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The Lakshmi Vilas Bank Ltd. is not traded on NSE in the last 5 days
The Lakshmi Vilas Bank Ltd. is not traded on BSE in the last 5 days



The Directors of your Bank have great pleasure in presenting this 89th Annual Report on the business and operations of your Bank together with the Audited Accounts for the year ended 31st March, 2016 (FY 2015–16).

Your bank registered appreciable growth in business volumes that compares very favorably with the industry average. The Bank attained total business of Rs. 45,074.70 crores in FY 2015–16 a growth of 17.64% over Rs. 38,316.23 Crores in FY 2014–15.

Deposits grew by 15.78%, from Rs. 21,964.21 Crores as at 31st March 2015 to Rs. 25,430.96 crores as at 31st March 2016, and total advances (net) expanded by 20.13%, from Rs. 16,352.02 Crores to Rs. 19,643.74 crores in FY 2015–16.

Of this, lending to Priority Sector rose from Rs. 5,849.89 Crores in the previous year to Rs. 7,349.81 Crores as on 31st March 2016.

Agricultural Advances rose to Rs. 3,086.15 Crores from Rs. 2,457.18 Crores and advances to Weaker Section exposure rose from Rs. 1,712.77 Crores to Rs. 1,772.02 Crores.

The Bank's exposures to sensitive sectors including Real Estate and Capital Market were maintained well within the regulatory As at the end of the year under review, the total investments (net) of the Bank stood at Rs. 6,545.40 crores as against Rs. 6,051.15 Crores as on 31st March 2015.

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


The Bank has posted an operating profit of Rs. 407.12 crores in FY 2015–16 against Rs. 368.41 Crores in the previous year FY 2014–15 registering a growth of 10.51%. The net profit for the year, after provisions and taxes, amounts to Rs. 180.24 crores as against Rs. 132.29 Crores recorded in 2014–15 recording a growth of 36.25%.


Your Board of Directors are pleased to recommend a dividend of Rs. 3.00 (30%) per share for the year ended 31st March, 2016 as against Rs. 2.00 (20%) per share for previous year ended 31st March, 2015. The total out go in the form of dividend, including taxes, will be Rs. 64.80 Crores.


Earnings per Share stood at Rs. 10.05 for the year ended 31st March, 2016 as compared to Rs. 9.16 as on 31st March, 2015. Book Value of the share, stood at Rs. 88.70 as on 31st March, 2016 as compared to Rs. 82.48 as on 31st March, 2015.


Net Owned Funds (NOF) of the Bank increased from Rs. 1,477.70 Crores as at the end of FY 2014–2015 to Rs. 1,591.86 Crores as at the end of FY 2015–2016, reflecting a growth of 7.73%.

The Capital Adequacy Ratio (CAR) as on 31st March 2016 as per BASEL III is 10.67%. The bank has been consistently maintaining Capital Adequacy Ratio well above the regulatory minimum of 9% stipulated by the Reserve Bank of India.

The Tier–I and Tier–II components of Capital Adequacy Ratio were comfortable at 8.69 % and 1.98% respectively.


Indian Banking industry continued to experience accretion of NPA in recent past. This has largely been attributed to the weak performance of the global as well as Indian economy, resulting in the deterioration of asset quality held by the banking sector.

This trend continued to persist to certain extent during this financial year also across the Indian banking sector. This position is expected to improve in the current year.

Against this backdrop, your bank has shown an improved performance in NPA management during the last financial year.

The percentage of Gross & Net NPA of your bank decreased to 1.97% and 1.18% respectively as on 31.03.2016 against the last year figure of 2.75% & 1.85%.

This was made possible due to the combined efforts put in by the employees, which yielded the desired results. Your Bank also sold some hard core NPAs to ARCs which also enabled the Bank to make substantial recovery from NPAs during the FY. Stressed accounts were upgraded through efficient recovery follow–up and cash recoveries were also significant during the period. Coordinated recovery efforts resulted in improved performance during the FY.

During the year, Credit monitoring has been strengthened and follow–up methodology was further improved which has resulted in a great reduction of slippage to NPA. Conducts of high value credit portfolio was under constant monitoring. Monitoring process has been aided by technology. Wherever stress was noticed, immediate remedial steps were taken and stressed assets were nurtured back to performing assets.


During the fiscal 2015–16, the Bank added 60 new branches to its network across the country and as on 31st March 2016, the Bank had a network of 459 branches, 1 satellite branch and 7 extension counters, spread across 16 states and the union territory of Pondicherry.

The Bank also has ATM network of 910 (327 Onsite & 583 offsite), in vital / major locations for better service to customers. The Bank continued to expand its distribution network, which remains an integral part of the Bank's strategy for tapping low–cost CASA deposits, lending to retail & SME segments and cross selling third–party products.

The Bank's focus is on customer ecstasy, by maintaining a high degree of service. The bank has a strong and wide base in the Southern states of India and is focusing on retail and SME sector, by rendering high–tech services.


Financial inclusion may be defined as the process of ensuring access to financial services to vulnerable groups such as weaker sections and low income groups at an affordable cost and providing timely and adequate credit where needed. The essence of financial Inclusion is to ensure that a range of appropriate Basic financial services are made available to every individual and enabling them to understand and access those services.

The bank has implemented the financial inclusion plan in 356 Villages & wards allotted by SLBC in Tamilnadu. The Bank has opened 160513 Basic Savings Bank Deposit Accounts (BSBDA) including 81297 accounts under Prime Minister Jan Dhan Yojana (PMJDY).


Dollar remained strong for better part of the Financial Year 2016. However, the rally in dollar reversed post Federal Reserve Meet in March 2016 where it was hinted of two rate hikes in 2016, down from the four predicted at the December meeting. Emerging Market currencies including Indian Rupee rallied after the Federal Reserve statement. Indian Rupee reversed its weakening trend and started gaining post Federal Budget.

During the year under the report, the Bank achieved a foreign exchange turnover of Rs. 5,219.18 Crores as against Rs. 4,560.82 Crores in the previous year. The outstanding advances to export sector stood at Rs. 292.43 Crores as on 31st March 2016. Going ahead, we expect the business to improve significantly with up–gradation of more branches to undertake foreign exchange business.


Bank concluded its Transformation project with EY. Many exercises during the course of the project cycle were initiated and completed. Some more suggestions were accepted and are in the process of being implemented. Bank will now take forward the transformation exercise with an internal Transformation Team under the guidance of Top Management.

In the journey of Transformation, Bank successfully enhanced the business in the selected 30 Branches and now will be replicating the same approach in about 70 more branches this year. The team will work closely with various Departments on the suggestions made by EY plus other suggestions coming from various internal sources. These initiatives are expected to not only enhance the business numbers but also enable the staff at various levels to perform well with a focused approach with clearly drafted KRA/KPI of every individual role.

Going forward a Team of 3 Officers under Leadership of SVP (Transformation) will work closely on the implementation and a core team of Top Management Headed by the MD & CEO will monitor the progress regularly.


LVB CROWN Services launched for high net–worth customers in FY16 got off to a robust start with very positive response from customers. In the first year, we have added over 5,665 customers to our CROWN portfolio. These esteemed customers have a Savings Bank book of over INR 246 Crores. With a growing customer base, CROWN Connect Engagement Programs are being conducted for customers in Branches, as well as through specific events. These programs aim at keeping us well connected with our customer, at the branch level. Our teams are also advising customers on Third Party Products like Life Insurance, Health Insurance, as well as investment in Mutual Funds, especially through SIPs. We have 3 CROWN lounges at present, one each at Bangalore, Hyderabad, and Chennai. We have plans to increase many more lounges in FY 2017. In the coming year, we would extend LVB CROWN Services to NRI and Business relationships also. LVB CROWN will be the focus for delivering superior, differentiated offerings to our customers in FY 2017.


The Equity Shares of the bank are listed with the National Stock Exchange of India Ltd, Mumbai and Bombay Stock Exchange, Mumbai which is enhancing the liquidity of your equity shares.


Your bank has launched user friendly mobile banking App "LVB Mobile" in all three major mobile platforms – viz, Android, Windows and Apple–IOS. You can do funds transfer (RTGS, NEFT, IMPS), set financial limit for all your transactions, do all kinds of recharges, manage and pay utility bills, request cheque books, block your debit card using "LVB Mobile" .

Your bank has introduced Welcome kit to facilitate the customer to commence using our services / alternate delivery channels as soon as the Savings Account is opened and to reduce TAT (Turnaround Time) for on–boarding customers.

Your bank has deployed Cash Deposit Machine at various locations to enable you to deposit the cash in your bank account at any time 24 X 7 X 365 without visiting the branches.

Your bank has also introduced EMV chip based debit cards for additional security as per RBI guidelines.

Information Security:

Your bank has implemented various security measures as per RBI Guidelines (Gopalakrishna Committee Recommendations) to protect the interest of customers/public. The robust security measures like two factor authentication, One Time Password (OTP), Public Key Infrastructure (PKI) were implemented to enable the customers to perform the financial transactions through Internet Banking, ATM, POS and Mobile banking applications. Your Bank has implemented the Business Continuity Plan (BCP) across the Bank to ensure uninterrupted services to the customers during any disaster.

Technology Awards:

Your bank has won "Best bank award for Managing IT Infrastructure among small banks" from IDRBT "Institute of Development and Research in Banking Technology"– (established by RBI).

Your bank has also bagged CIO100 award from M/s. IDG Media Pvt. Ltd. for implementing private cloud technology.


i. Life Insurance: Bank has tied–up with Max Life Insurance Company Ltd (MLI) to offer Life Insurance products to the customers.

ii. General Insurance: Bank has tied–up with M/s. Future Generali India Insurance Company Ltd for General Insurance business distribution.

iii. Health Insurance: Bank has tied up with M/s. Cigna TTK Standalone Health Insurance Company Ltd to offer Health Insurance Products to the customers.

iv. LVB SBI Co–Branded Credit Cards: Bank has tied up with M/s. SBI Cards and Payment Services Pvt Ltd (SBICPSL) and offering cobranded credit card to the customers and employees of the bank.

v. Mutual Funds & PMS: The Bank is presently having tie–up with thirteen leading Asset Management Companies for promoting various Mutual Fund schemes. In addition, we are promoting Port Folio Management Services (PMS) through UTI, Reliance and Sundaram Asset Management Company.

vi. Money Transfer through Branch Channels: Foreign inward remittances arrangement with M/s. Weizmann Forex Ltd. for extending Western Union Money Transfer facility, in addition, tied–up with M/s. UAE Exchange & Financial Services Ltd., for offering Global Money Transfer services through Xpress Money and Moneygram.

vii. Money Transfer through Direct Remittances: Tied up with Times of Money – Remit 2 India for Inward remittance from Abroad, this enables the NRIs to directly remit the amount to their account / residents.

viii. Investment & Infrastructure Bonds: Bank empanelled with M/s Bajaj Capital Ltd. for promoting Investment & Infrastructure Bonds.

ix. PAN Card Services: Bank has tied up with M/s. UTI Infrastructure & Technology Services Ltd., (UTIITSL) as PAN Service Agent (PSA) for collecting the PAN Application across the country through Branches.

x. Depository Participant Services: Registered as Depository Participant with NSDL and with necessary clearances, this product is offered to our customers.

xi. Online Trading Services: Bank has tied up with M/s. IDBI capital Market Services Ltd & Way2Wealth Brokers Private Limited for offering online trading services to the customers.

xii. New Pension System (NPS): Bank has registered with PFRDA and NSDL for NPS and recently enabled the eNPS facility also for subscribers.

xiii. ASBA: As Bankers to the issue, the Bank can now receive applications under ASBA mode thus enabling the investors to earn interest till allotment of securities.

xiv. Prime Minister Social Security: Bank has successfully launched the Prime Minister Jeevanjyoti Bima Yojana, Prime Minister Suraksha Bima Yojana and Atal Pension Yojana.

16. RISK:

Risk is an integral component of the activities of any bank. Risk management is an attempt to identify, to measure, to monitor and to manage uncertainty. It is not only a requirement under several voluntary codes and statutes but also make business sense to identify the probability of not achieving strategic and business goals. Risk Management has to be embedded in business processes to ensure that it is being practiced and made part of the culture of the organization. With this in mind, the bank has established systems and policies ensuring an ongoing assessment of relevant risk types on an individual basis and in the aggregate as well.

The Bank's Board ensures that the risks are managed appropriately through laid down policies and effective systems. A Board Level Committee oversees the implementation of Credit risk, Market Risk and Operational Risk policy prescriptions. The Asset Liability Management Committee (ALCO) looks into the management of Liquidity and Market risk and ensure adherence to the prudential limits. At Executive Level also, a committee consisting of Top Executives reviews periodically Liquidity Risk, Credit Risk & Market risk to take stock of the current situation. At the organization level, an Integrated Risk Management Department is headed by Senior Vice President and it is functioning at Corporate office to identify measure, monitor and reduce risk; optimize returns and assess the required capital level. Bank has already automated the process of capital calculation and Base rate as per RBI Guidelines. Bank has

a robust credit risk assessment system to ascribe borrower risk grades. This facilitates data collection and analysis for moving towards Advanced Approaches. Bank has in place well defined Frame work for managing Market Risk. Basic Indicator Approach has been adopted for computation of capital charge for Operational Risk.

The Bank has migrated to Basel III in a phased manner (as per RBI guidelines) from April 2013 onwards and is preparing ICAAP document to assess its inherent risk and capital requirements. Bank is doing the Stress Testing as per the revised guidelines issued by RBI during December 2013 and Scenario Analysis for various risks as required under Pillar II for enhancing risk assessment and to provide the bank, a better understanding of the likely impact even in extreme circumstances. Technology is extensively used in measuring and discussing market risk using statistical tools including stress testing.


Bank has a separate Audit and Inspection Department, which subjects all the branches of the bank besides the Treasury, Currency Chests, Service Branches, Regional Offices and every department of the Corporate Office, to regular inspection. All the branches are subjected to IS Audit. Key Functional areas including Integrated Treasury at Mumbai, Central Processing Cell, Chennai, Lotus– CPC, Karur and 102 branches are under Concurrent Audit which covers 59.00% of the total Deposits and 78.00% of the total Advance of the Bank.

Audit Committee of the Board constituted in line with RBI guidelines and as per the requirements of SEBI, reviews the adequacy of the audit and compliance functions, including the policies, procedures and techniques.


The Staff strength of the Bank was augmented during the year 2015–16 with recruitment of 17 Executives, 155 Officers, 125 Junior Officers & 20 Sub–staff. Further, 446 Sales Personnel were also engaged to boost sales. Promotion to higher scale and cadre were rolled out and 262 staff got promoted across different cadres. Total number of employees as on 31.03.2016 was 3565 as against 3459 as on 31.03.2015.

The Bank's focus on training the human resources on a continual basis gained momentum by conducting online e–learning exercise duly leveraging technology. Bank has trained considerable number of resources in offsite training programmes conducted by reputed institutions such as RBI, CAB, SIBSTC, IDRBT, NIBM & FEDAI.


Disclosure under Section 186 of the Companies Act, 2013 does not apply to Banking Company.


There were no related party transactions during the year under review and Form AOC–2 is not applicable to the Bank. During the FY 2015–16, 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

21. OUTLOOK 2016–17:

The Indian economy is on the brink of a major transformation, with several policy initiatives set to be implemented shortly. Positive business sentiments, improved consumer confidence and more controlled inflation are likely to prop–up the country's the economic growth. Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to provide further impetus to growth. All these factors suggest that India's banking sector is also poised for robust growth as the rapidly growing business would turn to banks for their credit needs.

Also, the advancements in technology have brought the mobile and internet banking services to the fore. The banking sector is laying greater emphasis on providing improved services to their clients and also upgrading their technology infrastructure, in order to enhance the customer's overall experience as well as give banks a competitive edge.

Envisaging profitable growth is the prime vision of any organization and our bank is no exception. Study on profitability from all varied angles ultimately reaches to a common consensus that, reduction in cost of deposits and operating expenses is the need of the hour.

We expect that RBI has room to cut its policy repo rate over fiscal 2017, given projections of inflation. Coupled with gradual economic and investment recovery and funding needs for auction proceeds, bank credit growth is likely to be in the 20% range in fiscal 2017;

we expect similar growth in deposit also.

Banking industry, in its attempt to guard against high cost funds have been focusing on CASA (Current Account Saving Account) to save profit margins. High proportion of low–cost deposits builds a bank's ability to reduce its cost of funds. For the fiscal 2016–17, the bank envisages a higher CASA composition to total deposits.


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 specified in SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. All the Directors on the Board have executed deed of covenant and undertaking individually in line with the recommendations of Dr. Ganguly Committee Report.

Further pursuant to SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, 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 Annual General Meeting and the number of directorships held by them along with the details of Audit Committee and Stakeholders Relationship Committee are furnished in Annexure–C, including composition of the Audit Committee. General Shareholders' information is furnished in Annexure–D.


During the financial year, the Board met 12 times. The Board meetings were held in accordance with the provisions of the Companies Act 2013. The details of the meetings held are provided in the Corporate Governance Report that forms part of this Annual Report.


According to the Articles of Association of our Bank, the number of Directors of the Bank shall not be less than nine and more than twelve and not less than fifty–one percent of the total number of Directors shall be persons who satisfy the requirements of Section 10A of the Banking Regulation Act. 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 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 prior due diligence in line with the regulatory advice given by RBI, SEBI and MCA by way of Circulars / Guidelines / Regulations / Act. The Nomination and Remuneration Committee of the Board has formulated evaluation criteria for the appointment or re–appointment of directors. The Managing Director and CEO is paid remuneration as approved by the RBI but is not paid sitting fees. Other than the MD&CEO, no other directors are paid any remuneration apart from sitting fees. The details of remuneration of the MD&CEO and that of the sitting fees paid to the directors are available elsewhere in the report. 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 CODEOFCONDUCT.pdf. The MD&CEO, CFO and Company Secretary are the Key Managerial Personnel (KMPs) of the Bank, as stipulated by the Companies Act, 2013. Other than MD&CEO, there is no other whole time director in the bank.


The Company 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 the section 146(6) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and the Company has also obtained the 'Fit and Proper' declaration as prescribed by the Reserve Bank of India.


Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, yearly performance evaluation of the Board as a whole and that of the individual directors and of various committees of the Board are duly conducted. The Nomination and Remuneration Committee of the Board had formulated definite criteria for evaluation of Independent Directors and the Board.

The Independent Directors, in their separate meeting had considered and evaluated the performance of the Board, the Chairman and the other non–independent Directors in the Board. The Board has taken note of the evaluation made by the Independent Directors and has also evaluated the performance of the Board, the Committees and the individual Directors taking into account the criteria formulated by the Nomination and Remuneration Committee.

The Board has also considered the participation by the members in the meetings of Board and its Committees, the composition and diversity of Board, the various Committees of the Board and its role play, the familiarization program given to the directors, the appropriateness of the decisions made, the quality, quantity and timeliness of flow of information to the Board, the positive contribution of the individual Directors who come from a professional background and the quality suggestions and guidance given by them through their participation in the meetings with an understanding of the business of the Bank and an understanding of their role and responsibilities and the overall effectiveness, the broad based discussions at Board / Committee Meetings, the understanding of the regulatory requirements, the contribution of the Board and the Committees to the specific strategies drawn and the overall growth of the bank. The evaluation of the individual Directors was done in absence of the Director being evaluated.


Resignations / Cessation of tenure of appointment:

Shri.Rakesh Sharma, Managing Director & CEO has resigned from the Bank with effect from 09.09.2015 as he got appointed as MD&CEO of Canara Bank.

Shri. Vivek Deep's term of appointment came to an end vide RBI letter dated 12.02.2016. He served on the Board for more than 1 year.

Shri.Parthasarathi Mukherjee was appointed as Managing Director & CEO of the Bank by RBI vide its letter no.

DBR.Appt.No.7973/08.44.001/2015–16 dated 18.12.2015 as per Section 35B of BR Act, 1949 for three years from date of his taking charge. Shri.Parthasarathi Mukherjee assumed office as Managing Director and CEO of our Bank on 25.01.2016.

Shri. Suvendu Pati, General Manager, RBI was appointed as Nominee Director by the RBI on 12.02.2016 for a period of two years or till further orders whichever is earlier.


Shri. N. Malayalaramamirtham, Director will be retiring by rotation at the ensuing 89th Annual General Meeting and being eligible, offers himself for re–appointment.

Key Managerial Personnel:

Shri. Rakesh Sharma, Managing Director & CEO, resigned from the Bank on 09.09.2015 and Shri.Parthasarathi Mukherjee took charge as Managing Director & CEO on 25.01.2016.

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



The Board of Directors of your Bank confirms that in the preparation of the annual accounts for the year ended March 31, 2016:

• 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 financial year and of the profit and loss of the Company for that period.

• The Directors had taken proper and sufficient 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 financial controls to be followed by the company and that such internal financial 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.


Your Bank as a responsible corporate citizen has been supporting various philanthropic activities by donating to such initiatives to the tune of Rs.13.51 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 profit 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 The Annual Report on the CSR activities undertaken during the year as per the format specified by the Ministry of Corporate Affairs is forming part of this Report and is annexed to this Report as Annexure E.


Pursuant to Section 134(1)(a), the extract of Annual Return in Form MGT 9 as provided under Sub–Section (3) of Section 92 is appended to this Annual Report as Annexure F.


The disclosures pursuant to the provisions 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–G.


In the year 2010, the shareholders of the Bank have approved the issue of shares through Stock Option Scheme. As on 31.03.2015, options in force were 545000, of which 295000 shares were exercised during 2015–16 and the remaining options expired. Thus as on 31.03.2016, the options in force are NIL. The ESOP granted to Shri. Parthasarathi Mukherjee, Managing Director & CEO is subject to the approval of RBI, which is awaited. Statutory disclosures regarding ESOS have been furnished in the Annexure H to this report and can be viewed at


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 continued to encourage the country's exports and will endeavor to enlarge its export financing.


There were no material changes and commitments 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.


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–defined 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 senior Executives of the Bank, a lady Law Officer 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). Number of complaints pending as on the beginning of the financial year – Nil Number of complaints filed during the financial year – Nil Number of complaints pending as on the end of the financial year – Nil


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. Large scale corporate frauds had necessitated, internationally, various legislative measures for safeguarding public interest through enactments.

As a proactive measure for strengthening financial stability and with a view to enhance public confidence in the robustness of the financial 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 2015–16, no personnel has been denied access to the audit committee. The Web link thereto is


Pursuant to the Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Bank has to conduct 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, the details of the familiarisation programme conducted is disclosed in the website of the Bank and can be viewed at


The Bank has formulated a Code of Conduct pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015 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 Insider_Trading.aspx


Statutory Auditors:

The Statutory audit of the Bank was carried out by M/s. R. K. Kumar & Co, Chartered Accountants, Chennai whose report is annexed and forms part of this report. The Statutory Central and Branch Auditors have audited all the branches and other offices of the Bank. With regard to the observations made by the Auditors 'without qualifying' their report dated 27.04.2016, our response to the same are furnished hereunder:–


Quote: "We draw attention to Note No.2.4.4.C of the financial statements, regarding deferment of loss of Rs. 95.60 Crore on sale of advances to Asset Reconstruction Companies.

Our opinion is not qualified in respect of this matter".


RBI vide its circular no.DBR.No.BP.BC.94/ 21.04.048/2014–15 dated 21.05.2015 has extended permission to Banks to provide the net shortfall on account of sale of assets up to 31.03.2016 to Asset Reconstruction Company over a period of two years. Consequently, Rs. 76.33 Crores (previous year Rs. 27.43 Crores) has been charged to Profit & Loss account for the year ended 31st March 2016.

The unamortized amount on this account as on 31st March 2016 is Rs. 95.60 Crores (previous year Rs. 72.99 Crores)

Secretarial Auditor:

Pursuant to the provisions of Companies Act 2013, the Bank has appointed Mr. K. Muthusamy, Practising Company Secretary, Coimbatore (CoP 3176) as the Secretarial Auditor for the FY 2016. The Secretarial Audit Report dated 27.04.2016 is annexed to this report as Annexure – I. There are no qualifications, reservation or adverse remark or disclaimer in the report.


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 Officers' Association for their support in delivering a significantly improved performance and look forward to a more evolved relationship as steps is taken to re–orient the bank for the future.

For and on behalf of the Board of Directors


Chairman of the Meeting

Parthasarathi Mukherjee

Managing Director & CEO

Place : Bengaluru

Date : 06.05.2016

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