Audited Financial Results for the Quarter and Year ended 31st March 2021

(Rs. In Lakh)
Particulars Quarter ended Year ended
31-03-2021 31-12-2020 31-03-2020 31-03-2021 31-03-2020
Audited
(Refer note 1 below)
Unaudited Audited
(Refer note 1 below)
Audited
1. Interest earned (a+b+c+d) 134931 135031 145616 547042 598998
a) Interest / discount on advances / bills 109648 110465 114395 445354 466505
b) Income on Investments 21970 23455 27552 94179 114967
c) Interest on balances with Reserve Bank of India & other interbank funds 3245 843 2935 6829 14076
d) Other Interest 68 268 734 680 3450
2. Other Income 21647 25149 34699 105665 115462
3. Total Income (1+2) 156578 160180 180315 652707 714460
4. Interest Expended 73671 76673 86568 311091 364204
5. Operating Expenses (i+ii) 57929 57816 43764 198683 174171
(i) Employees cost 35121 36828 21442 115368 85665
(ii) Other operating expenses 22808 20988 22322 83315 88506
6. Total Expenditure (excluding provisions and contingencies) (4+5) 131600 134489 130332 509774 538375
7. Operating Profit before Provisions and Contingencies (3-6) 24978 25691 49983 142933 176085
8. Provisions (other than tax) and Contingencies 7145 20121 42927 89496 148867
9. Exceptional items - - - - -
10. Profit from ordinary activity before tax (7-8-9) 17833 5570 7056 53437 27218
11. Tax expense 7396 2107 (1314) 17498 3716
12. Net Profit from ordinary activities after tax(10-11) 10437 3463 8370 35939 23502
13. Extraordinary items (net of tax expense) - - - - -
14. Net Profit for the period (12-13) 10437 3463 8370 35939 23502
15. Paid-up equity share capital (FV Rs.2/- per share) 15986 15986 15986 15986 15986
16. Reserves excluding Revaluation Reserve 679988 644041
17. Analytical Ratios
(i) % of shares held by Government of India - - - - -
(ii) Capital Adequacy Ratio-Basel III (%) 18.98 18.52 17.17 18.98 17.17
(iii) Earnings per share (EPS) (^) (Rs..)
a) Basic EPS before and after extraordinary items 1.31 0.43 1.05 4.50 2.94
b) Diluted EPS before and after extraordinary items 1.31 0.43 1.05 4.50 2.94
(iv) NPA Ratios
a) Gross NPA 414287 384247 421277 414287 421277
b) Net NPA 171939 126311 180865 171939 180865
c) % of Gross NPA 7.85 7.37 8.68 7.85 8.68
d) % of Net NPA 3.41 2.55 3.92 3.41 3.92
(v) Return on Asset (annualized) (%) 0.55 0.19 0.46 0.49 0.32
^ EPS not annualised for the quarter
(Rs. In Lakh)
Segment Reporting for the Quarter and Year ended 31st March 2021
Business Segments Quarter ended Year ended
31-03-2021 31-12-2020 31-03-2020 31-03-2021 31-03-2020
Audited
(Refer Note 1 below)
Unaudited Audited
(Refer Note 1 below)
Audited
Segment Revenue
1. Treasury 26439 30614 45183 139697 166896
2. Corporate / Wholesale Banking 31647 31168 37104 125211 150547
3. Retail Banking 97537 97654 97044 385018 393881
4. Other Banking Operations 955 744 984 2781 3136
Total 156578 160180 180315 652707 714460
Segment Results
1. Treasury 5669 8561 19067 48389 57825
2. Corporate / Wholesale Banking 5617 4821 10352 26683 39259
3. Retail Banking 18376 17215 26175 87559 102577
4. Other Banking Operations 654 516 867 2016 2760
Total 30316 31113 56461 164647 202421
Less: Unallocated Income/Expenses 5338 5422 6478 21714 26336
Operating Profit 24978 25691 49983 142933 176085
Tax expense 7396 2107 (1314) 17498 3716
Other Provisions 7145 20121 42927 89496 148867
Net Profit from ordinary activities 10437 3463 8370 35939 23502
Extraordinary items - - - - -
Net Profit 10437 3463 8370 35939 23502
Segment Assets
1. Treasury 1912596 1837265 1738669 1912596 1738669
2. Corporate / Wholesale Banking 1177076 1203033 1213077 1177076 1213077
3. Retail Banking 3859275 3748212 3396734 3859275 3396734
4. Other Banking Operations - - - - -
5. Unallocated 513372 471255 479337 513372 479337
Total Segment Assets 7462319 7259765 6827817 7462319 6827817
Segment Liabilities
1. Treasury 1836846 1676339 1607550 1836846 1607550
2. Corporate / Wholesale Banking 1045290 1086600 1087141 1045290 1087141
3. Retail Banking 3428179 3385706 3043627 3428179 3043627
4. Other Banking Operations - - - - -
5. Unallocated 456030 425590 429472 456030 429472
Total (a) 6766345 6574235 6167790 6766345 6167790
Capital Employed (Segment Assets - Segment Liabilities)
1. Treasury 75750 160926 131119 75750 131119
2. Corporate / Wholesale Banking 131786 116433 125936 131786 125936
3. Retail Banking 431096 362506 353107 431096 353107
4. Other Banking Operations - - - - -
5. Unallocated 57342 45665 49865 57342 49865
Total (b) 695974 685530 660027 695974 660027
Total Segment Liabilities (a+b) 7462319 7259765 6827817 7462319 6827817
For the above segment reporting, the reportable segments are identified into Treasury, Corporate/Wholesale banking, Retail banking and other banking operations in compliance with RBI guidelines. The Bank operates only in India.
(Rs. In Lakh)
Statement of Assets and Liabilities as on 31st March 2021
Particulars As on 31.03.2021 (Audited) As on 31.03.2020Audited)
Capital and Liabilities
Capital 15986 15986
Reserve and Surplus 679988 644041
Deposits 6327843 5907508
Borrowings 252829 118418
Other Liabilities and Provision 185673 141864
Total 7462319 6827817
Assets
Cash & Balances with RBI 312405 273267
Balances with Banks and Money at Call and Short Notice 319629 165988
Investments 1601893 1576244
Advances 5036350 4609811
Fixed Assets 53906 58664
Other Assets 138136 143843
Total 7462319 6827817
(Rs. In Lakh)
Cash flow statement for the year ended 31st March 2021
Particulars As on 31.03.2021 (Audited) As on 31.03.2020 (Audited)
Cash flow from operating activities
Net Profit as per Profit and Loss account 35939 23502
Adjustments for
Depreciation on Bank’s property 12414 11888
Interest paid on TIER II bonds 5819 6537
Provisions for other contingencies 9804 5247
Provision for taxes 17498 3716
Provision for depreciation on investment 13782 4022
Provision for standard assets 573 370
Provision for bad and doubtful debts 63399 135617
Provision for non performing investments 1938 3610
Provision for leave encashment 5501 1011
Amortization of premium paid on Held to Maturity (HTM) investments 12273 6708
Provision for employees stock option plan / scheme 8 20
(Profit) / Loss on sale of fixed assets (net) (22) 1246
Operating profit before working capital changes 178926 203494
Adjustments for working capital changes
(Increase) / Decrease in investments (excluding HTM investments) 76611 37537
(Increase) / Decrease in advances (490609) 112224
(Increase) / Decrease in other assets 5707 18181
Increase / (Decrease) in deposits 420336 (79287)
Increase / (Decrease) in borrowings 134411 (23116)
Increase / (Decrease) in other liabilities and provisions 25171 (6651)
350553 58888
Direct taxes paid (14000) (12000)
Net cash flow from / (used in) operating activities 336553 250382
Cash flow from investing activities
Purchase of fixed assets (7656) (12253)
(Increase)/Decrease in HTM investments (130251) (139963)
Sale of fixed assets / other assets 22 (1246)
Net cash flow from / (used in) investing activities (137885) (153462)
Cash flow from financing activities
Proceeds from issue of share capital - 6
Increase/(Decrease) in tier II bonds - (15000)
Interest paid on tier II bonds (5820) (6537)
Dividend paid (including tax on dividend) (69) (5839)
Net cash flow from /(used in) financing activities (5889) (27370)
Net Increase in cash & cash equivalents 192779 69550
Cash and cash equivalents at the beginning of the year 439255 369705
Cash and cash equivalents at the end of the year 632034 439255
The above Cash Flow Statement is based on indirect method

Notes:

1) The figures for the quarter ended 31st March 2021 and 31st March 2020 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 2021 have been reviewed and recommended by the Audit Committee of the Board and approved by the Board of Directors at their meeting held on 28th May 2021. 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 2021 as compared to those followed in the financial statements for the year ended 31st March 2020.

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. Provision for employees’ retirement benefits viz. pension, gratuity and leave encashment has been made based on actuarial valuation. Provision for Income Tax, Deferred Tax and other contingencies are made on an estimated and proportionate basis and are subject to adjustments, if any, at the year end.

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), recoveries from advances written off, profit on bullion business etc.

6) In accordance with RBI circular DBOD.No.BP.BC.1/21.06.201/2015-16 dated 1st July 2015, read together with RBI circular DBR.No.BP.BC.80/21.06.201/2014-15 dated 31st March 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.

7) COVID-19 pandemic continues to have a significant impact and volatility in the global and domestic economies resulting in decrease in economic activities. Increase in infection rate and various lockdowns /  movement restrictions announced by Central Government and various State Governments in India and the outbreak of current “second wave” of the pandemic may  further slowdown the economic activity. The extent to which the same will impact the Bank’s operations and financial results remain uncertain and is dependent on several factors including measures initiated or to be initiated by the Government of India and RBI.  There is stress on collection of dues from customers, however the bank is closely monitoring the collection efficiency and will undertake additional steps if the efficiency levels breach the current level.  As on 31st March 2021, the Bank continues to maintain liquidity coverage and capital adequacy ratios at higher levels than the regulatory minimum; the management continues to closely monitor the day to day operations, business, liquidity position and adequacy of capital.

RBI vide circular DOR.No.BP.BC.72/21.04.048/2019-20 dated 23rd May 2020 read with circulars DOR.No.BP.BC.63/21.04.048/2019-20 dated 17th April 2020 and DOR.No.BP.BC.47/21.04.048/2019-20 dated 27th March 2020 announced ‘COVID-19 Regulatory Package’ which envisaged grant of various relief measures to borrowers whose accounts were classified as Standard Assets as on 29th February 2020. Accordingly, Board approved a policy for implementation of the said package including, inter-alia, grant of moratorium on the payment of installments and / or deferment of interest falling due between 1st March 2020 and 31st August 2020 as well as relaxation of certain other parameters, to eligible borrowers, and the asset classification of the eligible borrowers remained unchanged during the moratorium period. Bank was required to make additional provision @ 10%, over two quarters beginning with quarter ending 31st March 2020 in respect of such borrowers whose accounts, though classified as standard as on 31st March 2020, would have become non-performing but for these benefits/relaxations, and accordingly a provision of Rs. 12001 lakh was created (Rs. 1950 lakh during the quarter/year ended 31st March 2020 and Rs. 10051 lakh during the quarter ended 30th June 2020).

As at 31st December 2020, an amount of Rs. 30492 lakh was held as provision towards COVID-19 regulatory package and provision in respect of the accounts which were not declared as NPA as per interim order dated 3rd September 2020 of the Honourable Supreme Court, as per which accounts which were not declared as NPA as on 31st August 2020, shall not be declared as NPA till further orders. Pursuant to the Supreme Court’s judgment dated 23rd March 2021, and the related RBI circular DOR.STR.REC.4/21.04.048/2021-22 dated 7th April 2021, the Bank has undertaken asset classification as per extant IRAC norms with effect from 1st September 2020. Accordingly, the said provision of Rs. 30492 lakh has been utilized for creation of provision required as per IRAC norms. The aggregate provision held for likely impact of COVID-19 as on 31st March 2021 is Rs. 1389 lakh.

Disclosure as per RBI circular DOR.No.BP.BC.63/21.04.048/2019-20 dated 17th April 2020 is given below:

SN Particulars Rs. in lakh
1 Outstanding amounts as on 31st March 2020 in SMA/overdue categories, where the moratorium/deferment was extended 289646
2 Of (1) above, outstanding amount where asset classification benefits is extended (balance as on 31st March 2021) * 19934
3 Provisions made during the quarter ended 31st March 2020 and 30th June 2020  12001
4 Provisions adjusted during the year against slippages 12001
5 Residual provision outstanding as at 31st March 2021 Nil
* Note - Outstanding as at 30th September 2020 was Rs. 46262 lakh and as on 31st March 2021 is Rs. 40330 lakh, out of which Rs. 20396 lakh is classified as NPA as on 31st March 2021.

As per the scheme for grant of ex-gratia payment of difference between compound interest and simple interest for the period from 1st March 2020 to 31st August 2020 to eligible borrowers announced by Government of India vide letter No.: F.2/12/2020-BOA.I dated 23rd October 2020 an amount of Rs. 1303 lakh has been refunded to eligible borrowers and the same has been reimbursement by Government of India. Further, pursuant to the judgment of the Honourable Supreme Court of India on 23rd March 2021 in the matter of Small Scale Industrial Manufacturers Association Vs. Union of India & Others and the guidelines issued by RBI vide circular No.: DOR.STR.REC.4/21.04.048/2021-22 dated 7th April 2021, banks are required to refund / adjust the interest on interest / compound interest / penal interest charged to the borrowers during the moratorium period i.e. 1st March 2020 to 31st August 2020. Accordingly, the methodology for calculation of the amount of such ‘interest on interest’ to be refunded / adjusted was finalised by Indian Banks Association. The Bank is in the process of implementing this methodology and pending finalisation thereof, a provision has been created by reducing interest income, during the quarter / year ended 31st March 2021, by an amount of Rs. 2500 lakh towards estimated interest relief which is to be refunded / adjusted.

In accordance with the Resolution Framework for COVID-19 related stress announced by the RBI vide circular DOR.No.BP.BC/3/21.04.048/2020-21 dated 6th August 2020, the Bank has implemented one-time restructuring of eligible borrower accounts, including certain accounts which were not classified as NPA pursuant to the Supreme Court’s interim order dated 3rd September 2020.

Details of resolution plan implemented for COVID-19 related stress is given below:

(Rs. In Lakh)
Type of borrower Number of accounts where resolution plan has been implemented under this window Exposure to accounts mentioned at (A) before implementation of the plan Of (B), aggregate amount of debt that was converted into other securities Additional funding sanctioned, if any, including between invocation of the plan and implementation Increase in provisions on account of the implementation of the resolution plan
(A) (B) (C) (D) (E)
Personal Loans 1606 31558 Nil Nil 3166
Corporate persons* 18 22449 Nil 1012 2091
Of which, MSMEs      Nil Nil Nil Nil Nil
Others    23 3121 Nil 82 311
Total 1647 57128 Nil 1094 5568
*As defined in Section 3(7) of the Insolvency and Bankruptcy Code, 2016

8) Disclosures as per RBI circular DOR.No.BP.BC.72/21.04.048/2019-20 dated 23rd May 2020 and DOR.No.BP.BC.62/21.04.048/2020-21 dated 17th April 2020 in respect of accounts where the resolution period was extended during the year ended 31st March 2021 is as under :

No. of accounts in respect of which resolution period was extended 2
Amount involved (Rs. in lakh) 12758

9) Provision Coverage Ratio as on 31st March 2021 calculated as per the guidelines of Reserve Bank of India is 72.70% (previous period 68.90%).

10) The Board of Directors in their meeting held on 28th May 2021 have proposed dividend of Rs. 0.50 per equity share of Rs. 2/- each for the year 2020-21, subject to necessary approvals. In accordance with AS 4, Contingencies and Events Occurring after the Balance sheet date, the proposed dividend of Rs. 3997 lakh has not been shown as an appropriation from the Profit and Loss appropriation account as on 31st March 2021. For computation of capital adequacy ratio, Bank has reduced the amount of proposed dividend for determining capital funds.

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

For and on behalf of Board of Directors

B Ramesh Babu
Managing Director & CEO

Place: Karur
Date: 28.05.2021

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