The financial results for the quarter / nine months ended 31.12.2009 have been subjected to limited review by the Statutory Central Auditors and have been approved by the Board of Directors at its meeting held on 15th January 2010.

The working results for the quarter / nine months ended 31.12.2009 have been arrived at after considering the provision for non-performing assets, standard assets, diminution in fair value and investment depreciation on the basis of prudential norms issued by the Reserve Bank of India (RBI). In respect of Income Tax, Depreciation on Fixed Assets, etc., provision has been made on estimated basis.

In terms of the Revised Accounting Standard (AS)-15 issued by the Institute of Chartered Accountants of India (ICAI) provision has been made for Employee Benefits viz. pension, gratuity, leave encashment, LFC/LTC, sick leave etc., on estimated and proportionate basis. The provision charged to Profit & Loss Account includes Rs. 66.52 crore (Rs. 66.52 crore) towards amortization of the increase in transitional liability over the pre-revised AS-15 liability and Rs. 72.33 crore (Rs. 52.93 crore) towards current liability for the nine months ended 31.12.2009. The unamortized portion of the increase in liability on account of Revised AS-15 is Rs. 199.55 crore (Rs. 288.25 crore) as on 31.12.2009.

Pending outcome of negotiations on wage revision between Indian Banks’ Association on behalf of member banks and Unions of workmen / officers, an ad-hoc provision for wage revision has been made of Rs. 96.94 crore (Rs. 100.00 crore) for the nine months ended 31.12.2009 over and above Rs.150.00 crore made in the year ended 31.03.2009 and towards consequential increase in other Employee Benefits such as Pension, Gratuity, etc. Rs. 97.68 crore (Rs. Nil) for the nine months ended 31.12.2009.

The Bank has recognized, MAT Credit to the extent of Rs. 125.09 crore (Rs. 46.22 crore) for the nine months ended 31.12.2009 as MAT Credit Entitlement under Section 115JAA of the Income Tax Act, 1961 and treated the same as an Asset.

The Observation of Auditors

The consequential effect of
(a) Reconciliation / adjustment of pending outstanding entries in the Inter-Office and Inter-Bank transactions,
(b) Accounting of income from commission earned on Letters of Credit and Guarantees issued, on cash basis, not being in accordance with AS 9 on Revenue Recognition issued by ICAI and
(c) Classification of Credit Linked Notes (CLNs) as Loans and Advances instead of Investments, on the financial results has not been ascertained,

Our Reply
(a) Reconciliation of outstanding entries in Suspense Accounts and Inter Branch/Office Accounts upto 30.11.09 and upto 31.12.2009 for accounts with Reserve Bank of India and upto 30.09.2009 for accounts with other Banks has been completed and elimination of outstanding entries is in progress. The impact of such reconciliation on the accounts will not be material.
(b) We will be recognising commission income on L/C and Guarantees on accrual basis from the current year.
(c) Bank has sought clarification from RBI on classification of CLNs .

Number of Investor Complaints:-
(i) Outstanding at the beginning of the quarter-02,
(ii) Received during the quarter-668,
(iii) Disposed of during the quarter-668 and
(iv) Outstanding at the end of the quarter-02.

The previous period figures have been regrouped /rearranged wherever necessary.