10. Provisions, Contingent Liabilities and Contingent Assets
10.1 In conformity with AS 29 - "Provisions, Contingent Liabilities and Contingent Assets” issued by the Institute of Chartered Accountants of India, the Bank recognizes provisions only when it has a present obligation because of a past event, and would result in a probable outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.
10.2 No provision is recognized for
I. Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Bank; or
II. Any present obligation that arises from past events but is not recognized because:
• It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
• A reliable estimate of the amount of obligation cannot be made.
Such obligations are recorded as Contingent Liabilities.
10.3 The Bank has made 100% provision for redemption against the accumulated reward points in respect of standard credit card holders.
10.4 Contingent Assets are not recognized in the financial statements.
11. Impairment of Assets
Fixed assets are reviewed for impairment whenever events or changes in circumstances warrant that the carrying
amount of an asset may not be recoverable. Impairment to be recognized is measured by the amount by which the
carrying amount of the asset exceeds the fair value of the asset.
12. Share Issue Expenses
Share issue expenses are charged to the Share Premium account.
13. Earnings per Share
13.1 The Bank reports basic and diluted earnings per share in accordance with AS 20 - "Earnings per Share” issued by the ICAI. Basic Earnings per Share are computed by dividing the Net Profit after Tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding for the year.
13.2 Diluted Earnings per Share reflect the potential dilution that could occur if securities or other contracts to issue equity shares were exercised or converted during the year. Diluted Earnings per Share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at year end.
1.2 During the FY 2022-23, the Bank raised equity capital through Employee Stock Purchase Scheme (JKBESPS-2023) by allotting 7,00,00,000 (Seven Crores) equity shares to the eligible employees. Statutory Central Auditors for FY 2022-23 issued a Qualified Opinion stating that the JKBESPS-2023 was not implemented in conformity with Para 2.3.1.7 of RBI Circular no RBI/2015-16/95 DBR.No.Dir.BC.10/13.03.00/2015-16 on "Loans and Advances Statutory and Other Restrictions” dated July 1,2015 and Clause 21 of JKBESPS-2023. The Bank, however has maintained that the JKBESPS-2023 was in conformity with the applicable laws/regulations. The Bank received the listing approval in respect of the shares issued under JKBESPS 2023 from BSE and NSE on May 03, 2023 and October 20, 2023 respectively and trading approval from both the exchanges on November 9, 2023.The Bank has, therefore, reckoned the amount of Rs.338.31 crores for computation of financial ratios/prudential limits concerning net worth/capital funds with effect from 31st December, 2023 in terms of independent examination and approval of the matter by the Audit committee of the Board. (Mu
1.3 During financial year 2023-24, Bank has raised Equity Share Capital (including Share Premium) of Rs. 750 Crores through Qualified Institutional Placement on 15 December, 2023. The Bank issued and allotted 6,97,02,602 fully paid-up equity shares of Re. 1 each (face value) at a premium of Rs. 106.60 per share to the investors on discount of 4.49% (i.e. Rs.5.06 per share) on floor price of Rs. 112.66 per Equity Share determined, as per the formula prescribed
16.Additional Disclosures L£S£AT^2
a. Payment to Micro, Small & Medium Enterprises under the Micro, Small & Medium Enterprises Development Act, 2006 There have been no reported cases of delayed payments of the principal amount or interest due thereon to Micro, Small & Medium Enterprises.
b. Office Accounts Iprfcnch*
Reconciliation/adjustment of inter-bank/inter-branch transactions, branch suspense, Government Transactions, NOSTRO, System Suspense, Clearing, and Sundry Deposits is in progress on an ongoing basis. The impact, in the opinion of the management of the un-reconciled entries, if any, on the financial statements would not be material.
c. Provision on accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC):
In terms of RBI letter no. DBR,No.B0.15199/21.04.048/2016-17 dated June 23, 2017 and Letter no. DBR. BP.1908/21.04.048/2017-18 dated August 28, 2017 for the accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), the Bank is holding total provision of ' 126.55 crore (Aggregate provision of RBI List 1 and List 2 accounts) as on March 31, 2024 (100% of Gross NPA advances). (Previous year' 129.35 crore {100% of total outstanding}
d. During the year ended March 31, 2024, the Bank has made provision of ' 263crore towards wage revision on account of 12th Bi-Partite Wage Settlement effective from November 01, 2022 on ad-hoc basis. The same has been accounted for as 'Payments to and provisions for employees' under "Schedule 16: Operating Expenses.”
e. Previous year figures have been regrouped/reclassified/Recasted, wherever necessary, to conform to current year classification.
f. Miscellaneous Income: HfSTr-Aaigmwj)
During the year the following incomes earned (under the head Miscellaneous Income) were more than 1% of the Total
• The Bank during the Financial Year 2023-24 has revisited revaluation of its 51 freehold land and offices/buildings based on valuations as on 31.03.2023 made by the independent valuers of the Bank resulting into net appreciation of ' 17.92 Crores credited to the revaluation reserve and a net amount of ' 0.06 crores on account of revaluation has been drawn down from P/L account as it was earlier credited to P/L Account.
• Further, pursuant to the revised accounting standard-10 "Property, plant and equipment "applicable from 1st April 2017, depreciation of 30.09 Crores (previous year ' 20.54 Crores) on the revalued portion of the fixed assets (being Premises & Land) has been transferred from the Revaluation reserve to General/ Revenue reserve and an amount of 0.18 Crore has been transferred from Revaluation Reserve to General Reserve on account of disposal of a previously revalued asset.
• Further, Depreciation on Bank's property includes amortization in respect of leased properties amounting to ? 0.76 Crores (previous year? 0.76 crores).
j. Corporate Social Responsibility (CSR)
Pursuant to Section 135 of the Companies Act 2013, specified companies covered under section 135(1) of the Companies Act 2013 are required to spend at least 2% of the average net profits made during the three immediately preceding financial years in pursuance of their Corporate Social Responsibility Policy. Accordingly, the Bank was required to spend an amount of ' 18.91 crores (Previous Year ' 1.18 crores) on CSR activities during FY 2023-24, against which the Bank has spent an amount of ' 18.91 crores (Previous year? 1.18 crores).
k. Provision Coverage Ratio (PCR) BSP
Provision coverage ratio as on March 31, 2024 is 91.58% (previous year 86.20%) without taking into account the floating provision of Rs.124.48 Crores held by the Bank as on March 31, 2024 which is part of Tier-II Capital.
l. Investor Complaints BOk
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m. In accordance with the approved accounting policy in respect of intangible assets and in compliance with Section 15(1) of Banking Regulation Act 1951, The Bank has written off the entire amount of intangible assets amounting to Rs. 77.68 crores (Previous year Rs.35.72 crore)
n. Proposed Dividend BS^
The Board of Directors at its meeting held on May 04, 2024 proposed a dividend of ? 2.15 per share (previous year Re 0.50 per share), subject to approval of the members at the ensuing Annual General Meeting. Effect of the proposed dividend has been reckoned in determining capital funds in the computation of capital adequacy ratios as at March 31, 2024.
Baldev Prakash R. K. Chhibber Naba Kishore Sahoo Umesh Chandra Pandey Anil Kumar Goel Anand Kumar
Managing Director & CEO Director Director Director Director Director
DIN: 09421701 DIN: 08190084 DIN: 07654279 DIN: 01185085 DIN: 00672755 DIN: 03041018
Sudhir Gupta Shahla Ayoub Fayaz Ahmad Ganai Mohammad Shafi Mir
Executive Director Director Chief Financial Officer Company Secretary
DIN: 09614492 DIN: 09834993
Place : Srinagar Dated: 4th May, 2024
FOR GUPTA GUPTA & FOR J C R & CO LLP FOR LUNAWAT & CO
ASSOCIATES LLP Chartered Accountants Chartered Accountants
Chartered Accountants FRN: 105270W/W100846 FRN: 000629N
FRN: 001728N/N500321
CA. Nakul Saraf CA. Rakesh Kaushik CA. Ramesh K Bhatia
Partner Partner Partner
M.No. 541550 M.No. 089562 M.No. 080160
UDIN: 24541550BKAEUR9648 UDIN: 24089562BKCMZL2222 UDIN: 24080160BKCSIZ2889
Place : Srinagar Dated: 4th May, 2024
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