The Board of Directors has pleasure in presenting the Bank's Annual Report along with Audited Balance Sheet and Profit and Loss Account of the Bank for the year ended 31st March 2019.
Business Operations
The Business of the Bank stood at र4,04,194.84 crore as on 31st March 2019 as against र3,55,552.07 crore as on 31st March 2018. Total deposits of the Bank stood at र2,32,645.38 crore. The gross advances as at end-March 2019 stood at र1,71,549.46 crore. The Credit deposits ratio of the Bank, as at end-March 2019, stood at
73.77%. The Bank ensured adequate flow of credit to the productive sectors of the economy. The Loans & Advances portfolio of the Bank is well diversified and balanced.
Key Highlights of Bank's Performance in FY 2018-19
• During the financial year 2018-19, the Govt. of India infused capital aggregating to र6686 crore in the Bank. The Bank also raised capital of an amount upto र250 crore from its employees under ESPS Consequently, the Capital Adequacy of the Bank improved to 12.73% as on 31st March 2019 from 10.50% as at 31st March 2018.
• The restrictions imposed on the Bank by RBI under the PCA framework were lifted on 31st January 2019 in view of its improved performance and the Bank meeting the benchmark levels as per the PCA framework.
• The Bank reported Net Profit of र55 crore for FY 2018-19 as against loss of र5872 crore for FY 2017-18.
• The Gross NPA reduced from 17.63% as at 31st March 2018 to 12.66% as on 31st March 2019 while the Net NPA declined from 10.48% as at 31st March 2018 to 5.93% as on 31st March 2019.?? The deposits of the Bank witnessed a growth of 12.20% y-o-y and the gross advances increased by 15.75% y-o-y. CASA deposits as a percentage of total deposits of the Bank stood at 29.40% as on 31st March 2019.
• Retail Advances Portfolio increased by 41.62% y-o-y and MSME Advances Portfolio increased by 12.63% y-o-y.
• Cash Recovery and Upgradation increased from F3161 crore for FY 2017-18 to र6597 crore for FY 2018-19 while fresh slippages were contained to र7066 crore during the reported year against र12429 crore of FY 2017-18.
• The Provision Coverage Ratio improved to 75.84% as on 31st March 2019 from 64.07% as at 31st March 2018.
• NIM for FY 2018-19 increased to 2.73% from 2.18% for FY 2017-18.
• The Cost of Deposits decreased to 5.64% as at March 2019 from 5.67% as at March 2018, while yield on Total advances increased to 8.23% as at March 2019 from 7.73% as at March 2018.
Capital & Reserves
During the Financial Year 2018-19, the Bank received capital infusion from the Government of India in two tranches viz. र5500 crore on 31st December 2018 and र1186 crore on 31st January 2019. Accordingly, upon receipt of all requisite approvals, the following shares were allotted to the Government of India on Preferential basis: (i) 57,23,20,499 equity shares at an Issue price of र96.10 (including premium of र86.10) per share aggregating to र5500 crore
Financial Performance
The Bank has posted a total income of र20,536.77 crore during the year as against र20,181.25 crore last year. The Operating Profit of the Bank increased to र3753.76 crore for the year ended 31st March 2019 as against र3,703.18 crore for the year ended 31st March 2018. The Financial performance of the Bank is given below:-
(Amt. in र crore)
*Figures in bracket () denote loss.
** The figures of the previous period/year have been regrouped/ rearranged, wherever considered necessary, to conform to current period/year's classification.
Board of Directors
During the year FY 2018-19, 14 meetings of Board of Directors, 12 meetings of Management Committee of Board and 12 meetings of Audit Committee of Board, were held. Sh. Himanshu Joshi was Executive Director of the Bank till the date of his superannuation i.e. upto 31st October 2018. Thereafter, Shri Vijay Dube and Shri Balakrishna Alse S were appointed in accordance with Section 9(3)(a) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 and they assumed charge as Executive Directors of the Bank on 01st November 2018 and 26th December 2018, respectively. Shri S.M. Narasimha Swamy recently joined the Bank as RBI Nominee Director in place of Shri S. Ganesh Kumar w.e.f. 26th April 2019. Further, Smt. Mala Srivastava, Part-Time Non-Official Director of the Bank laid down office on 24 th April 2019 on completion of her tenure.
The Bank places on record its appreciation for the guidance received from Shri Himanshu Joshi, Smt. Mala Srivastava and Shri S. Ganesh Kumar during deliberations of the Board/Committees of the Board and also in the conduct of the Bank's business during their tenure of office as Directors of the Bank.
Statutory Audit
During the year, the Bank has with the approval of the Reserve Bank of India appointed M/s B C Jain & Co., Kanpur; M/s S N Dhawan & Co. LLP, New Delhi; M/s S.P. Chopra & Co., New Delhi; M/s Batra Deepak & Associates, New Delhi as Statutory Central Auditors of the Bank for FY 2018-19.
Explanations/Comments by the Board of Directors in response to ModifiedOpinion/Adverse Remarks/Emphasis of Matter, if any, in the Independent Auditors' Report
N.A.
Secretarial Audit
Pursuant to Regulation 24A of the SEBI Listing Regulations read with SEBI Circular dated 08th February 2019, the Board of Directors appointed M/s. Agarwal S. & Associates, Company Secretaries, as the Secretarial Auditor to conduct Secretarial Audit of the Bank for the financial year ended 31st March, 2019. The Secretarial Audit Report of the Bank is annexed to this Report.
Explanations/Comments by the Board of Directors in response to observation, if any, in the Secretarial Audit Report
In respect of observation made by M/s. Agarwal S. & Associates, Company Secretaries in the Secretarial Audit Report for FY 2018-19 w.r.t. the composition of the Board of Directors of the listed entity in view of vacancies under section 9(3)(e),(f) & (h) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, it is stated that in terms of Section 9(3) of the aforesaid Act, all the directors on the Board are appointed /nominated by the Central Government other than three directors elected by the shareholders of the Bank (other than Central Government). The Bank has through various communications requested the Ministry of Finance, Govt. of India from time to time to nominate directors in respect of the existing vacancies. Further, the position of existing vacancies on the Board is also being apprised to the Ministry on monthly basis.
Corporate Social Responsibility
Bank's aim is to minimize the impact of business on the environment, have a positive effect on society and seek to work with other NGOs or non-profit charities, development agencies, organizations etc. who embrace these objectives. We aim to use natural resources responsibly, work with community projects and encourage and educate our employees in these goals. Staff members are encouraged to make contributions by understanding the aspirations of underprivileged sections and endeavoring to evolve measures to remove indisputable social and development lacunae. Under the community service various welfare and social activities are undertaken by the Bank both in Banking and non-Banking areas to raise the quality of life of the downtrodden and under privileged sections of the society.
CSR initiatives undertaken by the Bank in FY 2018-19
The Bank undertakes various CSR activities on an ongoing basis which includes training programs at RSETIS for self employment generating activities etc. Bank has also sanctioned TATA ACE TEMPO as a part of community services to NGO for providing assistance to poor and needy.
Directors' Responsibility Statement
The Directors confirm that, in preparation of the Annual Accounts for the year ended 31st March, 2019: the applicable accounting standards have been followed along with proper explanation relating to material departures, if any, the accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied, reasonable and prudent judgment and estimates were made so as to give true and fair view of the state of affairs of the Bank at the end of financial year and of the profit and loss of the Bank , for the year ended on 31st March, 2019, proper and sufficient care was taken 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 Bank and for preventing and detecting fraud and other irregularities.
Internal financial controls were laid down and these were adequate and operating effectively Proper systems were in place to ensure compliance of all laws applicable to the Bank and these were adequate and operating effectively. The accounts have been prepared on a going concern basis.
Acknowledgments
The Board of Directors expresses its gratitude to the Government of India, Ministry of Finance, Department of Economic Affairs, Reserve Bank of India (RBI), Securities and Exchanges Board of India (SEBI) and other Government & Regulatory Agencies for their valuable guidance and continued support provided to the Bank throughout the year. The Board of Directors are also grateful to the valued customers, esteemed stakeholders and also wish to place on record its great appreciation of the staff members for their involvement and dedication in the overall development, growth and prosperity of the Bank.