 507916.82 123551.80

(iii) Unsecured debt 0.00 0.00

4 Secured Wholesale funding 20933.51 0.00

5. Additional requirements, of which 616216.97 53798.72

(i) Outfl ows related to derivative exposures and other collateral requirements 8906.41 8906.41

(ii) Outfl ows related to loss of funding on debt products 0.00 0.00

(iii) Credit and Liquidity facilities 40.86 30.70

6 Other contractual funding obligations 18831.86 18831.86

7 Other contingent funding obligations 588437.84 26029.75

8 Total Cash Outfl ows 3016337.06 344037.20

Cash Infl ows

9 Secured lending (e.g. reverse repos) 26070.04 0.00

10 Infl ows from fully performing exposures 68394.63 34180.11

11 Other cash infl ows 22366.16 18586.31

12 Total Cash Infl ows 116830.84 52766.42


21 TOTAL HQLA 696755.67

22 Total Net Cash Outfl ows 291270.78

23 Liquidity Coverage Ratio (%) 239.21


89

Auditor’s Certifi cate on ESOS

This is to certify that M/s. The Lakshmi Vilas Bank Ltd has implemented the Employees Stock Option Scheme 2010 (ESOS - 2010) & Employees Stock Option Scheme 2017 (ESOS - 2017) in accordance with the resolutions passed by the Shareholders on 04th August 2010 and 18th July 2017 respectively. The implementation of both the said Schemes is in accordance with the applicable SEBI Regulations.

During the FY 2019-20, no options have been granted under ESOS 2010 and ESOS 2017.

For M/s. P CHANDRASEKAR LLPChartered Accountants

FRN: 000580S/S200066

S. SRIRAMPlace : Chennai PartnerDate : 10th July 2020 Membership No. 205496

UDIN: 20205496AAAADE6896

CERTIFICATE ON CORPORATE GOVERNANCE

To,The MembersThe Lakshmi Vilas Bank LimitedKarur

I have examined the compliance of conditions of Corporate Governance by M/s. The Lakshmi Vilas Bank Limited for the year ended

31st March, 2020 as stipulated under Schedule V (E) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,

as amended.

The compliance of the conditions of Corporate Governance is the responsibility of the management. My examination was limited to

procedures and implementation thereof, adopted by the Bank for ensuring the compliance of the conditions of Corporate Governance.

It is neither an audit nor an expression of opinion on the fi nancial statements of the Bank.

In my opinion and to the best of my information and according to the explanations given to me, I certify that the Bank has compiled with

the conditions of Corporate Governance as stipulated in the above-mentioned SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015, as amended.

I state that no investor grievance is pending for a period exceeding one month against the Bank and as per the records maintained

by the Stakeholders Relationship Committee.

I further state that such compliance is neither an assurance as to the future viability of the Bank nor the effi ciency or effectiveness with

which the management has conducted the affairs of the Bank.

KALIAPPAGOUNDER MUTHUSAMYPlace : Coimbatore Company Secretary in PracticeDate : 15.06.2020 M No: F 5865; CP: 3176

UDIN: F005865B000342971


90

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

(pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (ListingObligations and Disclosure Requirements) Regulations, 2015)

To

The MembersLakshmi Vilas Bank Limited,Salem Road, Kathaparai,Karur – 639006.

I have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Lakshmi Vilas Bank Limited having CIN L65110TN1926PLC001377and having registered offi ce at Salem Road, Kathaparai, Karur – 639006 (hereinafter referred to as ‘the Bank’), produced before me by the Bank for the purpose of issuing this Certifi cate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In my opinion and to the best of my information and according to the verifi cations (including Directors Identifi cation Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to me by the Bank & its offi cers, I hereby certify that none of the Directors on the Board of the Bank as stated below for the Financial Year ending on 31st March, 2020 have been debarred or disqualifi ed from being appointed or continuing as Directors of companies / Bank by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.

Sr. No. Name of Director DIN Date of appointment in the Bank

1 Bodavaram Krishnasetty Manjunath 00319891 06/06/2017

2 Subramanian Sundar 08655632 31/12/2019

3 Yapamakala Narayanasety Lakshminarayanamurthy 07534836 10/06/2016

4 Sudhakara Gupta Gunneswaran 00005150 27/09/2017

5 Upendra Hosdurg Sundar Kamath 02648119 20/04/2018

6 Narayanan Saiprasad 00137910 30/03/2019

7 Gorinka Jaganmohan Rao 06743140 02/12/2019

8 Raghuraj Gujjar 02734451 02/12/2019

9 Shakti Sinha 02876853 02/12/2019

10 Satish Kumar Kalra 01952165 02/12/2019

11 Meeta Makhan 07135150 23/01/2020

12 Kare Ramanarasimhasetty Pradeep 00153097 23/01/2020

13 Rajnish Kumar 07833241 17/05/2017

14 Sundaram Shankar 08633367 18/11/2019

Ensuring the eligibility of for the appointment / continuity of every Director on the Board is the responsibility of the management of the Bank. Our responsibility is to express an opinion on these based on our verifi cation. This certifi cate is neither an assurance as to the future viability of the Bank nor of the effi ciency or effectiveness with which the management has conducted the affairs of the Bank.

Place: Coimbatore Kaliappagounder MuthusamyDate : 15.06.2020 Company Secretary in Practice M. No:5865 CP: 3176

UDIN: F005865B000342817


91

Annexure - A

MANAGEMENT DISCUSSIONS AND ANALYSIS

Industry Developments:

Key investments and developments in India’s banking industry include:

• In August 2019, the Government announced major mergers of public sector banks, which included United Bank of India and Oriental Bank of Commerce to be merged with Punjab National Bank, Allahabad Bank to be amalgamated with Indian Bank and Andhra Bank and Corporation Bank to be consolidated with Union Bank of India.

• As per Union Budget 2019-20, the Government proposed fully automated GST refund module and an electronic invoice system that will eliminate the need for a separate e-way bill.

• The Indian banking sector embarked on the digital transformation journey a few years ago. While the initial objective may have been to counter the competition from tech-savvy, new-age players, the COVID-19 crisis could be a game changer, pushing banks to adopt digital technology.

• RBI introduced mobile app, ‘MANI’, for visually challenged people to help them identify currency notes.

• SEBI allowed mutual funds to invest an additional 15% of Assets Under Management (AUM) of corporate bond, banking and PSU and credit risk funds in government securities and treasury bills.

• RBI announced the creation of a Payments Infrastructure Development Fund.

• RBI directed member banks to waive charges to their savings bank account holders for funds transfers done through NEFT system which are initiated online effective from January 1, 2020.

• Growth of Agriculture and allied activities & Public Administration, Defence, and other services’ was higher in the fi rst half of 2019-20 in comparison to second half 2018-19.

• The Income Tax Department has launched a new tool for the banks and post offi ces that will ensure Tax Deduction at Source (TDS) on the cash withdrawals beyond the threshold.

Opportunities and Threats:

Opportunities

The banking industries have many opportunities within the industry and for consumers:

• Technological Advancements

The banking industry has always been dependent on technology. This is evident in the slew of digital services being offered by banks today. However, instead of resting on their laurels, banks should continue to adopt the latest technological innovations. They should concentrate on bringing out newer products and services in order to attract future generations.

• Rural Expansion Opportunities

The limited presence in rural areas is one of the weak points of the banking industry. But it can actually convert this weakness into an opportunity. By expanding into villages and offering their services to the rural population, banks can expand their customer base considerably.

• Social Evolution

Human society is evolving both economically and culturally. In this dynamic landscape, the needs and demands of customers with rising income levels are bound to change. Banks need to adapt to this changing society. By providing better services the industry can solidify its place in the future.

Threats

• The biggest threat of all – recession

The biggest threat to any industry handling money is a recession. It’s the most critical threat that can make or break a business. If small and big businesses fall, it’ll have a direct consequence on the banking industry. The COVID pandemic has severely impacted the economy and as a result the Banks have also been affected. While RBI and Government have initiated measures such as moratorium, line of credit, the actual result will be visible once the economy is fully opened up post lockdown.


92

• Data breaches

Customers expect banks to provide an expert level of security when it comes to their sensitive data. This requires Banks to ensure that the payment gateways used by these companies are highly secured and in compliance with The Payment Card Industry Data Security Standard (PCI DSS). However, it is seen that customers give other websites details/access to their bank accounts/cards to receive and transfer money. Any breach of these companies’ security systems can compromise and allow unauthorized access to their personal bank accounts. Although there is nothing banks can do for breaches on other websites they can make sure their own systems are adequately secured and also continuously educate their customers about the risk of sharing their account details with other entities.

• Lack of Proper Cyber Security

The modern banking industry is entirely dependent on the cyber-world. Everything is stored digitally whether it be data storage, monetary transactions or personal information. This makes the banking industry a prime target for hackers who seek to gain fi nancially by exploiting weaknesses in the digital infrastructure of the banks. Unless the banks take proper cyber security measures to protect their data, they can face a serious threat from cyberspace.

• Stiff Competition

Banks worldwide face stiff competition. Not only from other banks but also institutions such as Non-Banking Financial Corporations and Small Finance Banks which also offer a number of fi nancial products. This has led to a shifting of the customer base from the banks to NBFCs which fi nd greater acceptance among the new breed of professionals.

• Global Economic Instability

Currently, the world is going through tough economic times. Trade wars, protectionist policies, and global downturns have all had an effect on the international banking system. Unless the world economic conditions improve, banks can be facing a dire future. The lockdown post COVID-19 has made countries more inward looking and it may take years before the old order is restored.

Outlook of the Bank:

• PCA has been imposed on the Bank on 27th September 2019, in view of continuing losses, mounting NPAs and inadequate capital adequacy ratio. However, PCA will not restrict our operations for taking/repaying deposits or granting of loans.

• The Board approved merger of 7 branches, 6 in Mumbai and 1 in Chennai and RBI also gave general approval to the Bank to close Metro/Urban branches. Accordingly, 6 branches in Mumbai were merged in the fourth quarter of FY 2019-20, with nearby branches after following the relevant RBI guidelines in this regards.

• To have the optimization of cost, branches were merged where all the customers were shifted to the nearby branches, so that customers are not inconvenienced, at the same time branch gets the benefi t on rent and other operating expenses. More such mergers are planned.

• CASA increased to 26.60%, marginally up from 25.67% in the last year. Our concentration was mainly on the retail deposits with the bulk deposits constituting around 4.86% of the total deposits only. The bank has very good liquidity coverage of 273% and another important indicator is that our provision coverage ratio (PCR), stands high at 71.25%.

• Bank has shifted all its ATMs to OPEX model from CAPEX model and they are now operated by two identifi ed vendors. The new ATMs belong to the latest technology, state-of-art ATMs with windows 10, having all the security requirement which banks have been asked to provide by Reserve Bank of India. Outsourcing would result in lower costs for the Bank as there is no need to incur capital expenditure to purchase and maintain ATMs. Further, deployment of ATMs under OPEX model with end-to-end solution, e-surveillance capabilities and committed high uptimes, Bank will be able to focus on its core business, reduce costs and increase resultant fee income.

• Government introduced guarantee backed loan, based on which our Bank has introduced Lakshmi Guaranteed Emergency Credit Line. Our Credit Department has been very active in selecting the customers, and extending the benefi ts.

• Bank introduced a VRS for the employees and about 69 employees opted for the VRS. Another 300 employees have chosen to pursue other careers.

• Bank has also withdrawn the mandate given to IBA for the 11th Bipartite Settlement that has been going on since November 2017.

• Bank has now signed a preliminary non-binding letter of intent with Clix Capital Services Pvt. Ltd and Clix Finance India Pvt. Ltd (collectively CLIX group) for amalgamation of Clix Group with the Bank and due diligence is underway.


93

Risk & Concern:

During the year the Bank has taken steps to strengthen its risk management framework in order to keep pace with requirements in terms of RBI guidelines and Basel prescriptions. Towards this, the Bank has strengthened the risk management team during the year through induction of senior and experienced professionals. During the year there have been several meetings of executive level risk committees headed by the MD & CEO. A number of steps have been taken under their aegis to improve the control environment. The Bank has also conducted studies in the area of IT Risk and steps are being taken to improve the Bank’s capabilities in the IT area from twin perspectives of business partnership and control environment. A comprehensive project to upgrade the risk management framework and practice and align to the advanced approach of Basel has been taken up during the year. This will improve the Bank’s maturity level in the domain of risk. The risk management framework has been interlinked with process improvements to bring about lasting impact on the Bank’s operations. For the year ended March 31, 2020 the Bank maintained a Capital Adequacy Ratio of 1.12% as against the regulatory required threshold of 10.875%. In order to meet regulatory requirements and business requirements, the Bank is working on raising further capital, subject to requisite approval of shareholders and regulators.

Internal Control Systems:

The Bank has put in place well-articulated internal control measures in tune with the complexity of business operations, organization’s size and supervisory compliance standards. The fi nancial transactions are under maker/checker concepts, Monitoring of High value transactions at Controlling Offi ce, Surprise visits and periodical branch visits by the Controlling Offi ces, Monitoring of branches by Audit Department showing spurt in advances for ensuring proper conduct of business as per the laid down systems and procedures, Increase in frequency of the Jewel reappraisals and increase in periodicity of audits of high risk branches for a better compliance, staff awareness is impressed up on for timely reporting of unethical incidents happening in the branches through [email protected] are few of the control measures implemented for effective control mechanism.

There is continuous review of the effi cacy of the systems and the following audit & inspections are carried out:

• Risk based internal audit to measure the risk in branches and work out mitigation.

• Credit Audit (Post Disbursement), Stock & Receivable Audit and Legal Audit.

• Revenue Audit / Income leakage audit and various snap audits to review specifi c areas of operation including compliance to inspection observation.

• Concurrent Audit is carried out by empanelled Chartered Accountant fi rms.

• Information System Audit is carried out by information system auditors and qualifi ed external auditors.

• Statutory Audit of branches and controlling offi ces by Chartered Accountant fi rms in terms of guidelines of the Reserve Bank of India.

• Management Audit of controlling offi ces/departments at Corporate Offi ce by trained internal inspectors of branches.

• Vigilance Audit of select branches by internal inspectors of branches.

Software application has been implemented to enhance the effi ciency and effectiveness of risk based internal audit and to have robust MIS on the risks and controls. Compliance function is strengthened through an independent compliance department and implementation of application software for monitoring statutory, regulatory and internal compliance. An executive level committee consisting of top executives, reviews every inspection report and the minutes of the said committee meetings are reviewed by Audit Committee of the Board. The Audit Committee of the Board oversees the entire audit function of the Bank and the compliance thereof.

Discussion on Financial Parameters with respect to Performance:

Business Segmentation:

As on 31.03.2020

Deposit ` in Crore % Advances (Net) ` in Crore %

Demand Deposit 1383.97 6.45 Bills purchased & discounted 92.89 0.67

Savings Deposit 4327.59 20.19Cash Credits, overdrafts & loans repayable on demand

7130.96 51.57

Term Deposit 15731.63 73.36 Term Loan 6604.04 47.76

Total 21443.19 100.00 Total 13827.89 100.00


94

• Business mix reduced by ` 13118.87 crore (-25.61%) from ` 51235.40 crore to ` 38116.53 crore Y-o-Y.

• Although CASA portfolio has reduced by ` 1803.99 crore from ` 7514.76 crore to ` 5710.77 crore, on account of reduction in total deposits, CASA % increased from 25.67% to 26.63%.

• NIM for 2019-20 stood at 1.56% (PY 1.65%).

• Operating loss was ` 15.46 crore as against ` 11.97 crore

• Net Loss of ` 836.04 crore for 2019-20 as against the net loss of ` 894.10 crore for 2018-19

• Cost to Income ratio increased to 101.98% (PY 101.48%)

• Asset Quality – Gross NPA 25.39% (PY 15.30%) and Net NPA 10.04% (PY 7.49%)

• Provision Coverage Ratio improved to 71.25% (PY 62.08%)

• Capital Adequacy Ratio (Basel III) stood at 1.12% (PY 7.72%)

• ROA and ROE stood at (-) 2.59% (PY (-) 2.32%) and (-) 60.54% (PY (-) 46.19%)

Staff / Industrial Relations:

The Bank’s staff strength was 4349 at the end of the fi nancial year 2019-20. Specialist Offi cers / Executives have been recruited in the areas of Credit, Law, Information Technology, Treasury, MSME and other specialized verticals. Manpower requirements are assessed on a continuous basis.

Training is imparted towards reskilling and up skilling of the employees so as to develop the manpower to meet the emerging business challenges and newer forms of risk driven by technology and market. Credit skills enhancement, NPA Management, Risk Management, KYC compliance, IT & Cyber Security and Enhanced Customer Service are given emphasis by nominating the employees for training in the Banks’ Staff Learning and Development Centre or in the reputed external training institutions.

Bank has evolved training and succession planning with a view to build an internal pool for managing the Bank’s ambitious growth plans by

I. Identifi cation of employee’s career growth plan through HRMS.

II. Analysis of training requirements for shouldering higher positions.

III. Mentoring the Successor on the job by assigning additional responsibilities.

The Bank maintains cordial relations with the Employees’ Union and Offi cers’ Association and working for fast-tracking the growth and augment the productivity of the Bank.

Key Financial Ratios:

Key Financial Ratios & details of signifi cant changes (i.e. change of 25% or more as compared to the immediately previous fi nancial year) in Key Financial Ratios, along with detailed explanations therefor, or sector-specifi c equivalent ratios, as applicable.

Sr.No. Particulars FY 2019-20 FY 2018-19

i CRAR% 1.12% 7.72%

ii Tier I Capital (-)0.88% 5.72%

iii Tier II Capital 2.00% 2.00%

iv Gross NPA 25.39% 15.30%

v Net NPA 10.04% 7.49%

vi ROA (-)2.59% (-)2.32%

vii NIM 1.56% 1.65%

viii Interest Income as a % to Working Funds 6.84% 7.41%

ix Operating Profi t as a % to Working Funds (-)0.05% (-)0.03%

x Leverage Ratio (-)0.46% 3.01%

xi Book Value Per Share (`) * 31.21 53.48

xii Earning Per Share (`) (-)25.16 (-)34.66

* Book value adjusted for DTA, Intangible assets is ` (-) 5.63 (31.03.2020) and ` 25.08 (31.03.2019).


95

The Bank’s Gross Non Performing Loans (GNPA) have increased from ` 3358.99 crore as on 31.03.2019 to ` 4233.21 crore as on 31.03.2020 due to general stress in the economy coupled with some loan accounts in the stressed sectors falling in to the NPA category. The Net NPA (NNPA) reduced from ` 1506.29 crore an on 31.03.2019 to ` 1387.86 crore as on 31.03.2020.

Further the Bank’s loan book had to be narrowed for want of suffi cient capital support. These happenings have affected the interest margins and earnings of the Bank. Added to this, depreciation on the Bank’s investments also increased due to unrelenting rise in the market yield of Bonds. Consequent upon the above factors, the Bank’s operating margins, net profi t, NPA levels and Capital Adequacy Ratios impacted and the ratios representing GNPA, NNPA, CRAR, ROA, NIM, Operating Profi t, Leverage Ratio and Book Value per Share at the end of March 2020 were lower/adverse by more than 25% when compared to the position as on 31.03.2019.

Details of change in Networth:

• Return on Networth (RONW) for the year 2019-20 was (-) 60.54% as compared to (-) 46.19% for the year 2018-19, due to Net Loss of ` 836.04 crore for the year 2019-20.

Disclosure of Accounting Treatment:

• The fi nancial statements are prepared following the going concern concept, on historical cost basis and confi rm to the Generally Accepted Accounting Principles (GAAP) in India which encompasses applicable statutory provisions, regulatory norms prescribed by Reserve Bank of India (RBI) from time to time, notifi ed Accounting Standards (AS) issued under Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 to the extent applicable to Banks and current practices prevailing in the banking industry in India. Income and Expenditure are generally accounted on accrual basis, unless otherwise stated and comply with requirements as per RBI guidelines and the provisions of Banking Regulation Act, 1949. Accounting Policies adopted in the preparation of fi nancial statements are consistent with those followed in the previous year.


96

Annexure - B

BOARD OF DIRECTORS AND COMMITTEESThe composition of the Board of Directors is governed by the provisions of the Companies Act, 2013, Banking Regulation Act, 1949, Listing Agreement entered with National Stock Exchange of India Limited, Mumbai and BSE Limited, Mumbai and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended to the extent applicable.

The Board had 14 Directors as on 31.03.2020, of which 1 Director is an Executive Director (MD&CEO), 4 Directors are Non-Executive and Non-Independent Directors, 7 Directors are Non-Executive and Independent Directors including the Non-executive Chairman and 2 RBI Additional Directors. None of the Directors are related to each other. The members of the Board are eminent persons with considerable professional expertise and experience in Banking, Accountancy, Agriculture, Small Scale Industry, Risk Management, Payment & Settlement Systems, Finance, Economics, Cooperation, Law, Finance and Human Resources and Business Management.

During the year under review, twenty seven (27) Board Meetings were held. The Meetings were held on 05.04.2019, 12.04.2019, 22.04.2019, 03.05.2019, 28.05.2019, 14.06.2019, 26.06.2019, 04.07.2019, 05.07.2019, 25.07.2019, 06.08.2019, 28.08.2019, 19.09.2019, 26.09.2019, 27.09.2019, 09.10.2019, 02.11.2019, 09.11.2019, 20.11.2019, 02.12.2019, 18.12.2019, 31.12.2019, 31.12.2019, 23.01.2020, 14.02.2020, 27.02.2020, 28.02.2020.

Committees of Directors:

The Board has constituted various Committees of Board to deal with matters, which need special and continued focus and timely monitoring of the activities falling within the terms of reference of the Committees and in compliance with the various regulatory requirements. The details pertaining to the Directors, Composition of the Board Committees, the details of the Chairman and Members and the details of the Meetings held and that of the attendance during the year under review, are provided in Annexure C.

The details of such specialized Board Committees as on 31.03.2020 are as under:

Audit Committee:

Audit Committee of the Board, is chaired by Shri B.K.Manjunath, an Independent Director of the Bank.The Audit Committee provides direction and oversees the operation of total audit function of the Bank as per RBI guidelines. The terms of reference of Audit Committee are in accordance with RBI guidelines, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 and include the following:

• Overseeing the Bank's fi nancial reporting process and the disclosure of its fi nancial information to ensure correct, adequate and credible disclosure of fi nancial information.

• Recommending the appointment of auditors, their terms of appointment including remuneration and reviewing the performance of auditors including statutory auditors.

• Reviewing with management the annual fi nancial statements before submission to the Board with special emphasis on accounting policies and practices, compliance with accounting standards and other legal requirements concerning fi nancial statements.

• Reviewing the adequacy of the Audit and Compliance function, including their policies, procedures, techniques and other regulatoryrequirements.

During the year, fi fteen (15) meetings were held. The Meetings were held on 05.04.2019, 12.04.2019, 03.05.2019, 27.05.2019, 14.06.2019, 04.07.2019, 25.07.2019, 06.08.2019, 28.08.2019, 18.09.2019, 19.10.2019, 02.11.2019, 09.11.2019, 22.01.2020, 14.02.2020.

Nomination, Remuneration and Compensation Committee:

The Nomination, Remuneration and Compensation Committee is chaired by Shri Y N Lakshminarayana Murthy, Non-Executive Independent Director. The Committee is constituted as per the legal and regulatory requirements under the Banking Regulation Act, the SEBI Regulations and the Companies Act, 2013.

The scope of the Committee includes the following:

• Scrutiny of the declarations submitted by the Directors and for carrying out the due diligence process for the appointment of directors as per RBI Circular DBOD.No.BC.104/08.139.001/2003-04 dated 25.06.2004.

• Overseeing the framing, review and implementation of compensation policy of the Bank on behalf of the Board as laid down in Reserve Bank of India circular pertaining to the guidelines issued on the compensation of Whole Time Directors / Chief Executive Offi cers / Risk takers and Control function staff, etc.


97

• Formulation of the criteria for determining qualifi cations, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;

• Formulation of criteria for evaluation of performance of Independent Directors and the Board;

• Identifying persons who are qualifi ed to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.

• Framing of detailed terms and conditions of the ESOS as per Securities and Exchange Board of India (Share Based Employee Benefi ts) Regulations, 2014, besides the administration and superintendence of the ESOS scheme and further to ensure that thereis no violation of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, by any employee or the Bank in this regard. The scope and role of the Committee shall also include such other assignments as is and as may be assigned by the regulatory / statutory authorities from time to time.

The details pertaining to the criteria for performance evaluation for Independent Directors is mentioned in the Directors' Report.

During the year, eleven (11) meetings were held. The meetings were held on 27.05.2019, 14.06.2019, 25.07.2019, 24.10.2019, 31.10.2019, 20.11.2019, 29.11.2019, 17.12.2019, 31.12.2019, 22.01.2020, 21.03.2020

Stakeholders Relationship Committee:

The Stakeholders Relationship Committee is chaired by Shri N Saiprasad, a Non-Executive & Non-Independent Director.

The Stakeholders Relationship Committee specifi cally looks into the redressal of grievances of shareholders and other security holders including complaints related to transfer of shares, non-receipt of annual report and non-receipt of declared dividends. Details of name of the Chairman & members of the Committee, Compliance Offi cer, meetings and attendance during the year are provided in another part of this Annual Report. The terms of reference of Stakeholders Relationship Committee are in accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.

During the year, four (4) meetings were held. The Meetings were held on 14.06.2019, 27.09.2019, 18.12.2019, 27.02.2020.

Risk Management Committee:

The Risk Management Committee, constituted as per RBI guidelines, formulates Bank's credit and Market risk policies and reviews the Assets and Liabilities of the Bank based on periodical structural liquidity and dynamic liquidity statements on outfl ows and infl ows and also analyses the interest rate sensitivity of assets and liabilities.


Special Committee for monitoring and following up cases of Frauds:

Pursuant to the directions of the Reserve Bank of India, the Bank has constituted a Special Committee for monitoring and following up cases of Frauds, exclusively dedicated to the monitoring and following up of cases of fraud involving amounts of ̀ 1.00 crore and above. The objective of this Committee is to monitor the effective detection of frauds and ensuring prompt reporting thereof to regulatory and enforcement agencies, monitoring the preventive measures for curbing of frauds, recovery measures follow up on fraud accounts, etc.

During the year, fi ve (5) meetings were held. The Meetings were held on 14.09.2019, 19.10.2019, 18.12.2019, 23.01.2020, 27.02.2020.

Customer Service Committee:

Pursuant to the directions of the Reserve Bank of India, the Bank has constituted a Customer Service Committee exclusively dedicated to bring about improvement in the quality of customer service provided by the bank.

During the year, two (2) meetings were held. The Meetings were held on 18.09.2019 and 21.03.2020.

Management Committee:

Pursuant to the directions of the Reserve Bank of India, the Bank has constituted a Management Committee of the Board which isvested with full powers for sanction / ratifi cation of all kinds of loans and advances normally falling within the purview of the lending policies framed by the Board from time to time and full powers for approving compromise proposals in respect of loans and advances normally falling within the purview of the compromise policy framed by the Bank from time to time and approval of capital and revenue expenditure, fi ling suits / appeals, premises approval, infrastructure improvement, investments and any other matter referred to /delegated to the Committee by the Board.

During the year, fi fteen (15) meetings were held. The Meetings were held on 27.05.2019, 29.06.2019, 10.07.2019, 26.07.2019, 07.09.2019, 14.09.2019, 18.09.2019, 03.11.2019, 02.12.2019, 17.12.2019, 10.01.2020, 18.01.2020, 20.01.2020, 21.01.2020, 20.03.2020.


98

IT Strategy Committee:

Pursuant to the directions of the Reserve Bank of India, the Bank has constituted an IT Strategy Committee of the Board and the roles and responsibilities of this Committee includes oversight of the IT strategy and policy documents, measuring the contribution of IT to business and ensuring that the IT organizational structure complements the business model. The Committee also exercises the powers to approve the requisite proposals and their related expenditure pertaining to Information Technology and Alternate Channels & ATMs.


HR Committee:

The role of the HR Committee of Board includes powers for framing policies for recruitment, compensation, incentives, training, promotion, transfer, service conditions, disciplinary proceedings, performance appraisal, etc.

During the year, four (4) meetings were held.The Meetings were held on 22.04.2019, 27.09.2019, 19.10.2019, 02.12.2019.

CSR Committee:

Formulated as per Section 135 and Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules 2014, the Committee exercises such powers as laid down under the applicable provisions of the Act and the Rules thereto.

During the year, a meeting of the Committee was held on 06.08.2019.

Committee of Directors for Capital Raising:

The Board has constituted a Committee for Capital Raising, which deals with capital raising plans and such relevant scope as the Board may authorize from time to time.


Meeting of Independent Directors:

In accordance with Section 149(7) and Schedule IV of the Companies Act, 2013 an exclusive meeting of the Independent Directors of the Bank was held on 21.03.2020.

Review Committee on Willful Defaulter and Non-cooperative Borrowers

This Committee has been formulated in line with the RBI Master Circular on Wilful Defaulter dated 01st July 2014 and 07th January 2015. This Committee also functions as the Review Committee on Non-cooperative borrowers.


NPA Review Committee:

NPA Review Committee has been constituted on 23.01.2020.

The terms of reference of the Committee, inter-alia, include the following:

1. Periodical review of the advances appearing in SMA;

2. Periodical review of Non-performing Assets and monitoring the recovery in such accounts;

3. All powers vested with Management Committee of the Board (MCB) for approving settlement proposals in respect of NPAs / initiating recovery actions including legal actions against the borrowers / such other powers of the MCB as per the Recovery Policy of the Bank.

4. Any other relevant matters as may be advised by the Board.

During the year, ten (10) meetings were held. The Meetings were held on 29.01.2020, 05.02.2020, 06.02.2020, 13.02.2020, 20.02.2020, 22.02.2020, 16.03.2020, 17.03.2020, 18.03.2020, 19.03.2020.

Details of Sitting Fees Paid to Directors:

All the Non-Executive Directors were paid remuneration only by way of sitting fees for each Board / Committee Meetings. No stock options were granted to any of the Non-Executive Directors. The Non-Executive Directors were paid ` 35,000/- as sitting fees which is within the limits prescribed under the Companies Act, 2013.

Additional Information pertaining to Directors’ Retiring by Rotation:

At this 93rd AGM, Shri N.Saiprasad, Director is retiring by rotation and being eligible, offers himself for re-appointment and the additional information to be provided to the Shareholders pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 about the retiring director seeking re-election is furnished in the Notice to the members.


99

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ctor

2715

NA14

1NA

54

410

11

91

1Ye

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s1

M/s

. Bhr

amap

utra

Pow

er

Pvt L

tdNi

l

Shri

S.Su

ndar

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agin

g Di

rect

or &

CEO

DIN

0865

5632

(Num

ber o

f Sha

res:

Nil)

(Fro

m 3

1.12

.201

9 as

Ad

ditio

nal D

irect

or &

fro

m 0

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0 as

MD

& CE

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r CR

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NCB

& NP

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nkin

g an

d Ac

coun

tanc

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Di

rect

or4

NANA

51

12

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Parth

asar

athi

M

ukhe

rjee

Man

agin

g Di

rect

or &

CEO

DIN

0244

6180

(Till

31.0

8.20

19)

Maj

ority

- Ba

nkin

gEx

ecut

ive

Dire

ctor

11NA

NA2

1NA

NA1

1NA

11

NANA

1NA

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Shri

Y.N.

Laks

hmin

aray

ana

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thy

DIN

0753

4836

(Num

ber o

f Sha

res:

662

6)

NRCC

BM

ajor

ity -

Agric

ulat

ure

and

Rura

l Eco

nom

y

Non-

Exec

utive

- I

ndep

ende

nt

Dire

ctor

258

47

12

1NA

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1NA

101

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Nil

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Shri

Kusu

ma

R M

unira

juDI

N 02

1119

74(T

ill 19

.06.

2019

)M

ajor

ity -

Law

Non-

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utive

- I

ndep

ende

nt

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ctor

65

NANA

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12

NANA

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Smt.A

nura

dha

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eep

DIN

0029

1763

(Till

01.1

1.20

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Min

ority

- La

w

Prom

oter

G

roup

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n-Ex

ecut

ive

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depe

nden

t Di

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or

156

2NA

21

21

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NANA

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Shri

G.S

udha

kara

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taDI

N 00

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50(N

umbe

r of S

hare

s: 2

666)

Min

ority

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sines

s

Prom

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G

roup

- No

n-Ex

ecut

ive

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In

depe

nden

t Di

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or

254

3NA

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mar

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ertie

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ivate

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ta R

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4. J

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serv

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imite

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Shri

H S

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ath

DIN

0264

8119

(Num

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f Sha

res:

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Maj

ority

- B

ankin

g (P

ract

ical

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rienc

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and

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l Sca

le

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stry

(Spe

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ctor

2514

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51

4NA

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101

NAYe

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/s.R

am R

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pend

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ldin

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3. M

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l Ad

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y Pr

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4. M

/s.O

nlin

e PS

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ans

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of A

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rd

in M

/s.O

nlin

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ans

Lim

ited

Shri

N.Sa

ipra

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DIN

0013

7910

(Num

ber o

f Sha

res:

63

865)

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Min

ority

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Prom

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roup

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n-Ex

ecut

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In

depe

nden

t Di

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271

211

2NA

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100

Nam

e of

the

Dire

ctor

, DI

N &

No. o

f Sha

res

held

by

them

as

on

31.0

3.20

20




Board(27 meetings)























as on 31.03.2020


Committee

Smt.S

upriy

a Pr

akas

h Se

nDI

N 07

9329

37(F

rom

14.

06.2

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till

01.1

0.20

19)

Maj

ority

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form

atio

n Te

chno

logy

&

Fina

nce

Non-

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utive

-In

depe

nden

t Di

rect

or

9NA

NANA

1NA

NA1

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NANA

NANA

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sNA

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NA

Shri

Gor

inka

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anm

ohan

Ra

oDI

N 06

7431

40(N

umbe

r of S

hare

s: N

il)(F

rom

02.

12.2

019)

RMC

Maj

ority

- Ri

sk

Man

agem

ent,

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ent &

Se

ttlem

ent

Syst

ems,

Fi

nanc

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d Ba

nkin

g

Non-

Exec

utive

-In

depe

nden

t Di

rect

or

72

NA1

2NA

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.lndi

a Bu

lls T

rust

ee

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pany

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ited

Nil

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uraj

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DIN

0273

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(Num

ber o

f Sha

res:

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6948

)(F

rom

02.

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019)

Min

ority

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coun

tanc

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- N

on-

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pend

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ctor

7NA

2NA

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NA4

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/s.In

nova

neer

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ltors

Pr

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ahad

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plex

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rinda

van

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e Po

wer

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ti Si

nha

DIN

0287

6853

(Num

ber o

f Sha

res:

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(Fro

m 0

2.12

.201

9)

Maj

ority

- Ec

onom

ics,

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w, F

inan

ce

and

Hum

an

Reso

urce

s

Non-

Exec

utive

-In

depe

nden

t Di

rect

or

6NA

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31

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lNi

lNi

l

Shri

Satis

h Ku

mar

Kal

raDI

N 01

9521

65(N

umbe

r of S

hare

s: N

il)(F

rom

02.

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019)

Maj

ority

- Ba

nkin

g, R

isk

Man

agem

ent,

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Man

agem

ent,

Fina

nce

and

Hum

an

Reso

urce

s

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utive

-In

depe

nden

t Di

rect

or

7NA

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2NA

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M/s

.PNB

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Lim

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List

ed-In

depe

nden

t Dire

ctor

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rman

of R

isk

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agem

ent C

omm

ittee

& IT

St

rate

gy C

omm

ittee

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ber

of A

udit

Com

mitt

ee o

f Boa

rd,

Nom

inat

ion

& Re

mun

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Com

mitt

ee, S

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d Is

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of d

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omm

ittee

in M

/s.

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Smt.

Mee

ta M

akha

nDI

N 07

1351

50(N

umbe

r of S

hare

s: N

il)(F

rom

23.

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Min

ority

- Ba

nkin

g &

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agem

ent

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-In

depe

nden

t Di

rect

or

3NA

NA1

1NA

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NA4

1. M

/s.A

sian

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ls (W

est)

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ed-

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pend

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or2.

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ndo

Serv

ices

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te L

imite

d3.

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nter

prise

s Pr

ivate

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4. M

/s.O

ne F

ile T

echn

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rman

of S

hare

hold

ers

Grie

vanc

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mm

ittee

in M

/s.

Asia

n Ho

tels

(Wes

t) Li

mite

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101

Nam

e of

the

Dire

ctor

, DI

N &

No. o

f Sha

res

held

by

them

as

on

31.0

3.20

20




Board(27 meetings)























as on 31.03.2020


Committee

Shri

Sanj

ay K

umar

Kh

eman

iDI

N 00

0728

12(F

rom

23.

01.2

020

to

18.0

3.20

20)

Min

ority

- Ac

coun

tanc

y &

Fina

nce

Cate

gory

Non-

Exec

utive

-In

depe

nden

t Di

rect

or

2NA

NANA

NANA

NANA

NANA

NANA

NANA

NANA

NANA

NANA

Shri

K R

Prad

eep

DIN

0015

3097

(Num

ber o

f Sh

ares

:673

0378

)(F

rom

23.

01.2

020)

Min

ority

- Ac

coun

tanc

y &

Law

Prom

oter

- N

on-

Exec

utive

- N

on

Inde

pend

ent

Dire

ctor

1NA

NANA

NA1

NANA

NANA

NANA

NANA

NANA

NA10

1. M

/s. P

rana

va E

lect

roni

cs

Priva

te L

td.

2. M

/s. K

are

Elec

troni

cs

and

Deve

lopm

ent

Priva

te L

imite

d. 3

. M/s

. Kar

e Po

wer

Reso

urce

s Pr

ivate

Ltd

4. M

/s. B

rinda

van

Hydr

opow

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vt L

td 5

. M/s

. Pra

nava

City

Co

mpl

ex P

rivat

e Li

mite

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. Inn

ovan

eer R

ealto

rs

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te L

imite

d 7

. M/s

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nava

DM

CC 8

. M/s

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on E

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ch a

nd

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ices

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td.

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/s. C

eles

tial T

echs

oft

and

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10. M

/s. S

oni E

xim P

rivat

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mite

d

Nil

Shri

Suve

ndu

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DIN

0745

2701

(Till

17.1

1.20

19)

NARB

I Add

itiona

l Di

rect

or14

12NA

NANA

NANA

NANA

NANA

NANA

NANA

NoNo

NANA

NA

Shri

Rajn

ish K

umar

(DIN

078

3324

1)(N

o. o

f Sha

res:

Nil)

NARB

I Add

itiona

l Di

rect

or21

13NA

NANA

NANA

NANA

NANA

NANA

NANA

NoNo

Nil

Nil

Nil

Shri

Sund

aram

Sha

nkar

(DIN

086

3336

7)(N

o. o

f Sha

res:

Nil)

(Fro

m 1

8.11

.201

9)

NARB

I Add

itiona

l Di

rect

or6

2NA

NANA

NANA

NANA

NANA

NANA

NANA

NANA

Nil

Nil

Nil


102

ATTENDANCE AT AUDIT COMMITTEE MEETINGS FOR THE FY 2019-2020

Name of the Committee Members

(Sarvashree / Smt.)Category of Director

Meeting detailsWhether

attended last AGM (Y/N)

Whether attended

EGM (Y/N)

Held during the tenure of director /

inviteeAttended

% of total

B.K.Manjunath - Chairman of the Committee

Non Executive Chairman / Independent 15 15 100% YES YES

Y.N.Lakshminarayana Murthy Non - Executive Director / Independent 8 8 100% YES NO

G.Sudhakara Gupta Non - Executive Director / Non Independent 5 4 80% YES YES

H.S.Upendra Kamath Non - Executive Director / Independent 15 14 93% YES YES

N.Saiprasad Non - Executive Director / Non Independent 2 1 50% YES YES

Gorinka Jaganmohan Rao Non - Executive Director / Independent 2 2 100% NA NA

Rajnish Kumar - RBI Additional Director

Non - Executive - Nominee 15 13 87% NO NO

Sundaram Shankar - RBI Additional Director

Non - Executive - Nominee 2 2 100% NA NA

Kusuma R Muniraju Non - Executive Director / Independent 5 5 100% NA NO

Anuradha Pradeep Non - Executive Director / Non Independent 6 6 100% YES NO

Suvendu Pati - RBI Additional Director

Non - Executive - Nominee 13 12 92% NO NO

ATTENDANCE AT NOMINATION, REMUNERATION & COMPENSATION COMMITTEE MEETINGS FOR THE FY 2019-2020

Name of the Committee Members

(Sarvashree / Smt.)

Category of Director

Meeting details

Attended % of totalHeld during the tenure of director /

invitee

B.K.Manjunath - Chairman of the Committee

Non Executive Chairman / Independent 10 10 100%

Y.N.Lakshminarayanamurthy Non Executive Director / Independent 11 11 100%

N.Saiprasad Non Executive Director /Non- Independent 6 6 100%

Gorinka Jaganmohan Rao Non Executive Director / Independent 1 1 100%

Raghuraj Gujjar Non Executive Director / Non-Independent 4 4 100%

Kusuma R Muniraju Non Executive Director / Independent 2 2 100%

Anuradha Pradeep Non Executive Director / Non -Independent 5 5 100%

STAKEHOLDER'S RELATIONSHIP COMMITTEE FOR THE FY 2019-2020Name of the Non Executive Director heading the Committee Shri N.Saiprasad

Non Executive Director / Non Independent

Name and designation of Compliance Offi cer Shri N.RamanathanCompany Secretary & Compliance Offi cer

Number of shareholders' complaints received so far 1

Number not solved to the satisfaction of shareholders Nil

Number of pending complaints Nil


103

INFORMATION ABOUT SHARE TRANSFER WORK TO A DELEGATED AUTHORITY

Description of delegated authority

Full Address of delegated authorityTelephone Numbers

Fax Numbers E-Mail ID

Name and designation of offi cer of the Company

Shri N.RamanathanCompany Secretary & Compliance Offi cerThe Lakshmi Vilas Bank LimitedCorporate Offi ce, "LVB House" No.4, Sardar Patel Road,Guindy, Chennai - 600 032

044 - 22205306 044 -22205317 [email protected]

Name of Board Committeeand Chairman's Name

Stakeholders Relationship CommitteeShri N.Saiprasad The Lakshmi Vilas Bank LimitedCorporate Offi ce, "LVB House" No.4, Sardar Patel Road,Guindy, Chennai - 600 032

044 - 22205306 044 -22205317 [email protected]

The Registrar and ShareTransfer Agents

M/s.Integrated Registry Management Services Private Limited,II Floor, "Kences Towers"No.1, Ramakrishna Street,North Usman Road,T.Nagar, Chennai - 600 017

044 - 281408012814080228140803

044- 28142479 28143378

[email protected]


104

Annexure - D

GENERAL SHAREHOLDERS’ INFORMATION

Means of Communication:

The Bank published its quarterly and annual fi nancial results in English language in "Business Standard" (All India Edition) newspaper and in vernacular language in "Dinamani" (Trichy Edition) newspaper. The results are displayed on the Bank's website atwww.lvbank.com. The offi cial news releases and the presentations made to the institutional investors or to the analysts are also displayed in the website.

Management discussions and analysis forms part of the Annual Report, which has been sent to the shareholders of the Bank.

Financial Year - 1st April, 2019 to 31st March, 2020

93rdAnnual General Meeting:

Date & Time: 25th September, 2020 at 11.00 a.m.

Venue: Meeting will be held through Video Conferencing

Details of last three Annual General Meetings held and Special Resolutions passed thereat are as below:

S.No. of AGM

Financial Year

Day, Date, Time & Venue

Special Resolutions passed in the previous three Annual General Meetings

90 2016-2017 Tuesday, 18th July, 2017 at 10.00 a.m at Registered Offi ce, Karur.

• Item No.12 – Raising of capital through QIP, GDR, ADR etc.

• Item No.13 – Approval for borrowing / raising funds in Indian / foreign currency by issue of debt securities upto ` 250.00 crores to eligible investors on private placement basis.

• Item No. 14 – ESOP 2017 scheme approval.

91 2017-2018 Wednesday, 8th August, 2018 at 10.00 a.m at Registered Offi ce, Karur.

• Item No. 07 – Raising of capital through QIP, GDR, ADR etc.

• Item No. 08 – Approval for borrowing / raising funds in Indian / foreign currency by issue of debt securities to eligible investors on private placement basis.

92 2018-2019 Friday, 27th September, 2019 at 10.00 a.m at Registered Offi ce, Karur.

• Item No. 08 – Raising of capital through QIP, GDR, ADR etc.

• Item No. 09 – Approval for borrowing / raising funds in Indian / foreign currency by issue of debt securities to eligible investors on private placement basis.

Postal Ballot

During the last fi nancial year ending 31.03.2020, no postal ballot was conducted. As on date, there is no proposal requiring approval of the members through special resolution to be passed through postal ballot.

Annual General Meeting for FY 2020-21 will be held on or before 30th September, 2021 in line with the provisions under the Companies Act.

Board Meetings:

Results for the quarter ending June 2020 - On or before 14th August, 2020 (Results already published on 30th July 2020).

Results for the quarter ending September 2020 - On or before 14th November, 2020.

Results for the quarter ending December 2020 - On or before 14th February, 2021.

Results for the quarter ending March 2021 - On or before 30th May, 2021.


105

Compliance with Regulation 34(3) & Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

Name, Address and Stock Code of the Stock Exchanges where the securities of the Lakshmi Vilas Bank Limited are listed are as below:

NAME AND ADDRESS OF THE STOCK EXCHANGE STOCK CODE

The National Stock Exchange of India Limited (Equity Shares and Tier II Bonds) Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra - Kurla Complex, Bandra (E), Mumbai - 400 051

LAKSHVILAS

The BSE Limited (Equity Shares) Floor 25, PJ Towers, Dalal Street, Mumbai - 400 001 534690

Bank confi rms that the applicable Annual Listing Fees has been paid to the above mentioned stock exchanges.

Stock Market Data

Listed with NSE on 21.06.2000

Month High Low No. of Shares Traded

April 2019 97.40 75.25 97113250

May 2019 83.35 70.00 24785543

June 2019 75.65 53.70 37869060

July 2019 73.90 45.75 34715651

August 2019 49.20 36.50 39384483

September 2019 41.90 34.70 31009154

October 2019 33.00 13.35 67380706

November 2019 22.10 16.15 73831324

December 2019 21.50 17.15 22948118

January 2020 17.75 15.00 14236354

February 2020 21.75 14.30 20988843

March 2020 16.40 10.40 31485954

Listed with BSE on 24.09.2012

Month High Low No. of Shares Traded

April 2019 97.35 75.65 11733009

May 2019 83.50 68.35 10137449

June 2019 76.00 53.90 3293404

July 2019 73.75 46.00 1710876

August 2019 49.45 36.85 3598806

September 2019 41.85 34.75 12212391

October 2019 33.05 13.35 14401583

November 2019 22.10 16.20 11470933

December 2019 21.50 17.10 2146540

January 2020 17.75 15.10 2364906

February 2020 21.90 14.40 3819827

March 2020 16.45 10.45 3710127


106

Performance of the Equity Shares relating to NSE Nifty Index during the year 2019-20

Performance of the Equity Shares relating to BSE Index during the year 2019-20

The Registrar and Share Transfer Agent is M/s. Integrated Registry Management Services Private Limited.

Share Transfer Process:

All requests pertaining to shares held in physical form are processed by the Registrar and Share Transfer Agent of the Bank -M/s. Integrated Registry Management Services Private Limited and approved by the Company Secretary, being vested with the authority by the Board of Directors of the Bank and the certifi cates are dispatched to the transferees within a maximum period of 15 days from the date of receipt of the transfer documents by M/s. Integrated Registry Management Services Private Limited, provided if the share

0

2000

4000

6000

8000

10000

12000

14000

0

20

40

60

80

100

120

LVB NIFTY

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

0

20

40

60

80

100

120

LVB SENSEX


107

documents are valid in all respects. Share transfers, dividend payments, demat requests and all other investor related activities are attended to and processed at the offi ce of our Registrar and Share Transfer Agent. In compliance with Regulation 40 (9) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a half-yearly compliance certifi cate from a Company Secretary in Practice is obtained, which is also fi led with the Stock Exchanges.

Further, the shareholders may note that SEBI vide its circular dated April 20, 2018 and notifi cation dated June 08, 2018 had emphasized on dematerialization of shares, in cases where shares of a listed entity, have been held in physical mode. Therefore, for their own safety and interests, the shareholders who hold shares in physical form are requested to get their physical shares dematerialised by making application to depository participants.

Shareholders' Correspondence should be addressed to:

M/s. Integrated Registry Management Services Private LimitedII Floor, "Kences Towers", No.1 Ramakrishna StreetNorth Usman Road, T. Nagar, Chennai - 600 017Ph: 044-28140801/2/3 Fax: 044-28142479E-mail: [email protected]

Contact details of Debenture Trustees of the Bank for Tier-II Bonds (Debentures):

The Bank has raised capital by way of Tier II Bonds (debentures) through various Series during certain fi nancial years and the same are listed with the WDM segment of the NSE. The details of the debenture trustee for all the series of Tier II Bonds is as below:

IDBI Trusteeship Services LimitedRegd. Offi ce: Asian Building, Ground Floor,17, R. Kamani Marg, Ballard Estate, Mumbai - 400 001.Phone: 022-40807012 / 7000 | Fax: 022-66311776 | E-mail: [email protected]

Details of Credit Rating assigned by Rating Agencies and any revision thereto for the Unsecured Redeemable Non-Convertible Subordinated Lower Tier-II Bonds in the nature of Debentures issued by the Bank:

Outstanding Series & ISIN

Current Rating Rating Revisions during the year 2019-2020

Series – VII B INE694C08047

Brickwork Rating: “BWR BB+” (BWR Double B Plus) (Credit watch with Developing Implications).

CARE Rat ing: “CARE BB+; Negative” (Double B Plus; Outlook: Negative).

• Revised from “BWR BBB-” (Credit Watch with Developing Implications) to “BWR BB+” (Credit Watch with Developing Implications) on 09.10.2019.

• Revised from ‘’CARE BBB’’ (Triple B; Credit Watch with negative implications) to ‘’CARE BBB’’ (Triple B; Credit Watch with developing implications) on 12.04.2019.

• Revised from ‘’CARE BBB’’ (Triple B) (Credit Watch with developing implications) to ‘’CARE BBB-’’ (Triple B Minus) (Credit Watch with developing implications) on 10.09.2019.

• Revised from “CARE BBB-“(Triple B Minus) (Credit Watch with developing implications) to “CARE BB+; Negative” (Double B Plus; Outlook: Negative) on 11.10.2019.

Series – VIIIINE694C08054

CARE Rat ing: “CARE BB+; Negative” (Double B Plus; Outlook: Negative).

• Revised from ‘’CARE BBB’’ (Triple B; Credit Watch with negative implications) to ‘’CARE BBB’’ (Triple B; Credit Watch with developing implications) on 12.04.2019.

• Revised from ‘’CARE BBB’’ (Triple B) (Credit Watch with developing implications) to ‘’CARE BBB-’’ (Triple B Minus) (Credit Watch with developing implications) on 10.09.2019.

• Revised from “CARE BBB-“ (Triple B Minus) (Credit Watch with developing implications) to “CARE BB+; Negative” (Double B Plus; Outlook: Negative) on 11.10.2019.

Series – IXINE694C08062

Series – XINE694C08070


108

Compliance with Regulation 6 (2) (d) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

SEBI has advised the listed companies to designate an exclusive email ID for redressal of Investor Complaints under Regulation 6(2)(d) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, an exclusive and separate e-mail id “[email protected]” has been designated for redressal of investors' complaints and the Compliance Offi cer monitors the same.

Distribution of Shareholding under different category as on 31.03.2020 is given below:

Category Number of Records % Number of Shares %

Upto 500 65280 69.59 9583616 2.85

501 - 1000 11053 11.78 8627346 2.56

1001 - 2000 7235 7.71 10765258 3.20

2001 - 3000 3154 3.36 7957667 2.36

3001 - 4000 1495 1.59 5287786 1.57

4001 - 5000 1252 1.33 5806843 1.72

5001 - 10000 2282 2.43 16508014 4.90

ABOVE 10001 2057 2.19 272177221 80.83

TOTAL 93808 100.00 336713751 100.00

Dematerialization:

Bank has 93808 shareholders as on 31.03.2020, being fully paid shares of ` 10/- each. Of this 80580 folios representing 33,02,86,983 (98.09%) shares are held in Demat Form.

Bank's Equity shares ISIN: INE694C01018

The shares of the Bank are admitted under demat mode with both the depositories viz., National Securities Depository Limited and Central Depository Services (India) Limited.

Nomination Facility:

Shareholders who hold shares in physical form may avail of the Nomination Facility at any time by submitting Nomination Form in Form No.SH – 13 as prescribed under Section 72 of the Companies Act, 2013. While the Form is available in the MCA website, the form may also be obtained from our Registrar & Share Transfer Agent M/s. Integrated Registry Management Services Private Limited. The duly fi lled in form should be submitted to our Registrar & Share Transfer Agent for registering the nomination.

Shareholders holding shares in electronic form are requested to contact their Depository Participants directly for recording their nomination.

Bank Account Details:

In order to avoid fraudulent encashment of dividend warrants, the members holding shares in physical form are requested to provide their Bank Account details to our Registrar and Share Transfer Agent in order to credit the applicable dividend to their concerned account.

Unclaimed Dividend / Refund:

As per Section 124(5) read with Section 125 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), as amended, the dividends which were unclaimed for a period of seven years or more have to be transferred to "Investor Education and Protection Fund" ('IEPF Fund') maintained with Central Government. In compliance with the same, the Bank had transferred the unclaimed dividend amount pertaining to the year 2011-12 amounting to ̀ 43,14,453.50 to the Investors Education and Protection Fund and the unclaimed dividend pertaining to the year 2012-13 will be transferred to the IEPF Fund after the due date.

As per Section 124 (6), read with the IEPF Rules, the Bank is also required to transfer the related equity shares in respect of which dividends are not claimed for the last 7 consecutive years for credit to IEPF Suspense account in Dematerialized form. In line with the applicable proviso, during the year, the Bank has already transferred 62354 shares pertaining to the unclaimed dividend for the years 2011-2012 to the IEPF Authority. The details of the unclaimed dividend are uploaded in the website of Investor Education and Protection Fund and in the website of the Bank and the shareholders may verify their details from the said websites and approach us for claim.


109

As per the IEPF Rules, any person whose shares, unclaimed dividend, unclaimed refund has been transferred to the IEPF fund, may claim the shares under Section 124(6) or apply for refund under Section 125(3) (a), to the authority by submitting an online application in Form IEPF 5 available on the website www.iepf.gov.in. The Bank has also appointed a nodal offi cer and a deputy nodal offi cer for the purpose of coordination with IEPF authority. The contact information of the offi cers are as below and the same has also been made available online as per the IEPF Rules and can be accessed at https://www.lvbank.com/shareholder-info.aspx

Contact Information of Nodal Offi cer for IEPF Authority:

N. Ramanathan, Company Secretary,Secretarial Department, The Lakshmi Vilas Bank Ltd., Corporate Offi ce, LVB House, No.4, Sardar PatelRoad, Guindy, Chennai - 600 032

Phone No. 044-22205306

E-mail ID: [email protected]

Contact Information of Deputy Nodal Offi cer for IEPF Authority:

M.Ramesh, Senior Manager – Secretarial DepartmentThe Lakshmi Vilas Bank LimitedCorporate Offi ce, LVB House, No.4, Sardar Patel Road,Guindy, Chennai – 600 032Phone No. 044-22205306E-mail ID: [email protected]

Disclosure under INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Details of the transfer/s to the IEPF made during the year as mentioned below:

Amount of unclaimed/unpaid dividend and the corresponding shares; Details given elsewhere in the report

Redemption amount of preference shares; Not Applicable

Amount of matured deposits, for companies other than banking companies, along with interest accrued thereon

Not Applicable

Amount of matured debentures along with interest accrued thereon Not Applicable

Application money received for allotment of any securities and due for refund along with interest accrued;

Not Applicable

Sale proceeds of fractional shares arising out of issuance of bonus shares, merger and amalgamation;

Not Applicable

Details of the resultant benefi ts arising out of shares already transferred to the IEPF Not Applicable

The amount of donation, if any, given by the company to the IEPF Nil

Such other amounts transferred to the IEPF, if any, during the year Nil

Information in respect of Unclaimed Dividend & Refund and last date for making claim is given below:

Unclaimed Dividend:

Financial Year Date of DeclarationAmount as on 31.03.2020 in `

Number of Shares Last date for claim

2012-13 06.08.2013 46,34,979.00 7248 04.09.20202013-14 26.09.2014 18,82,083.00 8510 25.10.20212014-15 03.09.2015 39,43,412.00 8016 02.10.20222015-16 10.06.2016 56,84,112.00 8111 09.07.20232016-17 18.07.2017 53,09,811.90 8227 16.08.20242017-18 08.08.2018 Dividend was not declared for the year2018-19 27.09.2019 Dividend was not declared for the year

Unclaimed Refund:

Rights Issue Year Date of RefundAmount

as on 31.03.2020 in `Last date for claim

2014-15 02.09.2014 1,07,700.00 01.09.20212017-18 04.01.2018 4,40,176.00 03.01.2025


110

Shares lying in Unclaimed Suspense Account:

ParticularsRecords / No. of

shareholdersShares

Opening Balance as on April 1, 2019 18 12235

Add: Transfer during the year 2019-20 0 0

Less: Claims received and shares transferred * 0 0

Less: Shares transferred to IEPF account 0 0

Closing Balance as on March 31, 2020 ** 18 12235

* Number of shareholders who approached the Bank for the transfer of shares from the suspense account.** Voting rights on these shares shall remain frozen till the rightful owners of such shares claim these shares.

Shares held in Electronic form:

All instructions regarding bank account details, which the shareholders wish to be incorporated in their dividend warrant will have to be submitted to their depository participants. Instructions already given by them in respect of shares held in physical form will not be automatically applicable to the dividend paid on shares held in electronic form and the Bank or Share Transfer Agent (STA) will not entertain any request for deletion / change of Bank details already printed on dividend warrants. Only those Bank account details as per information received from the depositories will be considered.

All instructions regarding change of address, nomination, power of attorney etc., shall be given directly to their depository participants and the Bank or STA will not entertain any such requests at their end. Shareholders having their shareholdings partly in demat form and partly in physical form, should follow the steps narrated above separately.

Other Disclosures:

Certifi cate on Corporate Governance:

The Bank has complied with conditions of corporate governance prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A Certifi cate to this effect from Practising Company Secretary is available in another part in this Annual report.

Mandatory requirements and adoption of non–mandatory requirements:

The Bank complies with all the mandatory requirements with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and amendments thereon.

With respect to compliance with Discretionary Requirements as mentioned in Part E of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Bank is in compliance with the following;

1. Being a banking entity, as mandated by Reserve Bank of India's directive, the Bank appoints separate persons to the post of Chairperson and Managing Director & CEO.

2. Apart from internal direct reporting to the appropriate authority, the Internal Auditor also has a lateral reporting line to Audit Committee of the Board.

Certifi cate under Regulation 34 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

Certifi cate from Practicing Company Secretary pursuant to Regulation 34 (3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 that none of the directors on the Board of the company have been debarred or disqualifi ed from being appointed or continuing as directors of companies by the Board / Ministry of Corporate Affairs or any such statutory authority is available in another part in this Annual report.

Disclosures on materially signifi cant Related Party Transactions:

During the fi nancial year, the Bank did not enter into any materially signifi cant related party transaction which could have a potential confl ict of interest with its promoters, directors, management or relatives etc., except the transactions entered into in the normal course of banking business.

The Bank's policy on dealing with related party transaction is provided in the website of the Bank and can be viewed at: https://www.lvbank.com/policies.aspx


111

Commodity Price Risk or Foreign Exchange Risk and Hedging Activities

The details with respect to commodity price risk in terms of SEBI circular no. EBI/HO/CFD/CMD1/CIR/P/2018/0000000141 dated 15th November 2018 is as follows:

1. Risk management policy of the listed entity with respect to commodities including through hedging (Such policy shall take into account total exposure of the entity towards commodities, commodity risks faced by the entity, hedged exposures, etc. as specifi ed below)

2. Exposure of the listed entity to commodity and commodity risks faced by the entity throughout the year:

a. Total exposure of the listed entity to commodities in INR

b. Exposure of the listed entity to various commodities:

Commodity Name

Exposure in INR towards the particular commodity

Exposure in Quantity terms

towards the particular

commodity

% of such exposure hedged through commodity derivatives

Domestic market International market

Total

OTC Exchange OTC Exchange

NIL

c. Commodity risks faced by the listed entity during the year and how they have been managed. - Not Applicable

Penalties or Strictures imposed on matters related to capital markets:

There are no penalties or strictures imposed on the Bank by Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.

There were no signifi cant and material orders passed by the regulators, courts, tribunals impacting the going concern status and Bank's operations in future.

The Bank has not issued any ADR or GDR during the FY of the Annual Report or any earlier FYs. The bank’s equity shares or debt securities have not been suspended from trading by any of the Stock Exchanges.

Fees paid to Statutory Auditors:

The total fees for all services paid by the Bank to the Statutory Auditor (no other entities related to the Bank) is provided herein below:

ParticularsAmount in `

(inclusive of GST)

Quarterly review of accounts 8,26,000

Annual Central Audit fee 21,24,000

LFAR Fee 1,77,000

Tax Audit Fee 3,54,000

Fee for branches allotted 13,67,620

Certifi cation fee for Amalgamation 2,95,000

GST Annual Certifi cation fee 5,90,000

Other Certifi cation fee 2,360

Out of pocket expenses 4,49,447

Total 61,85,427

Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

Details of the number of complaints received, disposed and pending during the year 2019-20 pertaining to sexual harassment of women at workplace, are provided in this report in another part.


112

Details of utilization of funds raised through preferential allotment or qualifi ed institutions placement as specifi ed under Regulation 32 (7A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

The Bank has utilized the funds raised through Preferential Allotment during FY 2019-20 for the purposes as mentioned in the notice of the Extra Ordinary General Meeting held on May 20, 2019, wherein the shareholders had approved the raising of funds. There was no Qualifi ed Institutions Placement made during the year under review.

Whistle Blower Policy:

The Bank has laid down a Whistle Blower Policy, in line with the regulatory requirements which is available in our Bank’s website at https://www.lvbank.com/policies.aspx. During the year, no person has been denied access to the Audit Committee of the Board.

CEO / CFO Certifi cation:

The Compliance certifi cate under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 furnished by the Chief Executive Offi cer and Chief Financial Offi cer has been duly submitted to the Board.

Code of Conduct:

The Board of Directors at its meeting held on 15.04.2005, approved the Code of Conduct for all the Directors and Senior Management Personnel, which is available in our Bank’s website at https://www.lvbank.com/code-of-conduct.aspx. This Annual Report contains a declaration signed by the CEO affi rming compliance to the Code of Conduct by Directors and Senior Management Personnel.

DECLARATION BY MD & CEO:

The Board of Directors and the Senior Management Personnel of the Bank have affi rmed confi rming to the Code of Conduct of the Bank for the year ended 31.03.2020.

S SundarManaging Director & CEO (Interim)


113

ANNUAL REPORT ON CSR ACTIVITIES

Annexure - E

In India, the concept of CSR is governed by clause 135 of the Companies Act, 2013. The Ministry of Corporate Affairs has notifi ed Section 135 and Schedule VII of the Companies Act 2013 as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 to come into effect from April 1, 2014. The Act defi nes CSR as activities that promote poverty reduction, education, health, environmental sustainability, gender equality, and vocational skills development.

Vision & Mission

Through the CSR projects, our bank intends to contribute in its own small way to the social and economic upliftment of needy individuals / areas, mostly in the places in which it operates.

Scope

CSR policy will apply to all projects / programs undertaken as part of the Bank’s Corporate Social Responsibility activities. It will be developed, reviewed and updated by reference to relevant codes of Corporate Governance and International standards (or) best practices while keeping it always in line with the CSR Rules (Sec. 135 of Companies Act 2013)

Preferred CSR intervention areas

The CSR intervention areas will be as prescribed under Section 135 of the Companies Act as amended from time to time with the preferred scope being as below:

a) Promoting Education

b) Promoting Rural Sports

c) Setting up old age homes

d) Catering to needs of needy and downtrodden section of society

e) Participation in “Swachh Bharat Abhiyan” of Government of India

f) Focus on the developmental needs of Girl Children

g) Meeting infrastructural requirements of needy Government / Semi-Government educational institutions

h) Any other area approved by CSR committee

The Bank’s CSR policy is available on the website www.lvbank.com/download/Corporate_Social_Responsibility_policy.pdf

Composition of CSR Committee

The Bank has a Board-Level CSR committee that provides oversight of CSR policy execution. Our CSR committee comprises:

Shri B.K.Manjunath, Chairman of the Committee

Shri S.Sundar, MD & CEO, Member

Shri Shakti Sinha, Member

Financial details

Section 135 of the Companies Act, 2013 and Rules made thereunder prescribe that every company having a net worth of ` 500 crore or more, or turnover of ̀ 1,000 crore or more or a net profi t of ̀ 5 crore or more during any fi nancial year shall ensure that the company spends, in every fi nancial year, at least 2% of the average net profi ts made during the three immediately preceding fi nancial years, in pursuance of its Corporate Social Responsibility Policy. The fi nancial details as sought by the Companies Act, 2013 are as follows:

Average Net profi t of the Bank for last three fi nancial years ` 12669.07 Lacs

Prescribed CSR expenditure (2% of Average Net profi t) for FY 2019-20 ` 253.38 Lacs

Amount to be spent for the current fi scal ` 253.38 Lacs


114

Amount unspent in the last fi nancial year upto (2018-19) ` 1360.44 Lacs

Total amount to be spent for the fi nancial year ` 1613.82 Lacs

Amount spent during the current fi scal ` 20.23 Lacs

Amount unspent for FY 2019-20 ` 1593.59 Lacs

CSR activities undertaken by your Bank are as under

(Amount in Lacs)

(1) (2) (3) (4) (5) (6) (7) (8)

S. No.

CSR project (or) activity identifi ed

Sector in which the project is covered

Projects or programs (1) Local area or other (2) Specify the state and district where projects or programs were undertaken

Amount outlay (budget) projects or programs wise

Amount spent on the projects or programs Sub-heads (1)Direct expenditure on projects or programs (2)Overheads

Cumulative expenditure upto to the reporting period

Amount spent: Direct or through implementing agency*

1. Promoting Education

Promotion of Education

Bangalore & Karur 14.40 + app. taxes

15.20(inclusive of taxes)

15.20 Direct – 4.53 Implementing agency – 10.66

2. Health Care Health Care Karur 5.00 + app. taxes

5.00(inclusive of taxes)

5.00 Direct – 5.00

3. Contribution to the Prime Minister's National Relief Fund or any other fund setup by the Central Government or the State Governments for socio-economic development and relief and funds

BharatKeVeer Corpus Fund

NA 0.03 + app. taxes

0.03 (inclusive of taxes)

0.03 Direct – 0.03

Amount Spent (`) 20.23

* Details of the implementing agencies are listed below:

Promoting Education: Vidyashilp Community Trust and Karnataka Arya Vysya Charitable Trust

Your Bank has done all the preliminary work like identifi cation of priority areas, checking the due diligence etc. so that amount can be spent on CSR activities as per statutory requirements. Further, the bank has decided to set up a foundation named as “LVB Foundation” for carrying out the CSR related activities in a full-fl edged manner.

Our CSR responsibilities

We hereby affi rm that the CSR policy, as approved by the Board, has been implemented and the CSR committee monitors the implementation of the CSR projects and activities in compliance with our CSR objectives.

S.Sundar B.K.Manjunath MD & CEO Chairperson - CSR committee


115

Annexure - F

Particulars pursuant to Section 197(12) of the Companies Act, 2013 and Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Sl. No Particulars Disclosure

1. The ratio of remuneration of each director to the median employees remuneration of the Company for the fi nancial year (FY)

MD&CEO: MEDIAN 5.29:1

2. The percentage increase in remuneration of each Director, Chief Financial Offi cer, Chief Executive Offi cer, Company Secretary in the FY

Mr. Parthasarathi Mukherjee, MD & CEO: NIL

Mr. Sundar.S, CFO: NIL

Mr. Sundar.S, MD & CEO: NIL

Mr. Ramanathan.N, CS: 21.93%

3. The percentage increase in the median remuneration of employees in the fi nancial year

9.32%

4. The number of permanent employees on the rolls of company 4349

5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last fi nancial year and its comparison with the percentile increase in the managerial remuneration and justifi cation thereof.

The average percentage increase made in the salaries of total employees excluding Managerial Personnel for the FY 2019-20 is around 4.30% and the average percentage increased in the remuneration of the Managerial Personnel is around 27.50%.

6. Affi rmation that the remuneration is as per the remuneration policy of the Bank.

The remuneration paid is as per the remuneration policy of the bank.


116

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118

ANNEXURE – G

ENPLOYEE STOCK OPTION SCHEMES (ESOSs)

Disclosure Pursuant to the provisions of the Securities and Exchange Board of India(Share Based Employee Benefi ts) Regulations, 2014

A. Relevant Disclosures in terms of the ‘Guidance Note on accounting for employee share-based payments’ issued by ICAI has been made in Notes to Accounts attached to the Annual Report.

B. Diluted EPS on issue of shares pursuant to the Schemes

Diluted earnings per share pursuant to the issue of share on exercise of options calculated in accordance with AS - 20, "Earnings Per Share"

Diluted earnings per share of the company calculated after considering the effect of potential equity shares arising on account of exercise of options is ` (25.16)

The details of stock options as on 31st March 2020 under the Employee Stock Option Scheme 2010 and Employee Stock Option Scheme 2017 (“ESOS 2010 & ESOS 2017”):

Scheme Specifi c Disclosures

i) General Disclosures:

Description of each ESOS that existed at any time during the year, including the general terms and conditions of each ESOS –

Sr. No.

Particulars ESOS 2010 ESOS 2017

1 General Information The Employee Stock Option Scheme of the Bank known as LVB ESOS 2010 was formulated as per Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. The scheme was approved by the shareholders to create, issue, grant / allot to the eligible present and future employees including Directors of the Bank which entitles the option holders to subscribe to 1 (one) equity share of the Bank of ` 10/- each and in aggregate 50,00,000 equity shares of the face value of ` 10/- at such price, in such manner, during such period and on such terms and conditions and in the manner as may be determined by the Board.

The Employee Stock Option Scheme of the Bank known as LVB ESOS 2017 was formulated as per The Securities and Exchange Board of India (Share Based Employee Benefi ts) Regulations, 2014. The scheme was approved by the shareholders to create, issue, grant / allot to the eligible present and future employees including Directors of the Bank which entitles the option holders to subscribe to 1 (one) equity share of the Bank of ` 10/- each and in aggregate 50,00,000 equity shares of the face value of ` 10/- at such price, in such manner, during such period and on such terms and conditions and in the manner as may be determined by the Board in accordance with the provisions of the applicable laws and the provisions of ESOS 2017.

2 Date of shareholder’s approval August 04, 2010 July 18, 2017

3 Total number of options approved under ESOS

50,00,000 50,00,000

4 Vesting requirements Options granted under LVB ESOS 2010 would vest not less than one year and not more than three years from the date of grant of such options

Options granted under LVB ESOS 2017 would vest not less than one year and not more than three years from the date of grant of such options

5 Exercise price or pricing formula The exercise price shall be the Market price of the equity shares discounted by such percentage not exceeding 50% as determined by the Nomination, Remunerat ion and Compensation Committee of the Board.

The exercise price shall be the Market price of the equity shares discounted by such percentage not exceeding 50% as determined by the Nomination, Remunerat ion and Compensation Committee of the Board


119

Sr. No.

Particulars ESOS 2010 ESOS 2017

6 Maximum term of options granted 5 years from the date of vesting 5 years from the date of vesting

7 Source of shares (primary, secondary or combination)

Primary Primary

8 Variation in terms of options No Variation in terms of options No Variation in terms of options

9 Method used for accounting of ESOS (Intrinsic or fair value)

Intrinsic Value method Intrinsic Value method

10 Weighted average exercise price of the options whose:

• exercise price equals market price

• exercise price exceeds market price

• exercise price is less than market price

No options granted during the year 2019-20


11 Weighted average fair value of the options whose:

• exercise price equals market price

• exercise price exceeds market price

• exercise price is less than market price



A Summary of Status of ESOPs Granted

The position of the existing schemes is summarized as under -

Particulars ESOS 2010

1 Date of Shareholder's Approval 04/08/2010

2 Total Number of Options approved under ESOPs 50,00,000

3 Vesting requirementOptions granted under LVB ESOS 2010 would vest not less than one year and not more than three years from the date of grant of such options

4 Exercise Price or Pricing Formula

The exercise price shall be the Market price of the equity shares discounted by such percentage not exceeding 50% as determined by the Compensation Committee of the Board

5 Maximum term of Options granted 5 years from date of grant

6 Source of shares Primary

7 Variation in terms of ESOP No Variation in terms of options

8 Method used to account for ESOP Intrinsic Value Method


120

B The stock-based compensation cost calculated as per the intrinsic value method for the fi nancial year 2019-20 is ` 41,29,127. If the stock-based compensation cost was calculated as per the fair value method, the total cost to be recognised in the fi nancial statements for the year 2019-20 would be ̀ 11,92,153. The effect of adopting the fair value method on the net income and earnings per share is presented below:

C Pro Forma Adjusted Net Income and Earning Per Share

Particulars `

Net Income As Reported (8,360,446,881)

Add: Intrinsic Value Compensation Cost 4,129,127

Less: Fair Value Compensation Cost 1,192,153

Adjusted Pro Forma Net Income (8,357,509,907)

Earning Per Share: Basic

As Reported (25.16)

Adjusted Pro Forma (25.17)

Earning Per Share: Diluted

As Reported (25.16)

Adjusted Pro Forma (25.17)

D Option Movement during the year 2019-20

Sr. No.

Particulars Numbers Wt. Avg

Exercise price Remaining

Contratual life

1 Options outstanding at the beginning of the year 1,863,878 55.36 4.53

2 Number of options granted during the year - NA

3 Options Forfeited / Surrendered during the year 949,167 39.26

4 Options Vested during the year 395,396 72.08

5 Options Exercised during the year 10,521 72.00

6 Options Lapsed during the year - NA

7 Total number of shares arising as a result of exercise of options 10,521 NA

8 Money realised by exercise of options 757,512.00 NA

9 Options outstanding at the end of the year 904,190 72.07 3.68

10 Options exercisable at the end of the year 904,190 72.07 3.68

Option Movement during the year 2018-19

Sr. No

Particulars Numbers Wt. Avg

Exercise price Remaining

Contratual life

1 Options outstanding at the beginning of the year 2,219,431 57.76 5.47

2 Number of options granted during the year - -

3 Options Forfeited / Surrendered during the year 274,779 69.82

4 Options Vested during the year 831,604 50.68

5 Options Exercised during the year 78,149 72.00

6 Options Lapsed during the year 2,625 72.00

7 Total number of shares arising as a result of exercise of options 78,149 -

8 Money realised by exercise of options 5,626,728.00 -

9 Options outstanding at the end of the year 1,863,878 55.36 4.53

10 Options exercisable at the end of the year 1,433,261 50.34 4.25

The weighted average market price of options exercised during the year 65.60


121

E Weighted average exercise price of options granted during 2019-20 whose

(a) Exercise price equals market price (`) Nil

(b) Exercise price is greater than market price Nil

(c) Exercise price is less than market price Nil

Weighted average fair value of options granted during 2019-20 whose

(a) Exercise price equals market price (`) Nil

(b) Exercise price is greater than market price Nil

(c) Exercise price is less than market price Nil

F Employee-wise details of options granted during the fi nancial year 2019-20 to:

(i) Senior managerial personnel

Name Exercise Price (`) No of Options Granted

No Options Granted during the year

(ii) Employees who were granted, during any one year, options amounting to 5% or more of the options granted during the year

Name No. of options granted % to total options granted during the

year


(iii) Identifi ed employees who were granted option, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant.

Name No. of options granted % to total options granted


G Method and Assumptions used to estimate the fair value of options granted during the year:

The fair value has been calculated using the Black Scholes Option Pricing model

The Assumptions used in the model are as follows:

Variables Weighted Avg

1. Risk Free Interest Rate

No Options Granted During the year

2. Expected Life

3. Expected Volatility

4. Dividend Yield

5. Price of the underlying share in market at the time of the option grant.(`)

Assumptions:

Stock Price: Closing price on National Stock Exchange on the date of grant has been considered.

Volatility: The historical volatility over the expected life has been considered to calculate the fair value.

Risk-free rate of return: The risk-free interest rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero-coupon yield curve for Government Securities.

Exercise Price: Exercise Price of each specifi c grant has been considered.

Time to Maturity: Time to Maturity / Expected Life of options is the period for which the Company expects the options to be live.

Expected divided yield: Expected dividend yield has been calculated as an average of dividend yields for fi ve fi nancial years preceding the date of the grant.

Rationale and Assumptions

We have reviewed the information made available to us for overall consistency and have not carried out any detailed tests in the nature of audit to establish the accuracy of such information. Accordingly, we assume no responsibility and make no representations with respect to the accuracy or completeness of any information provided by and on behalf of the Company.


122

Annexure - H

Form No. MR-3

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31st March 2020

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To

The Members,Lakshmi Vilas Bank Limited,Karur

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s. Lakshmi Vilas Bank Limited (hereinafter called the Bank). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verifi cation of the bank’s books, papers, minute books, forms and returns fi led and other records maintained by the Bank and also the information provided by the Bank, its offi cers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Bank has, during the audit period covering the fi nancial year ended on 31st March 2020, complied with the statutory provisions listed hereunder and also that the Bank has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns fi led and other records maintained by the Bank for the fi nancial year ended on 31st March 2020 according to the provisions of:

i. The Companies Act, 2013 (‘the Act’) and the rules made there under;

ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under;

iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

iv. Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’)as amended from time to time:-

a) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

b) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

c) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

d) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;

e) The Securities and Exchange Board of India (Share based Employee Benefi ts) Regulations, 2014;

f) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

g) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client, which does not apply to the bank;

h) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, which is not applicable as there was no delisting during the year; and

i) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018, which is not applicable to the company as there was no buyback during the year;

vi. The following laws applicable to the banking companies:

a) Bankers’ Books Evidence Act 1891;

b) Reserve Bank of India Act 1934;


123

c) Banking Regulation Act 1949;

d) Banking Companies Rules 1949;

e) Reserve Bank of India (Amendment and Misc. Provisions) Act 1953;

f) Banking companies (Period of preservation of Records) rules 1985;

g) Securitization and Reconstruction of Financial Assets and Enforcement of security Interest (SARFAESI) Act 2002;

h) Prevention of Money Laundering Act (PMLA) 2002;

i) Prevention of Money Laundering (Maintenance of Records, etc) Rules 2005;

j) Banking Ombudsman Scheme 2006;

I have also examined compliance with the applicable clauses of the Secretarial Standards 1 and 2 issued by The Institute of Company Secretaries of India. As the bank has not declared dividend during the year, Secretarial Standards 3 is not applicable.

During the period under review the Bank has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

I further report that The Board of Directors of the Bank is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act / SEBI Regulations /RBI directives.

Adequate notice is given to all Directors to schedule the Board/ Committee Meetings, agenda and detailed notes on agenda were sent adequately in advance, and a system exists for seeking and obtaining further information and clarifi cations on the agenda items before the meeting and for meaningful participation at the meeting. The Minutes of the meetings have recorded the discussions, observations, directions and resolutions of the Board/Board Committees.

I further report that there are adequate systems and processes in the Bank commensurate with the size and operations of the Bank to monitor and ensure compliance with other applicable laws, rules, regulations and guidelines.

I further report that during the period under review, the bank had allotted 10,521 equity shares to eligible employees who had exercised their options under LVB ESOS 2010 scheme. The allotment of shares under LVB ESOS 2010 Scheme are in compliance with the applicable regulatory requirements.

I further report that during the Audit Period the Bank had raised Rs.188.16 crores through issue and allotment of 1,68,00,000 equity shares of face value of Rs. 10/- each through Preferential issue for increasing the capital adequacy ratio in line with RBI norms. The issue and allotment of shares under Preferential issue are in compliance with the applicable regulatory requirements.

I further report that during the period under review, the Bank had submitted an application seeking Reserve Bank of India (RBI) approval on May 07, 2019 for voluntary amalgamation of Indiabulls Housing Finance Limited and Indiabulls Commercial Credit Limited into and with the Lakshmi Vilas Bank Limited, however Reserve Bank of India vide letter dated October 09, 2019, informed that the application for voluntary amalgamation of lndiabulls Housing Finance Limited and lndiabulls Commercial Credit Limited with The Lakshmi Vilas Bank Limited ("LVB" or "Transferee Company") cannot be approved.

Kaliappagounder MuthusamyCompany Secretary in Practice

Place: Coimbatore M No: F 5865; CP: 3176Date : 15.06.2020 UDIN:F005865B000342586


124

To

The Members,Lakshmi Vilas Bank Limited,Karur.

Our Secretarial Audit Report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the bank. My responsibility is to make a report based on the secretarial records produced for my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verifi cation was done on test basis to ensure that correct facts are refl ected in secretarial records. I believe that the processes and practices I followed provide a reasonable basis for our report.

3. Due to the situation arising out of outbreak of COVID-19, the audit of the bank was conducted remotely with records made available by the bank through electronic means.

4. I have not verifi ed the correctness and appropriateness of fi nancial records and books of accounts of the bank.

5. Compliance with the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of the management. My examination was limited to the verifi cation of procedures on a test basis.

6. While forming an opinion on compliance and issuing the secretarial audit report, I have also taken into consideration the compliance related action taken by the bank after 31st March, 2020 but before issue of the report.

7. I have obtained the Management's representation about the compliance of laws, rules and regulations and happening of events, wherever required.

8. I have considered actions carried out by the bank based on independent legal / professional opinion as being in compliance with law, wherever there was scope for multiple interpretations.

9. My Secretarial Audit report is neither an assurance as to the future viability of the bank nor of the effi cacy or effectiveness with which the management has conducted the affairs of the bank.

Kaliappagounder MuthusamyPlace: Coimbatore Company Secretary in PracticeDate : 15.06.2020 M No: F 5865; CP: 3176


125

Annexure - I

DIVIDEND DISTRIBUTION POLICY

I. Introduction:

The Lakshmi Vilas Bank Limited (“LVB”) is a listed private sector bank incorporated under the provisions of Companies Act and operating under the provisions of the Banking Regulation Act, 1949. As on 31st March, 2017, the equity shares of the Bank are listed and traded in the National Stock Exchange of India Limited (“NSE”) and BSE Limited (“BSE”).

II. Purpose:

Being a Banking entity, the Bank is required to ensure compliance with the provisions of the Banking Regulation Act, 1949, guidelines and circulars issued by the Reserve Bank of India on declaration and payment of dividend. Besides the same, being a public limited company listed with NSE and BSE and having ranked within Top 500 of the listed entities in terms of Market Capitalization as on 31st March 2017, the Bank is also required to ensure compliance with the provisions of Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, to the extent applicable to Banking Companies in terms of a policy with regard to Dividend Distribution.

Accordingly, this policy is framed under Regulation 43 A of the SEBI Listing Regulations, approved and adopted by the Board of Directors of the Bank.

III. Policy:

The Policy will be called as `Lakshmi Vilas Bank Dividend Distribution Policy’ and shall be effective from the Financial Year 2016-17.

IV. Criteria for recommending Dividend:

The intent of the Bank is to reward the shareholders of the Bank by sharing a portion of the profi ts, whilst also ensuring that suffi cient funds are retained for growth of the Bank.

The Bank shall declare and pay dividend only in compliance with the provisions of the Banking Regulation Act, regulatory guidelines/directions issued by the Reserve Bank of India on declaration and payment of dividend by Banks from time to time, the provisions of the Companies Act and SEBI Listing Regulations to the extent applicable to Banking Companies.

The term Dividend includes both Interim and Final Dividend.

a) Circumstances under which the shareholders may or may not expect dividend:

The recommendation of dividend by the Board is dependent on various factors including eligibility criteria imposed by the regulators for recommendation & declaration of dividend, capital and reserve position of the Bank and other key fi nancial parameters. Based on the applicable regulatory framework and fi nancial position, the Board of directors may or may not decide to recommend dividend.

b) Financial and other parameters:

The Board of directors would consider the following fi nancial parameters along with the statutory restrictions and directions applicable to Banks before recommending dividend to shareholders:

• Profi tability and Key Financial Metrics.

• Any interim dividends paid.

• Auditors' qualifi cations pertaining to the statement of accounts, if any;

• Bank's capital position and requirements as per Internal Capital Adequacy Assessment Process (ICAAP) projections and other regulatory norms.

• Any other parameters as may be imposed by the regulators from time to time.


126

c) Internal and External factors:

The Board of Directors of the Bank would take into account both internal and external factors as may be applicable at the time of considering the proposal on the declaration of the dividend. Some of the major aspects are as under:

• The state of the economy of the country;

• Statutory and regulatory provisions/restrictions;

• Tax regulations including the treatment of deferred tax assets;

• Capital market conditions;

• Expectation of shareholders;

• Business Growth plan of the bank;

• Future Capital requirement;

• Cost of Raising funds;

• Replacement of Capital Assets;

• Ability to make timely coupon payments/redemption towards debt instruments issued by the Bank;

• Such other factors and material events which the Board may consider as relevant.

d) Utilization of Retained Earnings:

The Bank may utilize its retained earnings in the manner benefi cial to the interest of the Bank and its stakeholders. The Bank would utilise the retained earnings for general corporate purposes, including organic growth. The Board may decide to employ the retained earnings in ensuring maintenance of an optimal level of capital adequacy, meeting the Bank's future growth/expansion plans, other strategic purposes and/or distribution to shareholders, subject to applicable regulations.

e) Parameters that shall be adopted with regard to various classes of shares:

Since the Bank has only one class of shareholders and does not have any other class of shares (including shares with differential voting rights), the dividend declared will be distributed among the shareholders, based on their shareholding on the record date fi xed for ascertaining the dividend entitlement.

f) Regulatory Parameters (RBI):

(i) Eligibility criteria for declaring dividends:

The Bank should be in compliance with Section 15 (relating to restrictions as to payment of Dividend) and Section 17 (relating to creation of reserve fund) of the Banking Regulation Act, 1949 including prevailing regulations / guidelines issued by RBI in this regard.

CRAR of at least 9% for preceding two completed years and the accounting year for which it proposes to declare dividend.

Net NPA level of less than 7%.

In case the Bank does not meet the above CRAR norm, but it is having CRAR of at least 9% for the accounting year for which it proposes to declare dividend, it may still declare the dividend provided the Bank’s Net NPA ratio is less than 5%.

The proposed dividend should be paid out of the current year’s profi t only.

The Bank may not declare dividend for a particular year in case it does not meet any of the above eligibility criteria.

(ii) On satisfying the eligibility criteria as specifi ed above, the Bank shall pay dividends subject to following conditions:

The dividend payout ratio shall not exceed 40% and shall be as per the matrix furnished below contained in the RBI circular no. RBI/2004- 05/451 DBOD. No. BP. BC. 88 / 21 .02067/2004-05 dt. 04.05.2005; dividend payout ratio shall be computed as a percentage of dividend payable in a year (excluding dividend tax) to the net profi t during the year,


127

Matrix of Criteria for maximum permissible range of

Dividend Payout Ratio

Category CRAR

Net NPA Ratio

ZeroMore than

zero but less than 3%

From 3% to less than 5%

From 5% to less than 7%

Range of Dividend Payout Ratio

A 11% or more for each of the last 3 years Up to 40 Up to 35 Up to 25 Up to 15

B 10% or more for each of the last 3 years Up to 35 Up to 30 Up to 20 Up to 10

C 9% or more for each of the last 3 years Up to 30 Up to 25 Up to 15 Up to 5

D 9% or more in the Current year Up to 10 Up to 5 Nil

In case the profi ts for the relevant period includes any extraordinary profi ts/ income, the payout ratio shall be computed after excluding such extraordinary items for reckoning compliance with prudential payout ratio;

The fi nancial statements pertaining to the fi nancial year, for which the bank is declaring dividend, should be free of any qualifi cations by the statutory auditors, which have an adverse bearing on the profi ts during the year. In case of any qualifi cation to that effect, the net profi t should be suitably adjusted while computing the dividend payout ratio.

V. Quantum of Dividend payable:

The Quantum of dividend payable would be subject to the Bank fulfi lling the eligibility criteria set out by the relevant Acts and the Reserve Bank of India and the same shall be decided by the Board of Directors from time to time.

VI. Amendments and Review:

This policy will be reviewed annually by the Board of Directors of the Bank and this Policy will be in force till the time it is not amended or revoked by the Board.

VII. Disclosure:

The policy will be made available in the Bank’s website – www.lvbank.com and will also be disclosed in the Annual Report as required under the SEBI Listing Regulations.


128

Annexure - J

Form No. MGT-9

EXTRACT OF ANNUAL RETURNas on the fi nancial year ended on 31/03/2020

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

(i) CIN : L65110TN1926PLC001377

(ii) Registration Date : 03/11/1926

(iii) Name of the Company : LAKSHMI VILAS BANK LIMITED

(iv) Category / Sub-Category of the Company : COMPANY LIMITED BY SHARES / INDIAN NON-GOVERNMENT COMPANY

(v) Address of the Registered offi ce and contact details

: SALEM ROAD, KATHAPARAI,KARUR – 639006TAMIL NADUTel: 04324 - 258501Email: [email protected]: www.lvbank.com

(vi) Whether listed company : YES (The National Stock Exchange of India Ltd & BSE Ltd)

(vii) Name, Address and Contact details of Registrar and Transfer Agent, if any

: INTEGRATED REGISTRY MANAGEMENT SERVICES PRIVATE LIMITEDII Floor, ‘Kences Towers’No.1, Ramakrishna Street,North Usman Road, T.NagarChennai – 600 017Tel: +91 44 28140801/2/3Fax: +91 44 28142479Website: www.intergratedindia.inEmail: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sl. No.

Name and Description ofmain products / services

NIC Code of theProduct / service

% to total turnover of thecompany

1 BANKING 64191 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

Sl. No

Name and Address of the Company

CIN/GLN

Holding / Subsidiary /Associate

% of shares held

Applicable Section

Not Applicable


129

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

(i) Category-wise Share Holding:

CAT CODE CATEGORY OF SHAREHOLDERS

NO. OF SHARES HELD AT THE BEGINNING OF THE YEAR

NO. OF SHARES HELD AT THE END OF THE YEAR % CHANGE

DURING THE YEARDEMAT PHYSICAL TOTAL

% OF TOTAL

SHARESDEMAT PHYSICAL TOTAL

% OF TOTAL

SHARES

A SHAREHOLDING OF PROMOTER AND PROMOTER GROUP

(1) Indiana Individual / Hindu Undivided Family 7353121 0 7353121 2.30 7539956 0 7539956 2.24 -0.06b Central Government 0 0 0 0 0 0 0 0 0c State Government 0 0 0 0 0 0 0 0 0d Bodies Corporate 15385011 0 15385011 4.81 15370016 0 15370016 4.56 -0.25e Financial Institutions / Banks 0 0 0 0 0 0 0 0 0f Any other (specify) 0 0 0 0 0 0 0 0 0

SUB TOTAL A(1) 22738132 0 22738132 7.11 22909972 0 22909972 6.80 -0.31(2) Foreigna Individual (Non resident / foreign) 0 0 0 0 0 0 0 0 0b Bodies corporate 0 0 0 0 0 0 0 0 0c Institutions 0 0 0 0 0 0 0 0 0d Qualifi ed Foreign Investor 0 0 0 0 0 0 0 0 0e Any other (specify) 0 0 0 0 0 0 0 0 0

SUB TOTAL A(2) 0 0 0 0 0 0 0 0 0Total Shareholding of promoter and Promoter Group(A)=A(1)+A(2) 22738132 0 22738132 7.11 22909972 0 22909972 6.80 -0.31

B Public Shareholding(1) Institutionsa Mutual funds / UTI 142 0 142 0.00 28011 0 28011 0.01 0.01b Financial Institutions / Banks 9209732 0 9209732 2.88 6894956 0 6894956 2.05 -0.83c Central Government 518894 0 518894 0.16 580170 0 580170 0.17 0.01d State Government(s) 0 0 0 0 0 0 0 0 0e Venture Capital Funds 0 0 0 0 0 0 0 0 0f Insurance Companies 591904 0 591904 0.19 16102221 0 16102221 4.78 4.59g Foreign Institutional Investors 0 10200 10200 0.00 0 10200 10200 0.00 0.00h Foreign Venture Capital Investors 0 0 0 0 0 0 0 0 0i Qualifi ed Foreign Investor 0 0 0 0 0 0 0 0 0

j Any other (Foreign Portfolio Investor - Corporate) 53593180 0 53593180 16.75 37401962 0 37401962 11.11 -5.64

SUB TOTAL B(1) 63913852 10200 63924052 19.98 61007320 10200 61017520 18.12 -1.86(2) Non-Institutionsa Bodies Corporate (Indian / foreign /

Overseas) 105681430 7451 105688881 33.04 102656079 5159 102661238 30.49 -2.55

b Individuals (Resident / NRI / Foreign National)

(i) Individual shareholders holdingNominal share Capital upto ` 1 Lakh 50544484 6598747 57143231 17.86 57203005 5955496 63158501 18.76 0.90

(ii) Individual shareholders holdingNominal share Capital above ` 1 Lakh 57542098 638198 58180296 18.19 83173674 455913 83629587 24.84 6.65

c Any other (Clearing Member, Corporate Body – Limited Liability Partnership, Corporate CM/TM - Client Margin A/c, Corporate CM/TM-Collateral Account, Corporate CM/TM-Proprietary Account, Limited Liability Partnership, LLP-PMS, Trust-PMS, Trusts)

12228638 0 12228638 3.82 3336933 0 3336933 0.99 -2.83

SUB TOTAL B(2) 225996650 7244396 233241046 72.91 246369691 6416568 252786259 75.07 2.16Total Public Share Holding (B)=B(1)+B(2) 289910502 7254596 297165098 92.89 307377011 6426768 313803779 93.20 0.31

TOTAL (A)+(B) 312648634 7254596 319903230 100.00 330286983 6426768 336713751 100.00 0.00C Shares held by Custodians and

against which Depository Receipts have been issued

0 0 0 0 0 0 0 0 0

GRAND TOTAL (A)+(B)+(C) 312648634 7254596 319903230 100.00 330286983 6426768 336713751 100.00 0.00


130

(ii) Shareholding of promoters:

Sl. No.

NAME

Shareholding at the beginning of the year

Shareholding at the end of the year

% change in shareholding

during the year

No. of shares

% of total shares of the

company

% of shares Pledged /

encumbered to total shares

No. of shares


company



1 K R Pradeep 6420378 2.01 0.00 6730378 2.00 0.00 -0.012 Anuradha Pradeep 8288 0.00 0.00 8288 0.00 0.00 0.003 Kare Electronics and Development Private

Limited1679425 0.53 0.00 1679425 0.50 0.00 -0.03

4 Pranava Electronics P Ltd 4549952 1.42 0.00 4549952 1.35 0.00 -0.075 S G Prabhakharan 5338 0.00 0.00 Transmission 0.006 Usha R Prabakaran 153674 0.05 0.00 159012 0.05 0.00 0.007 G P Prajnesh 18933 0.01 0.00 53643 0.02 0.00 0.018 G Sudhakara Gupta 2666 0.00 0.00 2666 0.00 0.00 0.009 Ariston Capital Asset Holdings Private

Limited2463411 0.77 0.64 2548416 0.76 0.72 -0.01

10 Tangerine Capital Asset Holdings LLP 2694881 0.84 0.84 2594881 0.77 0.77 -0.0711 XS Real Properties Private Limited 18677 0.01 0.00 18677 0.01 0.00 0.0012 M P Shyam 180829 0.06 0.00 182186 0.05 0.00 0.0013 M S Sharmila 159826 0.05 0.05 159826 0.05 0.00 0.0014 M K Panduranga Setty 2761 0.00 0.00 2761 0.00 0.00 0.0015 P Vasantha 21619 0.01 0.00 18905 0.01 0.00 0.0016 M S Nivedita 13333 0.00 0.00 13333 0.00 0.00 0.0017 Advaith Motors Pvt Ltd 2630020 0.82 0.62 2630020 0.78 0.59 -0.0418 Cauvery Motors Pvt Ltd 1348645 0.42 0.31 1348645 0.40 0.30 -0.0219 N Malayalaramamirtham 79634 0.03 0.00 24634 0.01 0.00 -0.0220 M Geetha 17522 0.01 0.00 2522 0.00 0.00 -0.0121 M Balasubramanian 8707 0.00 0.00 8707 0.00 0.00 0.0022 N Susila 11965 0.00 0.00 11965 0.00 0.00 0.0023 N Saiprasad 134865 0.04 0.00 63865 0.02 0.00 -0.0224 N Sivakumar 76777 0.02 0.00 76777 0.02 0.00 0.0025 M Shalini 8633 0.00 0.00 8633 0.00 0.00 0.0026 V N Jayaprakash 26620 0.01 0.00 11855 0.00 0.00 0.0027 N Dwarakanathan 753 0.00 0.00 0 0.00 NA 0.0028 Sasikaladhevi M R 0 0.00 NA 0 0.00 NA 0.0029 Shri Gayathiri & Co 0 0.00 NA 0 0.00 NA 0.0030 Anirudh P Kare 0 0.00 NA 0 0.00 NA 0.0031 Parinita P Kare 0 0.00 NA 0 0.00 NA 0.0032 K R Nagesh 0 0.00 NA 0 0.00 NA 0.0033 K R Satish 0 0.00 NA 0 0.00 NA 0.0034 G. Chandralakshmi 0 0.00 NA 0 0.00 NA 0.0035 M P Vikram Setty 0 0.00 NA 0 0.00 NA 0.0036 Sheela Rani Chunkath (New inclusion

w.e.f 02.01.2020)NA NA NA 0 0.00 NA 0.00

37 Kare Power Resources Private Limited 0 0.00 NA 0 0.00 NA 0.0038 Kare Investments Private Limited 0 0.00 NA 0 0.00 NA 0.0039 Brindavan Hydropower Pvt Ltd 0 0.00 NA 0 0.00 NA 0.0040 Innovaneer Realtors Pvt. Ltd.

(formerly Greenbanyan Power Pvt Ltd.)0 0.00 NA 0 0.00 NA 0.00

41 MPrime Premises Pvt Ltd 0 0.00 NA 0 0.00 NA 0.0042 ILMS Projects Pvt Ltd 0 0.00 NA 0 0.00 NA 0.0043 ILMS Builders Pvt Ltd 0 0.00 NA 0 0.00 NA 0.0044 Milestone Plot Developers Pvt Ltd 0 0.00 NA 0 0.00 NA 0.0045 Pranava DMCC 0 0.00 NA 0 0.00 NA 0.00


131

Sl. No.

NAME


Shareholding at the end of the year

% change in shareholding

during the year

No. of shares


company



No. of shares


company



46 Pranava City Complex Pvt Ltd 0 0.00 NA 0 0.00 NA 0.0047 Holzwerk Interior Private Limited 0 0.00 NA 0 0.00 NA 0.0048 Alpine Holdings LLP 0 0.00 NA 0 0.00 NA 0.0049 Chrysalis Play School Private Limited

(formerly Chrysalis Play-School LLP)0 0.00 NA 0 0.00 NA 0.00

50 Scotwood Estate LLP 0 0.00 NA 0 0.00 NA 0.0051 Tangerine Stock Estate LLP 0 0.00 NA 0 0.00 NA 0.0052 XS Real Properties Service LLP 0 0.00 NA 0 0.00 NA 0.0053 Acestar Properties Private Limited 0 0.00 NA 0 0.00 NA 0.0054 Helios Estate Private Limited 0 0.00 NA 0 0.00 NA 0.0055 Amaryllis Properties Private Limited 0 0.00 NA 0 0.00 NA 0.0056 Magenta Ceramik Systems Private Limited 0 0.00 NA 0 0.00 NA 0.0057 Enveedu Properties LLP 0 0.00 NA 0 0.00 NA 0.0058 Magenta Re Asset Private Limited 0 0.00 NA 0 0.00 NA 0.0059 Pallava Estate LLP 0 0.00 NA 0 0.00 NA 0.0060 Holzwerk Jardins Interior LLP 0 0.00 NA 0 0.00 NA 0.0061 Jacaranda Properties Pvt Ltd 0 0.00 NA 0 0.00 NA 0.0062 Allbless Tracon Private Limited 0 0.00 NA 0 0.00 NA 0.0063 Dotmark Vinimay Private Limited 0 0.00 NA 0 0.00 NA 0.0064 Alllike Marketing Private Limited 0 0.00 NA 0 0.00 NA 0.0065 Akshara Motors Private Limited 0 0.00 NA 0 0.00 NA 0.0066 Ananya Software Private Limited 0 0.00 NA 0 0.00 NA 0.0067 Advaith Spares & Accessories Private Limited 0 0.00 NA 0 0.00 NA 0.0068 Advaith Automation Private Limited 0 0.00 NA 0 0.00 NA 0.0069 Mysore Snack Foods Limited 0 0.00 NA 0 0.00 NA 0.0070 Mysore Vegetable Oil Products Limited 0 0.00 NA 0 0.00 NA 0.0071 Advaith Marketing Private Limited 0 0.00 NA 0 0.00 NA 0.0072 Lathangi Motors Private Limited 0 0.00 NA 0 0.00 NA 0.0073 Lathangi Automobiles Private Limited 0 0.00 NA 0 0.00 NA 0.0074 Wilworth Earth Movers Private Limited 0 0.00 NA 0 0.00 NA 0.0075 Lathangi Cycle And Carriage Private Limited 0 0.00 NA 0 0.00 NA 0.0076 Wilway Engineering And Constructions

Private Limited0 0.00 NA 0 0.00 NA 0.00

77 Lathangi Equipments Private Limited 0 0.00 NA 0 0.00 NA 0.0078 Yashaswini Motors Private Limited 0 0.00 NA 0 0.00 NA 0.0079 Krishna Industries Private Limited 0 0.00 NA 0 0.00 NA 0.0080 Venkateshwara Exports 0 0.00 NA 0 0.00 NA 0.0081 K.V.N Finance 0 0.00 NA 0 0.00 NA 0.0082 Shri Gayathiri Credit Co 0 0.00 NA 0 0.00 NA 0.0083 Shri Gayathiri Financiers 0 0.00 NA 0 0.00 NA 0.0084 Shri Gayathiri Chits 0 0.00 NA 0 0.00 NA 0.0085 K.N.Viswanatha Chettiyar & Co 0 0.00 NA 0 0.00 NA 0.0086 Susila Leasings 0 0.00 NA 0 0.00 NA 0.0087 Gayathiri Finance Corporations 0 0.00 NA 0 0.00 NA 0.0088 Shri Gayathiri Finance & Investments 0 0.00 NA 0 0.00 NA 0.0089 Dhanesh Chits 0 0.00 NA 0 0.00 NA 0.0090 Gayathiri Associates 0 0.00 NA 0 0.00 NA 0.0091 Gayathiri Leasings 0 0.00 NA 0 0.00 NA 0.0092 Gayathiri Credits 0 0.00 NA 0 0.00 NA 0.00

TOTAL 22738132 7.11 2.46 22909972 6.80 2.37 -0.31


132

(iii) Change in Promoters’ Shareholding (please specify, if there is no change):

Sl. No.

NAME


Increase / DecreaseCumulative Shareholding

during the year

No. of Shares


Company

No. of shares


Company

No. of Shares


Company

1K R Pradeep

Opening Balance as on 01/04/2019 6420378 2.01

09/08/2019 Market Purchase 200000 0.06 6620378 1.97

19/08/2019 Market Purchase 110000 0.03 6730378 2.00

Closing Balance as on 31/03/2020 6730378 2.00

2 Anuradha Pradeep

Opening Balance as on 01/04/2019 8288 0.00 No Change


3 Kare Electronics and Development Private Limited



4 Pranava Electronics P Ltd



5 S G Prabhakharan


02/01/2020Transmission of shares to Mrs.Usha R Prabakaran (spouse)

-5338 0.00 0 0

Closing Balance as on 31/03/2020 0 0

6 Usha R Prabakaran


02/01/2020Transmission of shares from Mr. S.G.Prabhakharan (spouse)

5338 0.00 159012 0.05

Closing Balance as on 31/03/2020 159012 0.05 0.05

7 G P Prajnesh


18/03/2020 Market Purchase 34710 0.01 53643 0.02


8 G Sudhakara Gupta


Closing Balance as on 31/03/2020 2666 0.009 Ariston Capital Asset Holdings Private Limited


18/03/2020 Market Purchase 40000 0.01 2503411 0.74

19/03/2020 Market Purchase 21505 0.01 2524916 0.75

23/03/2020 Market Purchase 23500 0.01 2548416 0.76


10Tangerine Capital Asset Holdings LLP


19/08/2019 Market Sale -100000 -0.03 2594881 0.77



133

Sl. No.

NAME



during the year

No. of Shares


Company

No. of shares


Company

No. of Shares


Company

11 XS Real Properties Private Limited



12 M P Shyam


01/04/2019 Market Purchase 1357 0.00 182186 0.06


13 M S Sharmila



14 M K Panduranga Setty



15 P Vasantha


01/04/2019 Market Sale -2714 0.00 18905 0.01


16 M S Nivedita



17 Advaith Motors Pvt Ltd



18 Cauvery Motors Pvt Ltd



19 N Malayalaramamirtham


14/11/2019 Off-Market Sale -40000 -0.01 39634 0.01

23/03/2020 Off-Market Sale -15000 0.00 24634 0.01


20 M Geetha


13/11/2019 Market Sale -15000 0.00 2522 0.00


21 M Balasubramanian



22 N Susila




134

Sl. No.

NAME



during the year

No. of Shares


Company

No. of shares


Company

No. of Shares


Company

23 N Saiprasad


14/11/2019 Off-Market Sale -50000 -0.01 84865 0.03

17/03/2020 Market Sale -10000 0.00 74865 0.02

19/03/2020 Market Sale -10000 0.00 64865 0.02

24/03/2020 Market Sale -1000 0.00 63865 0.02


24 N Sivakumar



25 M Shalini



26 V N Jayaprakash


14/11/2019 Market Sale -5000 0.00 21620 0.01

18/03/2020 Market Sale -12000 0.00 9620 0.00

19/03/2020 Transmission of shares from spouse 2235 0.00 11855 0.00


27 N Dwarakanathan


19/11/2019 Market Sale -753 0.00 0 0.00


28 Sasikaladhevi M R 0 0 No Change 0 0

29 Shri Gayathiri & Co 0 0 No Change 0 0

30 Anirudh P Kare 0 0 No Change 0 0

31 Parinita P Kare 0 0 No Change 0 0

32 K R Nagesh 0 0 No Change 0 0

33 K R Satish 0 0 No Change 0 0

34 G. Chandralakshmi 0 0 No Change 0 0

35 M. P. Vikram Setty 0 0 No Change 0 0

36 Sheela Rani Chunkath NA NA No Change 0 0

37 Kare Power Resources Private Limited 0 0 No Change 0 0

38 Kare Investments Private Limited 0 0 No Change 0 0

39 Brindavan Hydropower Pvt Ltd 0 0 No Change 0 040 Innovaneer Realtors Pvt. Ltd. (formerly Greenbanyan Power

Pvt Ltd.) 0 0 No Change 0 0

41 Mprime Premises Pvt Ltd 0 0 No Change 0 0

42 ILMS Projects Pvt Ltd 0 0 No Change 0 0

43 ILMS Builders Pvt Ltd 0 0 No Change 0 0

44 Milestone Plot Developers Pvt Ltd 0 0 No Change 0 0

45 Pranava DMCC 0 0 No Change 0 0

46 Pranava City Complex Pvt Ltd 0 0 No Change 0 0

47 Holzwerk Interior Private Limited 0 0 No Change 0 0


135

Sl. No.

NAME



during the year

No. of Shares


Company

No. of shares


Company

No. of Shares


Company

48 Alpine Holdings LLP 0 0 No Change 0 049 Chrysalis Play School Private Limited (formerly Chrysalis

Play-School LLP) 0 0 No Change 0 0

50 Scotwood Estate LLP 0 0 No Change 0 0

51 Tangerine Stock Estate LLP 0 0 No Change 0 0

52 XS Real Properties Service LLP 0 0 No Change 0 0

53 Acestar Properties Private Limited 0 0 No Change 0 0

54 Helios Estate Private Limited 0 0 No Change 0 0

55 Amaryllis Properties Private Limited 0 0 No Change 0 0

56 Magenta Ceramik Systems Private Limited 0 0 No Change 0 0

57 Enveedu Properties LLP 0 0 No Change 0 0

58 Magenta Re Asset Private Limited 0 0 No Change 0 0

59 Pallava Estate LLP 0 0 No Change 0 0

60 Holzwerk Jardins Interior LLP 0 0 No Change 0 0

61 Jacaranda Properties Pvt Ltd 0 0 No Change 0 0

62 Allbless Tracon Private Limited 0 0 No Change 0 0

63 Dotmark Vinimay Private Limited 0 0 No Change 0 0

64 Alllike Marketing Private Limited 0 0 No Change 0 0

65 Akshara Motors Private Limited 0 0 No Change 0 0

66 Ananya Software Private Limited 0 0 No Change 0 0

67 Advaith Spares & Accessories Private Limited 0 0 No Change 0 0

68 Advaith Automation Private Limited 0 0 No Change 0 0

69 Mysore Snack Foods Limited 0 0 No Change 0 0

70 Mysore Vegetable Oil Products Limited 0 0 No Change 0 0

71 Advaith Marketing Private Limited 0 0 No Change 0 0

72 Lathangi Motors Private Limited 0 0 No Change 0 0

73 Lathangi Automobiles Private Limited 0 0 No Change 0 0

74 Wilworth Earth Movers Private Limited 0 0 No Change 0 0

75 Lathangi Cycle And Carriage Private Limited 0 0 No Change 0 0

76 Wilway Engineering And Constructions Private Limited 0 0 No Change 0 0

77 Lathangi Equipments Private Limited 0 0 No Change 0 0

78 Yashaswini Motors Private Limited 0 0 No Change 0 0

79 Krishna Industries Private Limited 0 0 No Change 0 0

80 Venkateshwara Exports 0 0 No Change 0 0

81 K.V.N Finance 0 0 No Change 0 0

82 Shri Gayathiri Credit Co 0 0 No Change 0 0

83 Shri Gayathiri Financiers 0 0 No Change 0 0

84 Shri Gayathiri Chits 0 0 No Change 0 0

85 K.N.Viswanatha Chettiyar & Co 0 0 No Change 0 0

86 Susila Leasings 0 0 No Change 0 0

87 Gayathiri Finance Corporations 0 0 No Change 0 0

88 Shri Gayathiri Finance & Investments 0 0 No Change 0 0

89 Dhanesh Chits 0 0 No Change 0 0

90 Gayathiri Associates 0 0 No Change 0 0

91 Gayathiri Leasings 0 0 No Change 0 0

92 Gayathiri Credits 0 0 No Change 0 0


136

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sl. No.

NAME



during the year

No. of Shares

% of total Shares of the

Company

No. of Shares


Company

No. of Shares


Company

1 Indiabulls Housing Finance Limited


26/07/2019Preferential Issue allotment dated 04.07.2019

16800000 4.99 16800000 4.99


2 India Opportunities Growth Fund Ltd - Pinewood Strategy


10/05/2019 Market Purchase 5580000 1.74 12580000 3.93

09/08/2019 Market Purchase 900000 0.27 13480000 4.00

01/11/2019 Market Purchase 1000000 0.30 14480000 4.30

15/11/2019 Market Sale -1000000 -0.30 13480000 4.00


3 Srei Infrastructure Finance Limited


23/08/2019 Market Purchase 1000000 0.30 2510294 0.75

30/08/2019 Market Purchase 500000 0.15 3010294 0.89

27/09/2019 Market Purchase 750000 0.22 3760294 1.12

20/12/2019 Market Purchase 1500000 0.45 5260294 1.56

27/12/2019 Market Purchase 1200000 0.36 6460294 1.92

17/01/2020 Market Purchase 910000 0.27 7370294 2.19

20/03/2020 Market Purchase 3875000 1.15 11245294 3.34


4 JM Financial Services Ltd.


05/04/2019 Market Sale -47552 -0.01 963778 0.30

12/04/2019 Market Sale -307771 -0.10 656007 0.21

19/04/2019 Market Sale -208562 -0.07 447445 0.14

26/04/2019 Market Purchase 346769 0.11 794214 0.25

03/05/2019 Market Purchase 107164 0.03 901378 0.28

10/05/2019 Market Sale -263116 -0.08 638262 0.20

17/05/2019 Market Sale -92067 -0.03 546195 0.17

24/05/2019 Market Purchase 67945 0.02 614140 0.19

31/05/2019 Market Sale -420736 -0.13 193404 0.06

07/06/2019 Market Sale -56310 -0.02 137094 0.04

14/06/2019 Market Purchase 103195 0.03 240289 0.08

21/06/2019 Market Purchase 25760 0.01 266049 0.08

28/06/2019 Market Sale -29606 -0.01 236443 0.07

29/06/2019 Market Sale -571 0.00 235872 0.07

04/07/2019 Market Sale -19679 -0.01 216193 0.06

05/07/2019 Market Purchase 705076 0.21 921269 0.27

12/07/2019 Market Sale -778120 -0.23 143149 0.04


137

Sl. No.

NAME



during the year

No. of Shares


Company

No. of Shares


Company

No. of Shares


Company

19/07/2019 Market Purchase 5896 0.00 149045 0.04

26/07/2019 Market Sale -541 0.00 148504 0.04

02/08/2019 Market Purchase 2172 0.00 150676 0.04

09/08/2019 Market Purchase 24404 0.01 175080 0.05

16/08/2019 Market Sale -7899 0.00 167181 0.05

23/08/2019 Market Sale -25521 -0.01 141660 0.04

30/08/2019 Market Sale -121335 -0.04 20325 0.01

06/09/2019 Market Purchase 1291 0.00 21616 0.01

13/09/2019 Market Sale -9691 0.00 11925 0.00

20/09/2019 Market Purchase 20298 0.01 32223 0.01

27/09/2019 Market Purchase 399073 0.12 431296 0.13

30/09/2019 Market Sale -1340 0.00 429956 0.13

04/10/2019 Market Purchase 1783014 0.53 2212970 0.66

11/10/2019 Market Purchase 394462 0.12 2607432 0.77

18/10/2019 Market Purchase 2115 0.00 2609547 0.78

25/10/2019 Market Sale -27579 -0.01 2581968 0.77

01/11/2019 Market Purchase 119601 0.04 2701569 0.80

08/11/2019 Market Sale -119197 -0.04 2582372 0.77

15/11/2019 Market Purchase 1471619 0.44 4053991 1.20

22/11/2019 Market Sale -262315 -0.08 3791676 1.13

29/11/2019 Market Sale -689238 -0.20 3102438 0.92

06/12/2019 Market Sale -174176 -0.05 2928262 0.87

13/12/2019 Market Purchase 1528 0.00 2929790 0.87

20/12/2019 Market Sale -24116 -0.01 2905674 0.86

27/12/2019 Market Purchase 4515 0.00 2910189 0.86

31/12/2019 Market Purchase 7725 0.00 2917914 0.87

03/01/2020 Market Sale -14490 0.00 2903424 0.86

10/01/2020 Market Sale -101552 -0.03 2801872 0.83

17/01/2020 Market Sale -31663 -0.01 2770209 0.82

24/01/2020 Market Purchase 152 0.00 2770361 0.82

31/01/2020 Market Purchase 36459 0.01 2806820 0.83

07/02/2020 Market Purchase 4300 0.00 2811120 0.83

14/02/2020 Market Purchase 7410 0.00 2818530 0.84

21/02/2020 Market Sale -10990 0.00 2807540 0.83

28/02/2020 Market Purchase 6535395 1.94 9342935 2.77

06/03/2020 Market Purchase 478 0.00 9343413 2.77

13/03/2020 Market Purchase 90803 0.03 9434216 2.80

20/03/2020 Market Sale -91648 -0.03 9342568 2.77

27/03/2020 Market Purchase 48942 0.01 9391510 2.79

31/03/2020 Market Sale -39700 -0.01 9351810 2.78



138

Sl. No.

NAME



during the year

No. of Shares


Company

No. of Shares


Company

No. of Shares


Company

5 DHFL Pramerica Life Insurance Co. Ltd



6 Capri Global Holdings Private Limited


14/06/2019 Market Sale -134496 -0.04 5445504 1.70

05/07/2019 Market Sale -601000 -0.18 4844504 1.44

12/07/2019 Market Sale -40610 -0.01 4803894 1.43

30/08/2019 Market Purchase 1507696 0.45 6311590 1.87

01/11/2019 Market Purchase 2500410 0.74 8812000 2.62


7 Aviator Emerging Market Fund


13/09/2019 Market Purchase 8378378 2.49 8378378 2.49


8 Capri Global Advisory Services Pvt Ltd


25/10/2019 Market Purchase 1500000 0.45 1500000 0.45

01/11/2019 Market Purchase 5000000 1.48 6500000 1.93

22/11/2019 Market Purchase 220000 0.07 6720000 2.00


9 M N DASTUR and Company Private Limited


05/04/2019 Market Sale -750000 -0.23 7260482 2.27

12/04/2019 Market Sale -350000 -0.11 6910482 2.16

07/06/2019 Market Sale -50000 -0.02 6860482 2.15

14/06/2019 Market Sale -180000 -0.06 6680482 2.09

28/06/2019 Market Sale -35000 -0.01 6645482 2.08

04/07/2019 Market Sale -15000 0.00 6630482 1.97

05/07/2019 Market Sale -151118 -0.04 6479364 1.92

12/07/2019 Market Sale -98882 -0.03 6380482 1.89


10. Aditya Birla Sun Life Insurance Company Limited


05/04/2019 Market Purchase 169515 0.05 6154439 1.92


11 Belgrave Investment Fund


12/07/2019 Market Sale -1410000 -0.42 12633100 3.75

23/08/2019 Market Sale -1000000 -0.30 11633100 3.45

30/08/2019 Market Sale -1000000 -0.30 10633100 3.16


139

Sl. No.

NAME



during the year

No. of Shares


Company

No. of Shares


Company

No. of Shares


Company

20/09/2019 Market Sale -1500000 -0.45 9133100 2.71

27/09/2019 Market Sale -1000000 -0.30 8133100 2.42

20/12/2019 Market Sale -2700000 -0.80 5433100 1.61


12 Max Life Insurance Co Ltd A/C Participating Fund


25/10/2019 Market Sale -1014879 -0.30 10617568 3.15

01/11/2019 Market Sale -10617568 -3.15 0 0.00


13 Aviator Global Investment Fund


06/09/2019 Market Sale -8378378 -2.49 0 0.00


14 Nomura Singapore Limited


12/04/2019 Market Purchase 185692 0.06 8119231 2.54

19/04/2019 Market Purchase 75000 0.02 8194231 2.56

03/05/2019 Market Sale -5580000 -1.74 2614231 0.82

10/05/2019 Market Sale -260692 -0.08 2353539 0.74


15 Karvy Stock Broking Ltd


05/04/2019 Market Purchase 391925 0.12 8004019 2.50

12/04/2019 Market Purchase 114440 0.04 8118459 2.54

19/04/2019 Market Purchase 158657 0.05 8277116 2.59

26/04/2019 Market Purchase 219814 0.07 8496930 2.66

03/05/2019 Market Purchase 9262 0.00 8506192 2.66

10/05/2019 Market Purchase 123055 0.04 8629247 2.70

17/05/2019 Market Purchase 4158 0.00 8633405 2.70

24/05/2019 Market Purchase 490553 0.15 9123958 2.85

31/05/2019 Market Purchase 2659 0.00 9126617 2.85

07/06/2019 Market Sale -4006 0.00 9122611 2.85

14/06/2019 Market Purchase 144515 0.05 9267126 2.90

21/06/2019 Market Sale -69076 -0.02 9198050 2.88

28/06/2019 Market Sale -14468 -0.00 9183582 2.87

29/06/2019 Market Purchase 37 0.00 9183619 2.87

04/07/2019 Market Sale -9898 0.00 9173721 2.72

05/07/2019 Market Sale -19626 -0.01 9154095 2.72

12/07/2019 Market Purchase 43185 0.01 9197280 2.73

19/07/2019 Market Sale -1015342 -0.30 8181938 2.43

26/07/2019 Market Sale -10677 0.00 8171261 2.43


140

Sl. No.

NAME



during the year

No. of Shares


Company

No. of Shares


Company

No. of Shares


Company

02/08/2019 Market Purchase 27177 0.01 8198438 2.43

09/08/2019 Market Purchase 1386 0.00 8199824 2.44

16/08/2019 Market Sale -7157 0.00 8192667 2.43

23/08/2019 Market Purchase 13143 0.00 8205810 2.44

30/08/2019 Market Sale -97226 -0.03 8108584 2.41

06/09/2019 Market Purchase 6127 0.00 8114711 2.41

13/09/2019 Market Purchase 12963 0.00 8127674 2.41

20/09/2019 Market Purchase 73301 0.02 8200975 2.44

27/09/2019 Market Sale -19349 -0.01 8181626 2.43

30/09/2019 Market Purchase 6270 0.00 8187896 2.43

04/10/2019 Market Sale -2668 0.00 8185228 2.43

11/10/2019 Market Sale -3452 0.00 8181776 2.43

18/10/2019 Market Purchase 17879 0.01 8199655 2.44

25/10/2019 Market Sale -18015 -0.01 8181640 2.43

01/11/2019 Market Purchase 122151 0.04 8303791 2.47

08/11/2019 Market Sale -59905 -0.02 8243886 2.45

15/11/2019 Market Sale -2850631 -0.85 5393255 1.60

22/11/2019 Market Sale -4682713 -1.39 710542 0.21

29/11/2019 Market Sale -110636 -0.03 599906 0.18

06/12/2019 Market Sale -368267 -0.11 231639 0.07

13/12/2019 Market Sale -4987 0.00 226652 0.07

27/12/2019 Market Sale -2371 0.00 224281 0.07

31/12/2019 Market Sale -2205 0.00 222076 0.07

03/01/2020 Market Sale -2226 0.00 219850 0.07

10/01/2020 Market Sale -103688 -0.03 116162 0.03

17/01/2020 Market Sale -504 0.00 115658 0.03

24/01/2020 Market Sale -9150 0.00 106508 0.03

14/02/2020 Market Sale -6048 0.00 100460 0.03

21/02/2020 Market Sale -1160 0.00 99300 0.03


16 Eriska Investment Fund Ltd


02/08/2019 Market Sale -4000000 -1.19 2500000 0.74

09/08/2019 Market Sale -2500000 -0.74 0 0.00



141

(v) Shareholding of Directors and Key Managerial Personnel:

Sl.No.

Name


Increase / DecreaseCumulative shareholding

during the year

No. of Shares


Company

No. of Shares


Company

No. of Shares


Company

1 B.K. ManjunathNon-Executive Chairman



2 S SundarManaging Director & CEO (from 01/01/2020)

0 0.00 No Change 0 0.00

3 Y N Lakshminarayana Murthy


03/12/2019 Market Purchase 5000 0.00 6626 0.00


4 G Sudhakara Gupta



5 H S Upendra Kamath 0 0.00 No Change 0 0.00

6 N Saiprasad


14/11/2019 Off-Market Sale -50000 -0.01 84865 0.03

17/03/2020 Market Sale -10000 0.00 74865 0.02

19/03/2020 Market Sale -10000 0.00 64865 0.02

24/03/2020 Market Sale -1000 0.00 63865 0.02


7 Gorinka Jaganmohan Rao (from 02/12/2019) 0 0.00 No Change 0 0.00

8 Raghuraj Gujjar (from 02/12/2019)



9 Shakti Sinha (from 02/12/2019) 0 0.00 No Change 0 0.00

10 Satish Kumar Kalra (from 02/12/2019) 0 0.00 No Change 0 0.00

11 Meeta Makhan (from 23/01/2020) 0 0.00 No Change 0 0.00

12 K R Pradeep (from 23/01/2020)


09/08/2019 Market Purchase 200000 0.06 6620378 1.97

19/08/2019 Market Purchase 110000 0.03 6730378 2.00


13 Rajnish Kumar – RBI Additional Director 0 0.00 No Change 0 0.00

14Sundaram Shankar – RBI Additional Director (from 18/11/2019)

0 0.00 No Change 0 0.00

15 N Ramanathan – Company Secretary 0 0.00 No Change 0 0.00

16 S Sundar – Chief Financial Offi cer (till 31/12/2019) 0 0.00 No Change 0 0.00


142

Sl.No.

Name


Increase / DecreaseCumulative shareholding

during the year

No. of Shares


Company

No. of Shares


Company

No. of Shares


Company

17 Kusuma R Muniraju (till 19/06/2019)



18 Parthasarathi Mukherjee(MD&CEO till 31/08/2019)


29/11/2019 Market Sale -9500 0.00 470500 0.14

06/12/2019 Market Sale -19500 -0.01 451000 0.13

13/12/2019 Market Sale -6000 0.00 445000 0.13

20/12/2019 Market Sale -8000 0.00 437000 0.13

27/12/2019 Market Sale -6000 0.00 431000 0.13

31/12/2019 Market Sale -8260 0.00 422740 0.13

03/01/2020 Market Sale -2500 0.00 420240 0.12

10/01/2020 Market Sale -27130 -0.01 393110 0.12

17/01/2020 Market Sale -6000 0.00 387110 0.11

14/02/2020 Market Sale -130000 -0.04 257110 0.08

13/03/2020 Market Sale -10000 0.00 247110 0.07

20/03/2020 Market Sale -15000 0.00 232110 0.07


19 Supriya Prakash Sen (from 14/06/2019 till 02/10/2019) 0 0.00 No Change 0 0.00

20 Anuradha Pradeep (till 01/11/2019)



21 Suvendu Pati – RBI Additional Director (till 17/11/2019) 0 0.00 No Change 0 0.00

22 Sanjay Kumar Khemani (from 23/01/2020 till 19/03/2020) 0 0.00 No Change 0 0.00

Note:

1. Wherever the exact dates of Market purchase/sale are not available with us, we have considered the dates on which the statements of benefi cial ownerships are received by us from the depositories through Registrar.

2. Wherever there is change in the percentage but not shares, the same is on account of allotment of shares under Employee Stock Option Scheme and Preferential Issue during the year 2019-20.

3. The percentages in all cases are calculated with respect to the paid up capital of the Bank on that date.


143

V. INDEBTEDNESS:

Indebtedness of the Bank including interest outstanding/accrued but not due for payment.

(` in crore)

Secured Loans excluding deposits

Unsecured Loans

Deposits*Total

indebtedness

Indebtedness at the beginning of the fi nancial year

i) Principal Amount - 921.26 - 921.26

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - 19.18 - 19.18

Total (i+ii+iii) - 940.44 - 940.44

Change in Indebtedness during the fi nancial year

• Addition - 87.00 - 87.00

• Reduction - 268.17 - 268.17

Net Change - -181.17 - -181.17

Indebtedness at the end of the fi nancial year

i) Principal Amount - 755.70 - 755.70

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - 3.56 3.56

Total (i+ii+iii) - 759.26 - 759.26

* Since deposits accepted are in ordinary course of banking business, this disclosure is not applicable to the Bank.

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (Amount in `)

Sl. No.

Particulars of Remuneration

Shri Parthasarathi MukherjeeMD & CEO*

(01.04.2019 to 31.08.2019)

Shri S SundarMD & CEO**

(01.01.2020 to 31.03.2020)

Total Amount

1 Gross Salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 - 12,45,000.00 12,45,000.00

(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961 3,00,000.00 - 3,00,000.00

(c) Profi ts in lieu of salary under section 17(3) of the Income-tax Act, 1961 - - -

2 Stock Option - - -

3 Sweat Equity - - -

4Commission- as % of profi t- others, specify…

- - -

5Others (Entertainment Expenditure, Petrol Expenses, Insurance Premium Payment, Gratuity, Medical & PL Encashment)

12,41,844.00 4,35,000.00 16,76,844.00

Total (A) 15,41,844.00 16,80,000.00 32,21,844.00

Ceiling as per the Act

Being a banking company regulated by the Reserve Bank of India, the remuneration paid to whole-time directors are subject to prior approval of RBI. However, the remuneration paid are well within the overall ceiling as per the Companies Act, 2013

* Shri Parthasarathi Mukherjee: Salary for MD for the period from 01.04.2019 to 31.08.2019 has been waived by himself.** Shri S.Sundar: Appointed as Managing Director & Chief Executive Offi cer (Interim) w.e.f 01.01.2020.


144

B. Remuneration to other Directors:

Sl. No.

Particulars of RemunerationName of Director

(Shri /Smt.)Total Amount

(in `)

1. Honorarium Paid to Part-Time ChairmanB K Manjunath

12,00,000.00

Fee for attending Board/Committee Meetings 37,45,000.00

2. Independent Directors

• Fee for attending Board/Committee Meetings Y.N. Lakshminarayana Murthy 28,00,000.00

H.S. Upendra Kamath 31,15,000.00

Gorinka Jaganmohan Rao1 5,25,000.00

Shakti Sinha1 3,85,000.00

Satish Kumar Kalra1 4,20,000.00

Meeta Makhan2 1,75,000.00

Kusuma R Muniraju3 4,90,000.00

Supriya Prakash Sen4 3,85,000.00

Sanjay Kumar Khemani5 70,000.00

• Commission NIL

• Others, please specify NIL

Total (1) 1,33,10,000.00

3. Other Non-Executive Directors

• Fee for attending Board/Committee Meetings G Sudhakara Gupta 15,40,000.00

N Saiprasad 21,00,000.00

Raghuraj Gujjar1 4,55,000.00

K.R. Pradeep2 1,75,000.00

Anuradha Pradeep6 16,10,000.00

• Commission NIL

• Others, please specify NIL

Total (2) 58,80,000.00

Total (B)= (1+2) 1,91,90,000.00

Total Managerial Remuneration (A) + (B) 2,24,11,844.00

Overall Ceiling as per the Act Being a banking company regulated by the Reserve Bank of India, the remuneration paid to whole-time directors or part time chairman or any other directors are subject to prior approval of RBI. The remuneration paid to the MD & honorarium paid to Part-Time Chairman are well within the overall ceiling as per the Companies Act, 2013. No other directors are paid any remuneration.

1 Co-opted as Additional Director on 02.12.2019.2 Co-opted as Additional Director on 23.01.2020.3 Attained Superannuation on 19.06.2019. 4 Co-opted as Additional Director on 14.06.2019 and resigned on 02.10.2019. 5 Co-opted as Additional Director on 23.01.2020 and resigned on 19.03.2020.6 Resigned on 01.11.2019.


145

C. Remuneration to Key Managerial Personnel other than MD/MANAGER/WTD: (Amount in `)

Sl. No.

Particulars of Remuneration

Key Managerial Personnel

Shri S.Sundar Chief Financial Offi cer*

(01.04.2019 to 31.12.2019)

Shri N.RamanathanCompany Secretary

Total

1.

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

37,35,000.00 26,19,760.29 63,54,760.29

(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961 - - -

(c) Profi ts in lieu of salary under section 17(3) of the Income-tax Act, 1961

- - -

2. Stock Option - - -

3. Sweat Equity - - -

4. Commission- as % of profi t- others, specify…

- - -

5. Others (Employers’ Contribution to Provident Fund, Petrol Expenses, Entertainment Expenditure, Medical, Other taxable, LFC, Incentive)

- 7,08,571.50 7,08,571.50

Total 37,35,000.00 33,28,331.79 70,63,331.79

* Resigned on 31.12.2019.

VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:

Type

Section ofthe

CompaniesAct

BriefDescription

Details ofPenalty / Punishment /

Compounding fees imposed

Authority[RD /

NCLT/COURT]

Appeal made, if any(give Details)

A. COMPANY

Penalty

No penalty was levied under the Companies Act by any Authorities as prescribed. However, the Bank had been levied the following penalties by Reserve Bank of India at separate instances, which are given below:

The Bank was imposed a monetary penalty of ` 1.00 crore for non-adhering to IRAC norms observed in statutory inspection with respect to fi nancial position as on March 31, 2017.

The Bank was imposed a total penalty of ` 83,250/- on account of defi ciency like mutilated notes etc., observed in Soiled Notes remittances made by our currency chest transactions and incoginito visit by RBI offi cials to respective branch.

PunishmentNIL

Compounding

B. DIRECTORS

Penalty

NILPunishment

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

NILPunishment

Compounding


146

INTEGRATED TREASURYThe Ruby Towers – 6th fl oor,29, Senapati Bapat Marg, Tulsi Pipe Road, Dadar West (A-Wing), Mumbai 400 028Email: [email protected]: 022-40925100Fax: 022-40925181

BENGALURU No. 93, 2nd Floor, T.K.N. Mansion, K.H. Road (Double Road), Opp. to KSRTC Head Offi ce, Bengaluru - 560 027. Karnataka Email : [email protected] Phone : 080-46766310, 46766325

COIMBATORE LVB Platinum Jubilee Building, No. 68, Oppanakara Street, Ist Floor & IInd Floor, Coimbatore - 641 001 Tamil Nadu Email : [email protected] Phone : 0422-2385800, 2384004

HYDERABAD No. 2B & 2C, Ground Floor, Aditya Trade Centre, Lane Adjacent to Huda Mythrivanam, Ameerpet, Hyderabad - 500 038 Telangana Email : [email protected] Phone : 040-23759224, 23759211

MUMBAI The Lakshmi Vilas Bank Ltd., Regional Offi ce,The Ruby Towers – 6th Floor, (Unit-6N,29)Senapati Bapat Marg, Tulsi Pipe Road, Dadar West, Mumbai 400 028.Maharashtra. Email : [email protected] Phone : 022-40925000, 40925055

CHENNAI Plot No.136, 2nd Floor, P.M.Towers, Greams Road, Chennai - 600 006 Tamil Nadu Email : [email protected] Phone : 044-40064159, 40064160, 40064161

DELHI Flat. No. 29, Road No. 35, First Floor, West Punjabi Bagh,Near Shivaji Park Metro Station, New Delhi-110 026.. Email : [email protected] Phone : 011-45753412, 45753408

KARUR Registered Offi ce Building,2nd Floor, Salem Main Road, Kathaparai, Karur - 639 006 Email : [email protected] Phone : 04324-258501, 258412

REGIONAL OFFICES:

TECHNOLOGY CENTERNavin’s WSS Tower, 8th Floor, No.1, Langs Garden Road (Adithanar Salai), Pudupet,Chennai – 600 002.Email : [email protected] Phone : 044-66881201, 66881301


147

BRANCH OFFICESANDHRA PRADESH

1 Addanki - Vijayawada2 Adoni3 Amalapuram4 Anakapalle5 Ananthapur6 Ananthavarappadu7 Angalakuduru8 Annamayya Circle (Tirupathi)9 Bhavanipuram

10 Bhimavaram11 C.Kothapeta12 Chittoor13 Cuddapah14 Doddavaram15 Dommaranandyala16 Dondapadu17 Eluru18 Gajuwaka- Hyderabad 19 Gopalpatnam (Vizag)20 Governorpet ( Vijayawada)21 Guntur22 Gurunanak Colony - Vijayawada23 Jaggaiahpet - Vijayawada24 Kadiam25 Kakinada26 Kapavaram27 Kovvur28 Krishnapatnam29 Kurnool30 Lakshmipuram - Guntur 31 Lam32 Machilipattinam - Vijayawada33 Mangalagiri34 Marichetlapalem35 Markapur36 MVP Colony (Vishakapatnam)37 Nandigama38 Nandiyal39 Narasaraopet40 Narasipatnam - Vijayawada41 Nellore42 Ongole43 Palasa - Kassibugga44 Parvathipuram - Vijayawada45 Pedapulipaka46 Peddapuram - Vijayawada47 Piduguralla48 Ponnur49 Prodattur50 Rajamundri51 Ramachandrapuram-East Godavari52 Ravulapalem - Vijayawada53 Ring Road - Vijayawada 54 Salur - Vijayawada55 Sattenapalle - Vijayawada56 Sivakodu57 Srikakulam58 Sulthanagaram59 Tadepalli60 Tadepalligudam61 Tanuku62 Tenali63 Thimmapuram64 Thurputallu65 Tirupathi66 Vijayawada

67 Vinukonda68 Vishakapatnam69 Vizianagaram

CHATTISGARH70 Dhamtari71 Durg72 Mahasamund73 Raipur

GUJARAT74 Ahmedabad75 Anand76 Bharuch77 Gandhidham78 Gandhinagar79 Jamnagar80 Navasari81 Rajkot82 Sanand (Mumbai)83 Surat I84 Surat II85 Vadodara86 Vapi

HARYANA87 Faridabad88 Gurgaon89 Karnal90 Panipat

JHARKHAND91 Jamshedpur92 Ranchi

KARNATAKA93 Ballari94 Bagalkot - Bengaluru95 Banashankari (Bengaluru)96 Bangalore-main97 Bangarpet98 Bannerghatta Road – (Bengaluru) 99 Basavanagudi (Bengaluru)

100 Basaveshwaranagar (Bengaluru)101 Belgaum102 Bellandur (Bengaluru)103 Bommanahalli (Bengaluru)104 BTM Layout (Bengaluru)105 Byadgi (Bengaluru)106 Cantonment (Bengaluru)107 Channarayapatna108 Chikballapur109 Chitradurga110 City market (Bengaluru)111 Davangere112 Devanahalli (Bengaluru)113 Dharwad114 Gadag115 Hassan116 HBR – Layout – (Bengaluru)117 Honnasandra118 Hospet119 HSR Layout (Bengaluru)120 Hubli121 Jalahalli (Bengaluru)122 Jayanagar (Bengaluru)123 Kalaburagi

124 Kanakapura Main Road (Bengaluru)125 Karwar - Bengaluru126 Kengeri (Bengaluru)127 Kollegal128 Koramangala (Bengaluru)129 Langford Town (Personal Banking

Branch- Bengaluru)130 Malleshwaram (Bengaluru)131 Mandya132 Mangaluru133 Mudbidri134 Mysuru135 Puttur136 Raichur137 Rajarajeshwari nagar (Bengaluru)138 Ranebennur139 RT Nagar (Bengaluru)140 Shimogga141 Sirsi142 Thippasandra (Bengaluru)143 Tumakuru144 Udupi - Bengaluru145 Ulaibettu146 Ulsoor (Bengaluru)147 Vijayanagar (Mysuru)148 Vijayapura - Bengaluru149 Vishveswarapura (Bengaluru)150 Yadgir151 Yelahanka (Bengaluru)

KERALA152 Alappuzha153 Calicut154 Chalakudy155 Ernakulam (Cochin)156 Guruvayoor157 Kollam158 Kottayam159 Malapuram160 Palakkad161 Perumbavoor162 Thiruvananthapuram163 Thrissur164 Vavvakavu

MADHYA PRADESH165 Ashta166 Bhopal167 Indore168 Jabalpur

MAHARASHTRA169 Andheri (Mumbai)170 Boisar171 Borivili (Mumbai)172 Chembur (Mumbai)173 Fort (Mumbai)174 Ghatkopar (Mumbai)175 Kalyan (Mumbai)176 Kharghar (Mumbai)177 Kolhapur178 Matunga (Mumbai)179 Nagpur180 Nasik181 Nerul (Mumbai)182 Pune183 Thane (Mumbai)


148

184 Vasai (Mumbai)185 Vashi (Mumbai)

NEW DELHI186 Ashok vihar (New Delhi )187 Chandigarh (New Delhi)188 Jamukoli189 Janpath (New Delhi)190 Kalkaji (New Delhi)191 Karolbagh (New Delhi)192 Krishnanagar (New Delhi)193 Ludhiana194 Mahavir Nagar (New Delhi)195 Rohini (New Delhi)196 Shalimar Bagh (New Delhi)

ODISHA197 Bhubaneshwar198 Cuttack199 Jharsuguda (Delhi)200 Majhihara

PUDUCHERY201 Ambagarathur202 Karaikal203 Lawspet (Puduchery)204 Puducherry205 Reddiyarpalyam (Puduchery)

RAJASTHAN206 Bhilwara207 Jaipur

TAMILNADU208 Abhiramapuram(Personal Banking

Branch- Chennai)209 Adambakkam (Chennai)210 Adyar (chennai)211 Alathur212 Ambasamudram213 Ambattur (Chennai)214 Ambilikai215 Ambur216 Ammapet (Salem)217 Anaindaperumal Nadanur (Madurai)218 Anbil219 Anna Nagar (Chennai)220 Anna Nagar (Madurai)221 Annur222 Arakandanallur223 Arakonam (Chennai)224 Arantangi225 Arasappapillaipatti226 Arcot (chennai)227 Ariyalur228 Arni229 Aruppukkottai 230 Attur231 Avadi (Chennai)232 Avalpoondurai233 Ayothiapattinam (Salem)234 Balasamudram235 Bargur236 Batlagundu237 Bhuvanagiri238 Bibikulam (Madurai)239 Bodinayakanur240 Bye Pass Road, Madurai241 C. Pudupatti

242 C.K.Street (Salem)243 Cantonment (Trichy)244 Cathedral Road (Chennai)245 Chellapillaikuttai (Salem)246 Chengalpattu247 Chennai-Main248 Cheyyar (Chennai)249 Chidambaram 250 Chinna Salem251 Chinnadharapuram252 Chinthalavadi253 Chittode254 Chrompet (Chennai)255 Coimbatore - MAIN256 Cuddalore257 Cumbum258 Denkanikottai (Salem)259 Devakottai (Madurai)260 Dharapuram261 Dharmapuri262 Dindigul263 Eachanari(Coimbatore)264 Erode265 Four road ( Kumbakonam) - Karur266 G.N.Street (Chennai) 267 Ganapathy (Coimbatore)268 Gandhigramam (Karur)269 Gandhimanagar (Coimbatore)270 Gandhipuram (Coimbatore)271 Gingee272 Gobichettipalayam273 Gopalapatti274 Guduvancheri (Chennai)275 Gugai (Salem)276 Hastampatti (Salem)277 Hosur278 Idayakottai279 Iyyampalayam280 J.Veeranam 281 Jalakandapuram282 Jegadabi283 K K Nagar (Chennai)284 K.Vadamadurai (Coimbatore)285 Kachirapalayam286 Kadalangudi287 Kadambuliyur288 Kalangani289 Kallakurichi290 Kallalangudy291 Kambarasampettai292 Kancheepuram293 Kandili294 Kangayam295 Kangayam Road -TUP (Coimbatore)296 Kanjampatti297 Kanmai Soorangudi298 Karaikudi299 Karanodai300 Karur Main (Karur)301 Karur West (Karur)302 Kathaparai (Karur)303 Kattugudalur304 Kattuputhur305 Kavaraipettai (Chennai)306 Kaveripattinam307 KK Pudur (Coimbatore)308 Kodambakkam (Chennai)309 Kolappakam (Chennai)310 Kolathur (Chennai)

311 Kombai312 Kondalampatti (Salem)313 Kondamanaickenpatty314 Kondikulam315 Koodalnagar (Madurai)316 Kottivakkam (Chennai)317 Koundampalayam (Coimbatore)318 Kovaipudur (Coimbatore)319 Kovilpatti320 Krishnagiri321 Kulithalai322 Kumbakonam323 Kuniyur324 Kurumbapatti325 La Gudalur 326 Lakkapuram327 Lalgudi328 M.N.Palayam329 M.Puthur330 Madipakkam (Chennai)331 Madukkur North332 Madurai Main333 Mahadhanapuram334 Manamedu335 Manapparai 336 Mangarai337 Mannargudi338 Marakkottai339 Marandahalli340 Markkampatti341 Mathur (Erode)342 Mathur (Krishnagiri)343 Mayiladuthurai344 Mecheri345 Melur346 Melasheshamangalam347 Mettupalayam348 Mettur Dam 349 Michalpatti350 Mogappair (Chennai)351 Mohanur352 Moolangudi353 Moolapalayam(Erode)354 Mount Road (Chennai)355 Mowlivakkam(Chennai)356 Mudhugampatti357 Muthugapatty358 Muthupet359 Muthur360 Mylambadi361 Mylapore (Chennai)362 Nagankulam (Madurai)363 Nagapattinam364 Nagercoil365 NaickerNew Street ( Madurai)366 Namakkal367 Nathakadaiyur368 Nathamedu369 Nedumpuli370 Neelagiri (Thanjavur) - Karur371 Nerinjipettai372 Neyveli373 Nidur374 Nungambakkam (Chennai)375 Oddanchathram376 Olapalayam377 Ondipudur (Coimbatore)378 Othakadai(Madurai)379 P.Ayeepalayam


149

380 Palacode381 Palani382 Palayamkottai383 Pallipalayam384 Panruti385 Papanad386 Papanasam387 Pattukottai388 Peelamedu (Coimbatore)389 Pennagaram390 Perambalur391 Perambur(Chennai)392 Peravurani393 Periyakulam394 Perungalathur(Chennai)395 Podakudy396 Pollachi397 Pothuravuthanpatty (Karur)398 Pudukkottai399 Pugalur400 Puliyakulam(Coimbatore)401 Punavasal East402 Purasawalkam (Chennai)403 R S Puram(Coimbatore)404 R.Pudupatti405 Rajapalayam406 Rajendram407 Ramanathapuram408 Ramanathapuram (Coimbatore)409 Ramapuram(Chennai)410 Rasipuram411 Rayakotta412 Royapuram (Chennai)413 Saidapet(Chennai)414 Salem Town415 Saligramam (Chennai)416 Sambankulam417 Sankarapuram418 Sankari419 Sathyamangalam420 Sattur421 Seevalaperi (Satellite branch)422 Selaiyur (Chennai)423 Sendarapatti424 Senthamangalam (Salem)425 Shevapet (Salem)426 Siddhapudur (Coimbatore)427 Sikkal428 Sindalapatti429 Sirumayangudi430 Sivakasi431 South Masi Street(Madurai)432 Sriperumbudur(Chennai)433 Srirangam (Trichy)434 Srivilliputhur435 Sundarapandiam436 Suramangalam (Salem)437 Surandai (Madurai)438 Swarnapuri (Salem)439 T.Nagar (Chennai)440 Tanjore441 Tenkasi442 Thallakulam (Madurai)443 Thayanur444 Theni445 Thillai Nagar (Trichy)446 Thimmanandal447 Thindal 448 Thirukattupalli

449 Thirumangalam450 Thiruvaiyaru451 Thiruvallur(Chennai)452 Thiruvarur453 Thiruvidaikazhi454 Thittagudi455 Thokkavadi456 Thorapakkam (Chennai)457 Thottiyam458 Tindivanam459 Tirpur460 Tiruchengode461 Tirukadaiyur462 Tirukoilur463 Tirunelveli Town464 Tiruthuraipoondi465 Tiruvannamalai466 Tiruvottriyur (Chennai)467 Trichy (Main)468 Triplicane (Chennai)469 Turaiyur470 Tuticorin471 Udayamarthandapuram472 Udumalpet473 Ulipuram474 Unjalur475 Upilipalayam (Coimbatore)476 Uranganpatti477 Uttamarkoil(Trichy)478 Vadavalli(Coimbatore)479 Vadugapalayam480 Valasarawalkam (Chennai)481 Velacherry (Chennai)482 Vellakoil483 Velliyani484 Vellore (NA)485 Velur (Namakkal)486 Vengaivasal(Chennai)487 Vengamedu (Karur)488 Venjuvancheri(Chennai)489 Venkatakrishnapuram490 Vettavalam491 Vichoor (Chennai)492 Vilangudi493 Villapuram (Madurai)494 Villivakkam (Chennai)495 Villupuram496 Virudhunagar497 Vridhachalam498 West Mambalam (Chennai)499 West Tambaram (Chennai)500 Yethapur

TELANGANA501 A.S Rao Nagar (Hyderabad)502 Aswaraopet503 Adilabad504 Alwal - Secundrabad505 Ameerpet (Hyderabad)506 Asifabad507 Atevelle508 Banjara Hills (Hyderabad)509 Bhupalpalle (Hyderabad)510 Boduppal511 Chityala512 Habsiguda (Hyderabad)513 Hanumakonda514 Hyderabad Main515 Jadcherla

516 Jagtial517 Jammikunta (Hyderabad)518 Jangaon519 Karim Nagar520 Karmanghat (Hyderabad)521 Kesamudram (Hyderabad)522 Khammam523 Kompally524 Kothapeta (Hyderabad)525 Kukatpally (Hyderabad)526 Luxttipet (Hyderabad)527 Madhapur (Hyderabad)528 Malipuram (Hyderabad)529 Malkajgiri (Hyderabad)530 Mallemadugu531 Mancherial532 Mehabubnagar533 Mehdipatnam (Hyderabad)534 Miryalguda535 Nalgonda536 Navandgi537 New Gaddianaram (Hyderabad)538 Nizamabad539 Peruvancha540 PG Road (Hyderabad)541 Ponnal542 Punjagutta(Hyderabad)543 Ramachandrapuram (Hyderabad)544 Sadasivet (Hyderabad)545 Secundrabad (Hyderabad)546 Seethaphalmandi (Hyderabad)547 Sircilla(Hyderabad)548 Suryapet549 Vanasthalipuram550 Vikarabad(Hyderabad)551 Vikrampuri (Hyderabad)552 Warangal553 West Maredpally (Hyderabad)

UTTAR PRADESH554 Ghaziabad555 Noida

WEST BENGAL556 Garia557 Kolkata558 Kolkata - New Alipur559 Salt Lake-Kolkata

COMMERCIAL BANKING BRANCHES560 Bengaluru - Langford Town561 Chennai - Cenotaph Road562 Coimbatore - Avinashi Road563 Delhi - Karol Bagh564 Hyderabad - Srinagar Colony565 Karur - Kathaparai, Salem Main Road566 Mumbai - Fort Mumbai


150

A DECADE OF PROGRESS(Amount given in Lakhs)

Year 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

Paid-up Capital 9752.58 9752.58 9754.07 9756.07 17916.67 17946.16 19144.67 25599.38 31990.32 33671.38

Reserve & Surplus 79490.91 86083.93 91680.38 95603.85 137697.60 158413.25 194489.50 207167.45 157267.31 89309.12

Deposits 1114951.07 1411414.00 1561897.79 1857288.21 2196421.22 2543096.15 3055335.35 3330948.29 2927944.08 2144319.41

Advances 809442.28 1018867.97 1170279.56 1288918.96 1635201.90 1964373.90 2372891.14 2576820.17 2010325.93 1382789.04

Investments 351885.03 439511.80 432454.68 568867.76 605115.62 654540.46 865173.03 1076774.83 843016.53 538382.95

Net Profi t / Loss 10113.68 10702.22 9157.45 5965.55 13228.59 18023.58 25607.21 -58486.61 -89409.71 -83604.46

Number of Branches

274 290 291 361 400 460 481 548 569 566

Staff Position 2626 3054 3149 3292 3459 3565 4043 4623 4557 4349

Earning Per Share (`)

10.37 10.97 9.39 6.11 9.16 10.05 14.07 -28.29 -34.66 -25.16

Book Value (`) 83.23 90.14 92.88 100.16 82.48 88.70 102.74 84.39 53.48* 31.21*

Market Price 98.00 85.05 81.35 71.15 101.60 81.15 166.40 98.50 71.00 10.95

Dividend PerShare (`)

2.50 3.50 3.00 1.00 2.00 3.00 2.70 Nil Nil Nil

* Book value adjusted for DTA, intangible assets is ` 25.08 (31.03.2019) and ` (-)5.63 (31.03.2020).

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93rd ANNUAL REPORT 2019 - 2020

...THE LAKSHMI VILAS BANK LIMITED Notice is hereby given that the 93 rd (Ninety Third) Annual...

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Transcript of ...THE LAKSHMI VILAS BANK LIMITED Notice is hereby given that the 93 rd (Ninety Third) Annual...