UCO Bank - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2020
Auditor and Management Disclosures and Notes for the quarterly results dated 31 Mar 2020
1) The above financial results were reviewed and recommended by the Audit Committee of the Board and approved by the Board of Directors at their meeting held on 26.06.2020. The results have been audited by Statutory Central Auditors of the Bank, in line with the guidelines issued by Reserve Bank of India and as per the requirements of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 as amended.
2) The financial results for the quarter / year ended 31st March, 2020 have been arrived at following the same accounting policies and practices as those followed in the preceding financial statements for the year ended 31st March, 2019.
The figures for the last quarter ended 31st March, 2020 are the balancing figures between the audited figures in respect of the full financial year and the published year to date figures up to the third quarter ended 31st December, 2019. The figures up to the end of third quarter only reviewed by the Statutory Auditors of the Bank and not subjected to audit.
3) The financial results for the quarter / year ended 31st March, 2020 have been arrived at after considering provisions on advances, non-performing investments, depreciation on investments and on fixed assets and provision for exposure to entities with unhedged foreign currency on the basis of extant guidelines/directives issued by the Reserve Bank of India. Provisions for Employee Benefits, Income Tax including deferred tax and other usual and necessary provisions have been made as per the applicable accounting standards issued by the Institute of Chartered Accountants of India.
4) Based on the available data, available financial statements and the declaration from borrowers wherever received, the Bank has estimated a liability of Rs.0.31crore as on 31st March, 2020 towards Unhedged Foreign Currency Exposure to their constituents in terms of RBI Circular DBOD.No.BP.BC.85/21.06.200/2013-14 dated 15th January 2014. The entire estimated amount is fully provided for.
5) Pending finalization of Bipartite agreement on wage revision (due from November, 2017), an adhoc amount of Rs. 23.66 crore has been provided during the quarter ended 31st March, 2020 towards wage revision. The cumulative provision held as on 31st March, 2020 for wage revision is Rs. 528.66 crore
6) In terms of Supreme Court Order and necessary guidelines issued by Reserve Bank of India (RBI) the Bank has kept Delhi Airport Metro Express Pvt.Ltd. “DAMEPL” as standard account. However, necessary provision as per IRAC norms have been made which are detailed as under:-
(Rs. in crores)
Amount not treated as NPA as per IRAC norms Provisions required to be made as per IRAC norms Provision actually held
194.14 48.54 48.54
7) As per the RBI directions issued during the financial year ended March 31, 2018 in respect of select borrower accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), against total outstanding of Rs. 1888.58, bank is holding a provision of Rs. 1705.49 as on 31st March, 2020.
8) In accordance with RBI circular No. DBR No. BP. BC. 18/21.04.048/2018-19 dated 01.01.2019 on “Micro, Small and Medium Enterprises(MSME) sector – Restructuring of Advances” the details of MSME restructured accounts during the year ended 31st March, 2020 are as under:
No. of Accounts Restructured Amount (Rs. in Crores)
2353 365
9) The Government of India has pronounced Section 115BAA of Income Tax Act, 1961 through Taxation Laws (Amendment) Ordinance, 2019 which provides domestic companies a non-reversible option to pay corporate tax at reduced rate effective from 1st April, 2019 subject to compliance of certain conditions. Bank is currently in the process of evaluating this option and continues to recognize the taxes on income for the quarter ended/year ended 31st March, 2020 as per the earlier provisions of the Income Tax Act, 1961.
10) Bank has recognized net deferred tax assets aggregating to Rs. 1275.71 crore on carry forward losses and other items of timing difference during the financial year 2019-20. During the quarter bank has recognized deferred tax assets of Rs.(-) 6.57 crore.
11) The details of divergence in asset classification and provisioning in terms of Risk Assessment Report (RAR) of RBI for the previous year ended 31.03.2019 are furnished hereunder pursuant to RBI Circular No. DBR.BPBC.No.32.21.04.018/2018-19 dated 01.04.2019 and SEBI Circular dated 31.10.2019.
(Rs. in crore)
Sl Particulars Amount
1. Gross NPAs as on March 31, 2019 as reported by the bank 29,888.33
2. Gross NPAs as on March 31, 2019 as assessed by RBI 31,105.75
3. Divergence in Gross NPAs (2-1) 1,217.42
4. Net NPAs as on March 31, 2019 as reported by the bank 9,649.92
5. Net NPAs as on March 31, 2019 as assessed by RBI 9,484.87
6. Divergence in Net NPAs (5-4) (165.05)
7. Provisions for NPAs as on March 31, 2019 as reported by the bank 18,993.71
8. Provisions for NPAs as on March 31, 2019 as assessed by RBI 20,383.88
9. Divergence in provisioning (8-7)** 1390.17
10. Reported Net Profit after Tax (PAT) for the year ended March 31, 2019 (4321.09)
11. Adjusted (notional) Net Profit after Tax (PAT) for the year ended March 31, 2019 after taking into account the divergence in provisioning (5,225.53)#
** Figures includes divergence in Provision attributable to Valuation of Investment of Rs.7,70,00,000.
#Figures adjusted with impact of Deferred Tax Asset (DTA)
Bank has made full provision against said divergence.
12) During the year the Bank issued shares and allotted -
• 175,17,09,626 Equity Shares of face value Rs.10/- each at an issue price of Rs. 19.01 (including premium of Rs.9.01) per share on 23.04.2019 to Government of India against capital infusion of Rs.3,330 Crore received on 21.02.2019 by way of preferential allotment of Equity Shares.
• 18,70,89,228 Equity Shares of face value of Rs.10/- each fully paid at an issue price of Rs.14.25 per share after a discount of 25% on the floor price of Rs. 19/- per share, in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 to the employees on 23.04.2019 under UCO Bank Employee Share Purchase Scheme (ESPS) 2019 against their capital contribution aggregating to Rs.266.60 Crore.
• 126,11,01,243 Equity Shares of face value of Rs.10/- each fully paid at an issue price of Rs. 16.89 (including premium of Rs.6.89) per share on 07.11.2019 to Government of India against capital infusion of Rs.2130 Crore received on 27.09.2019 by way of preferential allotment of Equity Shares.
• 129,50,42,321 Equity Shares of face value of Rs.10/- each fully paid at an issue price of Rs.16.54 (including premium of Rs.6.54) per share on 28.02.2020 to Government of India against capital infusion of Rs.2142 Crore received on 03.01.2020 by way of preferential allotment of Equity Shares.
13) During the quarter ended 31st March, 2020, Bank has exercised call option and redeemed Upper Tier II bonds aggregating Rs.500 crore. Further, Bank also redeemed Lower Tier II Bonds aggregating Rs. 800 crore on due date.
14) In accordance with RBI circular DBOD No. BP. BC/1/21.06.201/2015-16 dated 1st July, 2015, banks are required to make Pillar 3 disclosures under Basel III Capital requirements. The disclosures are being made available on Bank’s website (www.ucobank.com). These disclosures have not been subjected to review by the auditors.
15) The Spread of COVID 19 has resulted a lockdown in India and across the Globe. The continued lockdown has resulted in significant decline in globe and local economic activities. The situation continues to be uncertain and Bank is closely monitoring the same. Despite these events and conditions, there would not be any material impact on Bank’s results in future and going concern assumptions as at presently made. Management belief that no adjustments are required in the Financial Results as it does not significantly impact in the current financial year.
In accordance with RBI guidelines relating to ‘COVID 19 Regulatory Package’ on asset classification and provisioning dated 27.03.2020, 17.04.2020 and 23.05.2020 on COVID -19 Regulatory Package- Asset Classification and Provisioning the Bank has extended asset classification benefit and made provision as under:
S No. Particulars Amount
(Rs. In Crore)
1 Respective amount where asset classification benefits is extended 571.54
2 Provisions made during the 4th quarter of FY 2019-20 57.15
3 Provisions adjusted during the respective accounting periods against slippages and the residual provisions Nil
In terms of RBI circular DOR No. BP.BC.62/21.04.048/2019-20 dated 17.04.2020 on COVID 19 Regulatory Package – Review of resolution Timelines under the Prudential Framework on resolution of stressed assets, none of the account was eligible for getting extension of the said resolution period.”
16) In terms of RBI Circular No. RBI/2018-19/2013 DBR No.BP.BC.45/21.04.048/2018-19 dated 07.06.2019 on Prudential frame work for Resolution of stressed assets, Bank has made total provision of Rs.190.08 Crore in 19 accounts.
17) The Non-Performing Loan Provisioning Coverage Ratio is ¬¬¬85.46% as on 31st March, 2020 as against 74.93% as on 31st March, 2019.
18) Bank has reported two loan accounts under Borrowal Fraud category to RBI in Quarter I of FY 2020-21 and amount outstanding was Rs.581.59 crore as on 31.03.2020. The accounts were already under NPA category and provision amounting to Rs.282.64 crores is held in the account as at 31.03.2020. Bank has made additional provision of Rs.74.73 crore (25% of remaining provision) as on 31.03.2020 and the remaining amount of Rs.224.22 crore has been charged to Reserves and deferred for adjustment in subsequent quarters in line with RBI circular No. BP.BC.92/21.04.048/2015-16 dated 18.04.2016
19) Other income of the Bank includes income from non-fund based activities such as brokerage, commission, fees, income from foreign exchange fluctuation, profit/ loss on sale of investments, recovery from write-off accounts and income from sale of priority sector lending certificates etc.
20) Number of investor Complaints: - (i) Outstanding at the beginning of the quarter – Nil (ii) Received during the quarter – 108 (iii) Disposed of during the quarter – 108 and Outstanding at the end of the quarter – Nil.
21) During the financial year 2019-20, Reserve Bank of India, in exercise of powers conferred under Section 47(A)(1)(c) read with section 51 and 46(4)(i) of The Banking Regulation Act, 1949, has imposed penalty of :
a) Rs. 50 lakhs (Rupees Fifty lakhs only) for non-compliance of RBI directives on “ KYC Norms/AML Standards/CFT/Obligation of banks and financial institutions under PMLA 2002” and “Opening of Current Accounts by Banks –Need for discipline”.
b) Rs 1 crore (Rupees One Crore only) on the Bank for delayed reporting of fraud on CRILC data platform.
22) As per the guidelines of the RBI on compliance with the Accounting Standards, the bank has adopted “Treasury Operation”,”Wholesale ”,”Retail”and “Other Banking Operation, as primary business segment and “Domestic” and “International” as secondary/ Geographic segments for the purpose of compliance with Accounting Standards 17 on segment reporting issued by Institute of Chartered Accountants of India (ICAI).
23) Figures of the corresponding previous periods have been regrouped / reclassified wherever considered necessary.