Audited Financial Results for the Quarter and Year ended 31st March 2020

Notes:

1) The figures for the quarter ended 31st March 2020 and 31st March 2019 are the balancing figures between audited figures in respect of the full financial year and the published year to date figures upto the end of the third quarter of the respective financial year.

2) The above financial results for the year ended 31st March 2020 have been reviewed and recommended by the Audit Committee of the Board and approved by the Board of Directors at their meeting held on 24th June 2020. The same have been subjected to audit by the Statutory Central Auditors of the Bank in line with the guidelines issued by Reserve Bank of India and as per listing agreement with the stock exchange.

3) There has been no change in the accounting policies followed in the preparation of these financial results for the year ended 31st March 2020, as compared to those followed in the financial statements for the year ended 31st March 2019. A new accounting policy have been added for accounting for transactions in bullion business, which started in the current year.

4) The bank has made provisions in accordance with Reserve Bank of India guidelines, for loan losses and depreciation on investments, standard advances, restructured advances, exposures to entities with unhedged foreign currency exposure, taxes on income and other usual and necessary provisions. Provision for employees’ retirement benefits viz. pension, gratuity and leave encashment has been made based on actuarial valuation.

5) Other income includes fees earned from providing services to customers, commission from non-fund based banking activities, earnings from foreign exchange transactions, selling third party products, profit on sale of investments (net), income from priority sector lending certificates, recoveries from advances written off, etc.

6) The Bank has elected to exercise the option permitted under section 115BAA of the Income Tax Act,1961 as introduced by the Taxation Laws (Amendments) Ordinance, 2019. Accordingly, provision for Income Tax for the quarter and year ended 31st March 2020 as well as re-measurement of deferred tax liability and assets have been made basis the rate prescribed in the aforesaid section.

7) Deferred tax assets (DTA) of Rs. 45.95 crore has been recognised on provision for standard assets during the quarter ended 31st March 2020, which was hitherto not recognized by the Bank.

8) The COVID-19 global pandemic continues to spread rapidly across the globe including India. COVID-19 has caused a significant impact and volatility in the global and domestic financial markets and economic activities. The Government of India had announced a series of lock-down measures beginning 24th March 2020 with extension thereof up to 31st May 2020, in order to limit the spread of the pandemic across India. A calibrated and gradual withdrawal of lockdown and partial resumption of various business / economic activities are implemented with effect from 1st June 2020, based on the guidelines to be issued by the respective states. The impact of COVID-19 on the Bank’s operations and financial results will depend on future developments and resumption of various business activities, which are highly uncertain as the same will be dependent on the severity and spread of the COVID-19 pandemic and measures undertaken to mitigate the same.

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. The moratorium period / benefits, wherever granted, shall be excluded for the purpose of asset classification as per Income Recognition and Asset Classification norms. Bank is required to make additional provision @ 10%, over two quarters beginning with quarter ending March 31, 2020, in respect of such borrowers whose accounts, though classified as standard as on March 31, 2020, would have become non-performing but for these benefits/relaxations. Accordingly, Bank has made the required provision in full amounting to Rs. 19.50 crore during the quarter ended 31st March 2020.

9) Provision Coverage Ratio calculated as per the guidelines of Reserve Bank of India is 68.90% as on 31st March 2020 (previous year 56.86%).

10) In accordance with RBI circular DBOD.No.BPBC.1/21.06.201/2015-16 dated July 01, 2015, read together with RBI circular DBR.No.BP.BC.80/21.06.201/2014-15 dated March 31, 2015, Banks are required to make Pillar 3 disclosures under Basel III capital regulations. Accordingly, Pillar 3 disclosures under Basel III capital regulations have been made available on the Bank’s website at the following link https://www.kvb.co.in/about-us/disclosures/disclosures-pillar-III/. These disclosures have not been subjected to review/audit by the Statutory Central Auditors.

11) Reserve Bank of India, vide circular dated April 17, 2020, has decided that banks shall not make any further dividend pay-outs from the profits pertaining to the financial year ended 31st March 2020 until further instructions, in order to enable the banks to conserve capital to retain their capacity to support the economy and absorb losses in an environment of heightened uncertainty caused by COVID-19. Accordingly, the Board of Directors of the Bank, at their meeting held on 24th June 2020, have not recommended any dividend for the year ended 31st March 2020.

12) Previous period /year’s figures have been re-classified / regrouped wherever considered necessary to confIrm to the current period/year’s classification.

For and on behalf of Board of Directors

N. S. SRINATH
CHAIRMAN

Place: Bengaluru
Date: 24.06.2020