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

(Rs. In Lakh)
Particulars Quarter ended Year ended
31.03.2020 31.12.2019 31.03.2019 31.03.2020 31.03.2019
Audited
(Refer note 1 below)
Unaudited Audited
(Refer note 1 below)
Audited
1. Interest earned (a+b+c+d) 145616 150378 147359 598998 581582
a) Interest / discount on advances / bills 114395 115236 116128 466505 459638
b) Income on Investments 27552 29181 28162 114967 115059
c) Interest on balances with Reserve Bank of India & other interbank funds 2935 3732 1508 14076 4290
d) Other Interest 734 2229 1561 3450 2595
2. Other Income 34699 26006 27245 115462 96277
3. Total Income (1+2) 180315 176384 174604 714460 677859
4. Interest Expended 86568 92657 85436 364204 345300
5. Operating Expenses (i+ii) 43764 45254 42691 174171 161480
(i) Employees cost 21442 22549 21228 85665 76117
(ii) Other operating expenses 22322 22705 21463 88506 85363
6. Total Expenditure (excluding provisions and contingencies) (4+5) 130332 137911 128127 538375 506780
7. Operating Profit before Provisions and Contingencies (3-6) 49983 38473 46477 176085 171079
8. Provisions (other than tax) and Contingencies 42927 36426 35234 148867 138855
9. Exceptional items 0 0 0 0 0
10. Profit from ordinary activity before tax (7-8-9) 7056 2047 11243 27218 32224
11. Tax expense (1314) 540 5241 3716 11137
12. Net Profit from ordinary activities after tax(10-11) 8370 1507 6002 23502 21087
13. Extraordinary items (net of tax expense) 0 0 0 0 0
14. Net Profit for the period (12-13) 8370 1507 6002 23502 21087
15. Paid-up equity share capital (FV Rs.2/- per share) 15986 15986 15986 15986 15986
16. Reserves excluding Revaluation Reserve 644041 626294
17. Analytical Ratios
(i) % of shares held by Government of India 0 0 0 0 0
(ii) Capital Adequacy Ratio-Basel III (%) 17.17 15.87 16.00 17.17 16.00
(iii) Earnings per share (EPS) (*) (Rs..)
a) Basic EPS before and after extraordinary items 1.05 0.19 0.75 2.94 2.64
b) Diluted EPS before and after extraordinary items 1.05 0.19 0.75 2.94 2.64
(iv) NPA Ratios
a) Gross NPA 421277 442397 444957 421277 444957
b) Net NPA 180865 194568 242034 180865 242034
c) % of Gross NPA 8.68 8.92 8.79 8.68 8.79
d) % of Net NPA 3.92 4.13 4.98 3.92 4.98
(v) Return on Asset (annualized) (%) 0.46 0.08 0.35 0.32 0.31
^ EPS not annualised for the quarter
(Rs. In Lakh)
Segment Reporting for the Quarter and Year ended 31st March 2020
Business Segments Quarter ended Year ended
31.03.2020 31.12.2019 31.03.2019 31.03.2020 31.03.2019
Audited
(Refer Note 1 below)
Unaudited Audited
(Refer Note 1 below)
Audited
Segment Revenue
1. Treasury 45183 38284 36667 166896 130725
2. Corporate / Wholesale Banking 37104 37270 40428 150547 165386
3. Retail Banking 97044 100010 96723 393881 379250
4. Other Banking Operations 984 820 786 3136 2498
Total 180315 176384 174604 714460 677859
Segment Results
1. Treasury 19067 9472 13348 57825 34590
2. Corporate / Wholesale Banking 10352 9437 11632 39259 48484
3. Retail Banking 26175 25785 26981 102577 109855
4. Other Banking Operations 867 717 694 2760 2219
Total 56461 45411 52655 202421 195148
Less: Unallocated Income/Expenses 6478 6938 6178 26336 24069
Operating Profit 49983 38473 46477 176085 171079
Tax expense -1314 540 5241 3716 11137
Other Provisions 42927 36426 35234 148867 138855
Net Profit from ordinary activities 8370 1507 6002 23502 21087
Extraordinary items 0 0 0 0 0
Net Profit 8370 1507 6002 23502 21087
Segment Assets
1. Treasury 1738669 1978272 1560418 1738669 1560418
2. Corporate / Wholesale Banking 1213077 1245554 1359870 1213077 1359870
3. Retail Banking 3396734 3466386 3498211 3396734 3498211
4. Other Banking Operations 0 0 0 0 0
5. Unallocated 479337 575271 515512 479337 515512
Total Segment Assets 6827817 7265483 6934011 6827817 6934011
Segment Liabilities
1. Treasury 1607550 1896941 1446291 1607550 1446291
2. Corporate / Wholesale Banking 1087141 1111004 1226053 1087141 1226053
3. Retail Banking 3043627 3092531 3154225 3043627 3154225
4. Other Banking Operations 0 0 0 0 0
5. Unallocated 429472 513369 465162 429472 465162
Total (a) 6167790 6613845 6291731 6167790 6291731
Capital Employed (Segment Assets - Segment Liabilities)
1. Treasury 131119 81331 114127 131119 114127
2. Corporate / Wholesale Banking 125936 134550 133817 125936 133817
3. Retail Banking 353107 373855 343986 353107 343986
4. Other Banking Operations 0 0 0 0 0
5. Unallocated 49865 61902 50350 49865 50350
Total (b) 660027 651638 642280 660027 642280
Total Segment Liabilities (a+b) 6827817 7265483 6934011 6827817 6934011
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 2020
Particulars As on 31.03.2020 (Audited) As on 31.03.2019Audited)
Capital and Liabilities
Capital 15986 15986
Reserve and Surplus 644041 626294
Deposits 5907508 5986795
Borrowings 118418 156534
Other Liabilities and Provision 141864 148402
Total 6827817 6934011
Assets
Cash & Balances with RBI 273267 293468
Balances with Banks and Money at Call and Short Notice 165988 76237
Investments 1576244 1488159
Advances 4609811 4858081
Fixed Assets 58664 58298
Other Assets 143843 159768
Total 6827817 6934011
(Rs. In Lakh)
Cash flow statement for the year ended 31st March 2020
Particulars As on 31.03.2020 (Audited) As on 31.03.2019Audited)
Cash flow from / (used in) operating activities
Net Profit as per Profit and Loss account 23502 21087
Adjustments for
Depreciation on Bank’s property 11888 10122
Interest paid on TIER II bonds 6537 1798
Provisions for other contingencies 5247 383
Provision for taxes 3716 11137
Provision for depreciation on investment 4022 1735
Provision for standard assets 370 (208)
Provision for bad and doubtful debts 135617 131774
Provision for non performing investments 3610 5170
Provision for leave encashment 1011 1921
Amortization of premium paid on Held to Maturity (HTM) investments 6708 4393
Provision for employees stock option plan / scheme 20 29
(Profit) / Loss on sale of fixed assets (net) 1246 (125)
Operating profit before working capital changes 203494 189216
Adjustments for working capital changes
(Increase) / Decrease in investments (excluding HTM investments) 37537 10453
(Increase) / Decrease in advances 112224 (509083)
(Increase) / Decrease in other assets 18181 (838)
Increase / (Decrease) in deposits (79287) 297786
Increase / (Decrease) in borrowings (23116) (131565)
Increase / (Decrease) in other liabilities and provisions (6651) 6466
58888 (326781)
Direct taxes paid (12000) (20000)
Net cash flow from / (used in) operating activities 250382 (157565)
Cash flow from investing activities
Purchase of fixed assets (12253) (15601)
(Increase)/Decrease in HTM investments (139963) 70411
Sale of fixed assets / other assets (1246) 125
Net cash flow from / (used in) investing activities (153462) 54935
Cash flow from financing activities
Proceeds from issue of share capital 0 0
Proceeds from share premium 6 2
Increase/(Decrease) in tier II bonds (15000) 48700
Interest paid on tier II bonds (6537) (1798)
Dividend paid (including tax on dividend) (5839) (5491)
Net cash flow from /(used in) financing activities (27370) 41413
Net Increase/(Decrease) in cash & cash equivalents 69550 (61217)
Cash and cash equivalents at the beginning of the year 369705 430922
Cash and cash equivalents at the end of the year 439255 369705
The above Cash Flow Statement is based on indirect method

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

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