The Board of Directors have pleasure in presenting the Bank's Annual Report along withaudited accounts for the financial year ended 31 st March 2018.
The Business of the Bank stood at Rs. 355552.07 crore as on 31.03.2018 as against Rs.385777.25 crore as on 31.03.2017. Total deposits of the Bank stood at Rs. 207346.06crore registering a decline of 5.47%. The gross advances as at end-March 2018 stood atRs. 148206.01 crore registering a decline of 10.95%. The Credit deposits ratio of theBank as at end- March 2018 stood at 71.50%. The Bank ensured adequate flow of credit tothe productive sectors of the economy. The Loans & Advances portfolio oftheBankiswelldiversifiedand balanced. The Bank's retail credit increased by 17.03% duringFY 2017-18. Net interest margin for FY 2017-18 was 2.19% as against 2.42% for FY 2016-17.
CAPITAL & RESERVES
Pursuant to the PSB Reforms Agenda of Govt. of India the shareholders of the Bank inthe Extraordinary General Meeting held on 15.03.2018 approved through special resolutionthe issue and allotment of 286597110 equity shares of face value of Rs. 10/- each tothe Government of India @ Rs. 124.60 per share (including premium). The Bank received asum of Rs. 3571.00 crore on 27.03.2018 as contribution of the Central Government forpreferential allotment of equity shares and the allotment was effected on 28.03.2018 uponreceipt of all regulatory approvals. Accordingly during FY 2017-18 the Paid-up capitalof the bank increased by Rs. 286.60 crore and Share Premium by Rs. 3284.40 crore. TheCapital & Reserves as on March 31 2018 were at Rs. 11786.76 crore as against Rs.14121.36 crore as at end March 2017 and the ratio of Capital & Reserves to averageworking funds stood at 4.64 % as on 31.03.2018 as against 5.87% as on 31st March 2017.During the year the Bank has redeemed four series of Basel III Compliant Additional TierI Bonds aggregating to Rs. 3000.00 crore upon exercise of Call Option by the Bank underRegulatory Event'.
CAPITAL ADEQUACY RATIO
The Bank's Capital Risk Weighted Assets Ratio (CRAR) as on 31.03.2018 under Basel IIIGuidelines stood at 10.50 % as against 11.64% as on 31.03.2017.
The Bank has posted a total income of Rs. 20181.25 crore during the year as againstRs. 21187.85 crore last year. The Operating Profit of the Bank stood at Rs. 3703.18crore for the year ended 31.03.2018. The Bank has incurred a net loss of Rs. 5871.74crore during the fiscal 2017-18.
The Financial performance of the Bank is given below:-
| ||(Amt. in Rs. crore) |
| ||31.03.2018 ||31.03.2017 |
|Interest Income ||17398.89 ||18422.33 |
|Other Income ||2782.36 ||2765.52 |
|Total Income ||20181.25 ||21187.85 |
|Interest Paid ||12888.13 ||13512.83 |
|Operating Expenses ||3589.94 ||3504.89 |
|Total Expenses ||16478.07 ||17017.72 |
|Profit Operating ||3703.18 ||4170.13 |
|Provisions & Contingencies ||9574.92 ||5264.20 |
|Net Profit/(Loss) for the Year before ||(5871.74) ||(1094.07) |
|Exceptional Item || || |
|Less: Exceptional Item ||0.00 ||0.00 |
|Net Profit/(loss) for the year after Exceptional Item ||(5871.74) ||(1094.07) |
|Add-Profit brought forward ||0.00 ||0.64 |
|Add-Investment Reserve Account ||0.00 ||11.54 |
|Net Profit/ (loss) available for appropriation ||(5871.74) ||(1081.89) |
|APPROPRIATION || || |
|Transferred to Statutory Reserve ||0.00 ||0.00 |
|Transferred to Revenue and Other reserves ||0.00 ||(1081.89) |
|Transferred to Special Reserve u/s 36(1)(viii) of the Income Tax Act 1961 ||0.00 ||0.00 |
|Transferred to Capital Reserve ||0.00 ||0.00 |
|Transferred to Investment Reserve ||0.00 ||0.00 |
|Account || || |
|Interim Dividend ||0.00 ||0.00 |
|Proposed Dividend ||0.00 ||0.00 |
|Tax on Dividend ||0.00 ||0.00 |
|Balance carried over to Balance Sheet ||(5871.74) ||0.00 |
*Figures in bracket () denote loss.
The Bank has been placed under PCA (Prompt Corrective Action) Framework by the ReserveBank of India vide its letter dt. 05.10.2017.
Pursuant to the PCA guidelines the Board of Directors of the Bank have not recommendedany Dividend for the financial year 2017-18.
CORPORATE SOCIAL RESPONSIBILITY
?"Corporate Social Responsibility (CSR)" can be referred ascorporate initiative to assess and take responsibility for the Bank's effects on theenvironment and impact on social welfare. CSR is a way of conducting business by whichcorporate entities visibly contribute to the social good.
?Bank's aim is to minimize the impact of business on the environment have apositive effecton society and seek to work with other NGOs or non-profitcharitiesdevelopment agencies organizations etc. who embrace these objectives. We aim to usenatural resources responsibly work with community projects and encourage and educate ouremployees in these goals.
?Staff members are encouraged to make contributions by understanding theaspirations of underprivileged sections and endeavoring to evolve measures to removesocial and development lacunae. This leads to their self development and improvement ofBank's image besides development of the community. In line with this commitment from the26th of January 2018 more than 20000 employees of the Bank have pledged to contributeRs. 10 each every time a soldier lays his life for the nation. This contribution is madeto the Army Welfare Fund Account for the Martyr's family.
?Under the community service various welfare and social activities - areundertaken by the bank both in Banking and non Banking areas to raise the quality of lifeof the downtrodden and under privileged sections of the society.
Providing assistance in green initiative education health sports andenvironment services are the focus areas.
Major CSR initiatives undertaken by the Bank in FY 2017-18
The Bank has been taking various steps/ projects to improve social welfare as part ofits CSR activities. The Bank had undertaken various CSR activities during 2017-18 whichinclude distribution of School Uniform Exhaust Fans CCTV's Camera's Mattress PillowsBlankets and Utensils to poor and needy children. Bank has also sanctioned a healthawareness camp for the women and distributed Solar Lamps to the underprivileged girls.
BOARD OF DIRECTORS
During 2017-18 13 meetings of Board of Directors 13 meetings of Management Committeeof Board and 9 meetings of Audit Committee of Board were held. Sh. Animesh Chauhan wasManaging Director & CEO of the Bank till the date of his superannuation. i.e. upto30.06.2017.
Thereafter Sh. Mukesh Kumar Jain assumed the charge of the Bank as Managing Director& CEO under Section 9(3)(a) of the Banking Companies (Acquisition and Transfer ofUndertakings) Act 1980 on 15.07.2017. Sh. Rajkiran Rai G was Executive Director of theBank till 30.06.2017 subsequent to which he was elevated as Managing Director & CEO ofUnion Bank of India. The tenure of all the three shareholder directors i.e. Sh. DineshKumar Agrawal Sh. Desh Deepak Khetrapal and Sh. Ashok Kumar Sharma completed on29.09.2017. Sh. Madan Mohan Lal Verma was elected as Shareholder Director on the Board ofthe Bank along with Sh. Desh Deepak Khetrapal and Sh. Ashok Kumar Sharma who werere-elected for a further period of three years i.e. upto 29.09.2020 in terms of Section9(3)(i) of the Act'.
EXPLANATIONS/COMMENTS BY BOARD OF DIRECTORS IN RESPONSE TO MODIFIED OPINION/ADVERSEREMARKS/EMPHASIS OF MATTER IF ANY IN THE INDEPENDENT AUDITORS' REPORT
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that in preparation of the Annual Accounts for the year ended31st March 2018:
the applicable accounting standards have been followed along with properexplanation relating to material departures if any
the accounting policies framed in accordance with the guidelines of the ReserveBank of India were consistently applied
reasonable and prudent judgment and estimates were made so as to give true andfair view of the state of affairs of the Bank at the end of financial year and of theprofit and loss of the Bank for the year ended on 31st March 2018
proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of applicable laws governing banks in India forsafeguarding the assets of the Bank and for preventing and detecting fraud and otherirregularities.
Internal financial controls were laid down and these were adequate and operatingeffectively
Proper systems were in place to ensure compliance of all laws applicable to theBank and these were adequate and operating effectively
The accounts have been prepared on a going concern basis.
The Board of Directors expresses its gratitude to the Government of India Ministry ofFinance Department of Economic Affairs Reserve Bank of India (RBI) Securities andExchanges Board of India (SEBI) and other Government and Regulatory Agencies for theirvaluable guidance and continued support provided to the Bank throughout the year. TheBoard of Directors are also grateful to the valued customers esteemed stakeholders andalso wish to place on record its great appreciation of the staff members for theirinvolvement and dedication in the overall development and growth of the Bank.
| ||For and on behalf of the Board |
|Place: Gurugram ||(Mukesh Kumar Jain) |
|Date: 12.05.2018 ||Managing Director & CEO |