Secretarial Department Ref /Sec/92 Nd AGM/F7'7 /2019-2020 Department

Secretarial Department CIN L651 l 0TN l 926PLC001377

nd Ref /Sec/92 AGM/f7'7 /2019-2020 September 04, 2019 The General Manager The General Manager Department of Corporate Services Department of Corporate Services National Stock Exchange of India BSE Limited Exchange Plaza, C-1-Block G Listing Department Bandra Kurla Complex, Bandra-E Phiroze Jeejeeboy Tower Mumbai - 400 051 Dalal Street, Fort Mumbai - 400 001 Company symbol: LAKSHVILAS Security code no: 534690

Dear Sir / Madam,

Sub: Annual Report for the year 2018-19 of The Lakshmi Vilas Bank Limited ("Bank").

In compliance with the applicable regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, we herewith enclose the nd Notice of the 92 Annual General Meeting and Annual Report for the year 2018-19 of the Bank.

This is for your kind information.

Thanking you, Yours faithfully,

�� N Ramanathan Company Secretary

The Lakshmi Vilas Bank Ltd., Corporate Office, "LVB HOUSE", No.4, Sardar Patel Road, Guindy, Chennai - 600 032 I Phone: 044-22205306 I Email: [email protected] THE LAKSHMI VILAS BANK LIMITED CIN L65110TN1926PLC001377 Registered Ofﬁ ce: Salem Road, Kathaparai, Karur - 639 006. Corporate Ofﬁ ce: “LVB House”, No.4, Sardar Patel Road, Guindy, Chennai - 600 032. Website: www.lvbank.com, Tel No.: 044-22205306, Email: [email protected]

NOTICE TO THE MEMBERS

Notice is hereby given that the 92nd Annual General Meeting of the Members of The Lakshmi Vilas Bank Limited (“Bank”) will be held at the Registered Ofﬁ ce of the Bank, Salem Road, Kathaparai, Karur - 639 006 on Friday, 27th September, 2019 at 10.00 a.m. to transact the following business.

ORDINARY BUSINESS 1. To receive, consider and adopt the Audited Financial Statements of the Bank for the year ended 31st March, 2019 and the Report of the Directors’ and the Auditors’ thereon.

2. To appoint a Director in the place of Shri G Sudhakara Gupta, DIN 00005150, who retires by rotation and being eligible, offers himself for re-appointment.

3. To appoint auditors and if thought fi t to pass with or without modifi cation(s) the following resolution as an ORDINARY RESOLUTION. “RESOLVED THAT pursuant to the provisions of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the applicable provisions of Banking Regulation Act, 1949, including statutory modifi cation (s) or re-enactment thereof for the time being in force and the rules, circulars, guidelines issued by the Reserve Bank of India as applicable, M/s. P. Chandrasekar LLP, Chartered Accountants, Firm Registration No.000580S/ S200066, be and are hereby re-appointed as Statutory Auditors of the Bank to hold offi ce from the conclusion of this meeting till the conclusion of the next Annual General Meeting, on approved terms of the Reserve Bank of India on a proposed annual remuneration of ` 30,00,000/- (Rupees Thirty Lakhs Only) plus out of pocket expenses and applicable GST with the Board of Directors being authorized on the recommendations of the Audit Committee of the Board, to make such revision to the annual remuneration as it may deem necessary based on regulatory advice or on mutually agreed terms with the Statutory Auditors.”

SPECIAL BUSINESS 4. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as an ORDINARY RESOLUTION. “RESOLVED THAT the Board of Directors of the Bank be and is hereby authorized to appoint, in consultation with Statutory Auditors, the Branch Auditors who are qualifi ed to act as Auditors, including Statutory Auditors pursuant to the provisions of Section 143(8) and other applicable provisions of the Companies Act, 2013 for the purpose of audit of the Branches of the Bank and to decide the Branch Offi ces to be audited by such Branch Auditors and to fi x their remuneration and reimbursement of out of pocket expenses incurred, if any in connection with the Audit, based on the recommendation of the Audit Committee of the Board.”

5. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as an ORDINARY RESOLUTION. “RESOLVED THAT pursuant to the provisions of Sections 152 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualifi cation of Directors) Rules, 2014, as amended and applicable provisions of the Banking Regulation Act, 1949, as amended, Shri N Saiprasad, DIN 00137910, who was appointed as an Additional Director pursuant to Section 161 and other applicable provisions, if any of the Companies Act, 2013, be and is hereby appointed as a Director of the Bank, liable to retire by rotation.”

6. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as an ORDINARY RESOLUTION. “RESOLVED THAT pursuant to the provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualifi cation of Directors) Rules, 2014, as amended and provisions of the Banking Regulation Act, 1949, as amended and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, Smt. Supriya Prakash Sen, DIN 07932937, who was appointed as an Additional

1 Director pursuant to Section 161 and other applicable provisions, if any of the Companies Act, 2013, be and is hereby appointed as an Independent Director of the Bank, for a period of two (2) years from the date of this meeting, not liable to retire by rotation.”

7. To consider and if thought fi t, to pass with or without modifi cation(s) the following resolution as an ORDINARY RESOLUTION: “RESOLVED THAT pursuant to Sections 61(1)(a) of the Companies Act, 2013, as amended and the relevant rules formed thereunder and subject to all other applicable provisions, if any, the authorized share capital of the Bank be increased from ` 500,00,00,000/- (Rupees Five Hundred Crores Only) divided into 50,00,00,000 equity shares of ` 10/- each, to ` 650,00,00,000/- (Rupees Six Hundred and Fifty Crores Only) divided into 65,00,00,000 equity shares of ` 10/- each, ranking pari-passu in all respect with the existing equity shares of the Bank. RESOLVED FURTHER THAT the existing Clause 6 of the memorandum of association of the Bank be amended and shall stand substituted as follows, subject to the approval of the Reserve Bank of India. 6. The liability of the members is limited. The authorized capital of the Bank is ` 650,00,00,000/- (Rupees Six Hundred and Fifty Crores only) divided into 65,00,00,000 equity shares of `10/- each. RESOLVED FURTHER THAT Shri S. Sundar, Chief Financial Offi cer and Shri N. Ramanathan, Company Secretary, be and are hereby jointly or severally authorized to fi le necessary forms with the Registrar of Companies and do all such acts, deeds, matters and things as may be required to be done to give effect to the above resolution.”

8. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a SPECIAL RESOLUTION. “RESOLVED THAT pursuant to the relevant provisions of the memorandum and articles of association of the Bank, the provisions of Sections 23, 41, 42 and 62 and other applicable provisions, if any, of the Companies Act, 2013 read with the rules made thereunder ( including any amendments, statutory modifi cation(s) and / or re-enactment thereof for the time being in force) (the “Companies Act”) , the relevant provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (including any amendment, modifi cation, variation or re-enactment thereof) (the “ICDR Regulations”), the applicable listing agreements entered into by the Bank with the stock exchange(s) where the equity shares of the Bank of face value of ` 10 each (the “Equity Shares”) are listed or are currently proposed to be listed, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any amendment, modifi cation, variation or re-enactment thereof) (the “Listing Regulations”), to the extent applicable, the provisions of the Foreign Exchange Management Act, 1999 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof) and the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2017 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof), the Banking Regulation Act, 1949 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof), the Depository Receipts Scheme, 2014 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof) (the “DR Scheme”) and all other applicable statutes, rules, regulations, guidelines, notifi cations, circulars and clarifi cations as may be applicable, as amended from time to time, issued by the Government of India, Ministry of Corporate Affairs, the Reserve Bank of India, BSE Limited and National Stock Exchange of India Limited (collectively, the “Stock Exchanges”), the Securities and Exchange Board of India, and/ or any other regulatory / statutory authorities, in India or abroad, from time to time, to the extent applicable and subject to the approvals, permissions, consents and sanctions of any regulatory / statutory authorities and guidelines and clarifi cations issued thereon from time to time and subject to such conditions and modifi cations as may be prescribed by any of them while granting such approvals, permissions, consents and / or sanctions, which may be agreed to by the board of directors of the Bank (hereinafter referred to as the “Board” which term shall be deemed to include any committee(s) constituted / to be constituted by the Board to exercise its powers including powers conferred by this resolution), the Bank be and is hereby authorised to create, offer, issue and allot (including with provisions for reservations on fi rm and / or competitive basis, for such part of the issue and for such categories of persons as may be permitted) of such number of Equity Shares, global depository receipts (“GDRs”), American depository receipts (“ADRs”), foreign currency convertible bonds (“FCCBs”), fully convertible debentures / partly convertible debentures, preference shares convertible into Equity Shares, securities or financial instruments convertible into Equity Shares, securities linked to Equity Shares, securities with or without detachable warrants with right exercisable by the warrant holders to convert or subscribe to Equity Shares or any other eligible securities (hereinafter referred to as “Securities”), or any combination thereof, in one or more tranches, in the course of Indian and / or international offering(s) in one or more foreign markets, for cash, at such price or prices, at market price(s) or at a discount, as may be permissible under applicable law or premium to market price(s) in terms of the applicable regulations and as permitted under the applicable laws, in such manner in consultation with the merchant banker(s) and / or other advisor(s) or otherwise, for an aggregate amount not exceeding ` 1000 crores by way of o ne or more public and / or private offerings, including by way of a qualifi ed institutions placement in accordance with the provisions of Chapter VI of the ICDR Regulations (“QIP”), and / or any other permitted modes through a prospectus and / or an offer document and / or a private placement offer letter and / or such other

2 documents / writings / circulars / memoranda, by way of issue of any Securities, with or without premium, to be subscribed to in Indian and / or any foreign currencies by all eligible investors that may be permitted to invest in such issuance of Securities as per the extant regulations / guidelines, including eligible qualifi ed institutional buyers (“QIBs”) as defi ned in the ICDR Regulations, foreign or resident investors (including institutions, incorporated bodies, mutual funds, individuals or otherwise), venture capital funds (foreign or Indian), alternate investment funds, foreign portfolio investors, Indian and / or multilateral fi nancial institutions, mutual funds, insurance companies, non-resident Indians, stabilizing agents, pension funds or any other categories of investors (whether or not such investors are members of the Bank) or any combination of the above as may be deemed appropriate by the Board in its absolute discretion and, whether or not such investors are members of the Bank (hereinafter collectively referred to as the “Investors”), to all or any of them, jointly or severally through an offer / placement document and / or other letter or circular as may be deemed appropriate, in the sole discretion by the Board in such manner and on such terms and conditions as may be determined and deemed appropriate by the Board in its absolute discretion at the time of such issue and allotment (considering the prevailing market conditions and other relevant factors), including in relation to, the categories of Investors, to whom the offer, issue and allotment of Securities shall be made to the exclusion of others, in such manner, including allotment to stabilizing agent in terms of a green shoe option, if any, exercised by the Bank, and where necessary in consultation with the book running lead manager(s) and / or underwriters and / or stabilizing agent and / or other advisors, whether the Securities will be issued as fully or partly paid-up, making of calls and manner of appropriation of application money or call money in respect of different class(es) of Investor(s) and / or in respect of different Securities, number of Securities to be issued, face value, number of Equity Shares to be allotted on conversion / redemption / extinguishment of debt(s), rights attached to the warrants, period of conversion, fi xing of record date or book closure terms, if any, securities premium, or its equivalent amount in such foreign currencies as may be necessary; at such price or prices, (whether at prevailing market price(s) or at discount or premium to market price(s) permissible under the applicable regulations) as the Board may in its absolute discretion decide, in each case subject to applicable law.

RESOLVED FURTHER THAT the issue of Securities shall be subject to the following terms and conditions: (i) the Equity Shares that may be issued and allotted directly or on conversion of other convertible or exchangeable Securities that may be issued as aforesaid shall be subject to the provisions of the memorandum and articles of association of the Bank and rank pari – passu with the then existing Equity Shares in all respects including dividend; and (ii) the number and / or conversion price in relation to Equity Shares that may be issued and allotted on conversion of other convertible Securities that may be issued as aforesaid shall be appropriately adjusted for corporate actions such as bonus issue, rights issue, stock split and consolidation of share capital, merger, de-merger, transfer of undertaking, sale of division or any such capital or corporate restructuring.

RESOLVED FURTHER THAT the relevant date for the purpose of pricing the Securities shall, subject to applicable law, be determined by the Board or the Committee of Directors authorized by the Board as being the meeting in which the Board / Committee of Directors decides to open the issue of such Securities, subsequent to the receipt of shareholders’ approval in terms of the Companies Act, the ICDR Regulations, the DR Scheme and other applicable laws, regulations and guidelines.

RESOLVED FURTHER THAT in case of issue and allotment of Securities by way of QIP in terms of Chapter VI of the ICDR Regulations (hereinafter referred to as “Eligible Securities” within the meaning rendered to such term under Regulation 171(a) of the ICDR Regulations):

1. the allotment of the Eligible Securities, or any combination of the Eligible Securities as may be decided by the Board and subject to applicable laws, shall be completed within 365 days from the date of passing of this special resolution of the shareholders of the Bank or such other time as may be allowed under the ICDR Regulations;

2. the Eligible Securities under the QIP shall be allotted as fully paid up;

3. in the event Equity Shares are issued, the ‘relevant date’ for the purpose of pricing of the Equity Shares to be issued, shall be the date of the meeting in which the Board or the Committee of Directors authorized by the Board decides to open the proposed issue of Equity Shares, subsequent to the receipt of members’ approval in terms of provisions of Companies Act, 2013 and other applicable laws, rules, regulations and guidelines in relation to the proposed issue of the Equity Shares;

4. in the event that Eligible Securities issued are eligible convertible securities, the ‘relevant date’ for the purpose of pricing of the convertible securities to be issued, shall be, either the date of the meeting which the Board or a Committee of Directors authorised by the Board decides to open the proposed issue or the date on which the holders of such eligible convertible securities become entitled to apply for Equity Shares, as decided by the Board;

5. the tenure of the convertible or exchangeable Eligible Securities issued through the QIP shall not exceed sixty months from the date of allotment;

3 6. any issue of Eligible Securities made by way of a QIP shall be at such price which is not less than the price determined in accordance with the pricing formula provided under Part IV of Chapter VI of the ICDR Regulations (the “QIP Floor Price”). The Board may, however, subject to the approval of the shareholders of the Bank, issue Equity Shares at a discount of not more than ﬁ ve percent or such other discount as may be permitted under applicable regulations to the QIP Floor Price; and

7. the Eligible Securities allotted in the QIP shall not be eligible for sale by the respective allottees, for a period of one year from the date of allotment, except on a recognized stock exchange or except as may be permitted from time to time by the ICDR Regulations.

RESOLVED FURTHER THAT in case of any offering of Securities, including without limitation any GDRs / ADRs / FCCBs / other Securities convertible into Equity Shares, the Board is hereby authorized to issue and allot such number of Equity Shares as may be required to be issued and allotted upon conversion, redemption or cancellation of any such Securities referred to above in accordance with the terms of issue / offering in respect of such Securities and / or as may be provided in the offer document and / or offer letter and / or offering circular and / or listing particulars.

RESOLVED FURTHER THAT without prejudice to the generality of the above, the Securities may have such features and attributes or any terms or combination of terms in accordance with domestic and international practices to provide for the tradability and free transferability thereof as per applicable law including but not limited to the terms and conditions in relation to payment of interest, additional interest, premium on redemption, prepayment and any other debt service payments whatsoever including terms for issue of additional Equity Shares or variation of the conversion price of the Securities during the duration of the Securities and the Board be and is hereby authorised in its absolute discretion, in such manner as it may deem ﬁ t, to dispose of such of the Securities that are not subscribed in accordance with applicable law.

RESOLVED FURTHER that the Board be and is hereby authorized to do all such acts, deeds, actions and sign such documents as may be required in furtherance of, or in relation to, or ancillary to, the offering, issue and allotment of Securities, including authorizing any director(s) or offi cer(s) of the Bank to sign offer documents, execute any necessary documents, agreements, forms, deeds, appoint intermediaries, open and close the period of subscription, determine the Investors or class(es) of Investors to whom the offer is to be made, determine the terms and conditions of the issuance of Securities, including the timing, fl oor price (including any discount thereto, as may be permitted under applicable law) and the issue price in respect of the Securities, fi le any necessary forms with regulatory authorities and allot the Securities and to amend, vary or modify any of the above as the Board or Committee of Directors as authorized by the Board or such authorised persons may consider necessary, desirable or expedient, and enter into and execute all such arrangements / agreements as the case may be with any lead managers, managers, underwriters, advisors, lawyers, guarantors, depositories, custodians and all such agencies as may be involved or concerned in such offerings of the Securities and to remunerate all such agencies including payment of commissions, brokerage, fees or the like, and also to seek the listing of such Securities in one or more stock exchanges in India and / or overseas as the case may be.

RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers herein conferred to any Committee of Directors or any whole-time director(s) of the Bank in such manner as they may deem fit in their absolute discretion with the power to take such steps and to do all such acts, deeds, matters and things as they may deem fit and proper for the purposes of the Issue and settle any questions or difficulties that may arise in this regard to the Issue without being required to seek any further consent or approval of the members or otherwise to the end and intent that the members of the Bank shall be deemed to have given their approval thereto expressly by the authority of this resolution.”

9. To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a SPECIAL RESOLUTION: “RESOLVED THAT pursuant to Section 42 and other applicable provisions, if any, of the Companies Act, 2013 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof for the time being in force) read with the rules made thereunder including Companies (Prospectus and Allotment of Securities) Rules, 2014 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof for the time being in force) (the “Companies Act”), Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof for the time being in force), the applicable provisions of the Banking Regulation Act, 1949 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof for the time being in force), and the rules, circulars and guidelines issued by the Reserve Bank of India (“RBI”) from time to time (including any statutory amendment(s) or modifi cation(s) or re-enactment(s) thereof for the time being in force) and all other relevant provisions of applicable law(s), the provisions of the memorandum and articles of association of the Bank and subject to such other approval(s), consent(s), permission(s) and sanction(s) as may be necessary from the concerned statutory authority(ies) including RBI, the approval of the members of the Bank be and is hereby

4 accorded to the Board of Directors of the Bank (hereinafter referred to as “Board” and which term shall be deemed to include any Committee of the Board or any other persons to whom powers are delegated by the Board as permitted under the Companies Act, 2013) for borrowing / raising of funds in Indian / foreign currency by issue of debt securities including but not limited to refi nance from term lending institutions and non-convertible debentures, bonds (including bonds forming part of Tier I capital / Tier II Capital in accordance with and subject to the terms and conditions specifi ed in the Basel III Capital Regulations prescribed by RBI, long terms infrastructure bonds or such other bonds as may be permitted by RBI from time to time), or a combination thereof, in domestic and / or overseas market, on a private placement basis and / or for making offers and / or invitations therefor and / or issue(s) / issuances therefor, on private placement basis, for a period of one year from the date hereof, in one or more tranches and / or series and under one or more shelf disclosure documents and / or one or more letters of offer and on such terms and conditions for each series / tranches including the price, coupon, premium, discount, tenor etc. as deemed fi t by the Board, as per the structure and within the limits permitted by RBI, of an amount not exceeding ` 500 crores (Rupees Five Hundred crores), in aggregate for additional Tier I and / or Tier II capital within the overall borrowing limits of the Bank, as approved by the members of the Bank from time to time.

RESOLVED FURTHER THAT the Board be and is hereby authorized to negotiate, modify and fi nalize the terms and conditions of the debt securities and sign the relevant documents / agreements in connection with the private placement of the debt securities, including without limitation, the private placement offer letter (along with the application form), information memorandum, disclosure documents, debenture subscription agreement, debenture trust deed and any other documents as may be required, and do all such acts, deeds, actions and sign such documents as may be required in furtherance of, or in relation to, or ancillary to, the offering(s), issuance(s) and / or allotment(s) on private placement of debt securities by the Bank and to further delegate the above powers to any Committee of Directors or any whole-time director of the Bank in such manner as the Board may deem fit in its absolute discretion with the power to take such steps and to do all such acts, deeds, matters and things as they may deem fit and proper for the purposes of giving effect to this resolution and settle any questions or difficulties that may arise in this regard without being required to seek any further consent or approval of the members of the Bank or otherwise to the end and intent that the members of the Bank shall be deemed to have given their approval thereto expressly by the authority of this resolution”.

BY ORDER OF THE BOARD For THE LAKSHMI VILAS BANK LIMITED

N. RAMANATHAN Place: Chennai Company Secretary Date: 28.08.2019 ACS No. 28366

Notes: 1. An Explanatory Statement as required under Section 102 of the Companies Act, 2013, pertaining to the special businesses contained in Item No.4 to 9 above is annexed herewith. 2. The Additional information pursuant to Regulation 36 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in compliance of SS – 2 - Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India (ICSI) as amended in respect of the Director seeking re-election vide Item No.2 are detailed elsewhere in the Notice. The additional information for Item Nos. 5 & 6 are provided as a part of the explanatory statement. The Directors have furnished the requisite declaration for appointment. 3. All relevant documents referred to in the Notice are open for inspection at the Registered Ofﬁ ce of the Bank at Kathaparai, Karur, where this meeting is held and copies thereof of the documents are open for inspection at the Corporate Ofﬁ ce of the Bank, Guindy, Chennai on all working days between 11.00 a.m. to 01.00 p.m. upto the date of the Annual General Meeting. 4. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY / PROXIES TO ATTEND AND VOTE INSTEAD OF HIM / HER. SUCH A PROXY / PROXIES NEED NOT BE A MEMBER OF THE BANK. A PERSON CAN ACT AS PROXY ON BEHALF OF MEMBERS NOT EXCEEDING FIFTY (50) AND HOLDING IN THE AGGREGATE NOT MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE BANK. THE INSTRUMENT OF PROXY IN ORDER TO BE EFFECTIVE, SHOULD BE DEPOSITED AT THE REGISTERED OFFICE OF THE BANK, DULY COMPLETED AND SIGNED, NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. A PROXY FORM IS SENT HEREWITH. PROXIES SUBMITTED ON BEHALF OF THE COMPANIES, SOCIETIES ETC., MUST BE SUPPORTED BY AN APPROPRIATE RESOLUTION / AUTHORITY, AS APPLICABLE.

5 5. Corporate member who intends to authorize their representative(s) to attend the Annual General Meeting and vote on their behalf should attach the certifi ed true copy of the Board Resolution authorizing them to attend and vote on their behalf. 6. In compliance of SEBI direction to all listed companies to maintain all works relating to share registry – both physical and electronic at single point i.e. either in house or by SEBI Registered “Registrar & Transfer Agent (RTA)”, Bank has appointed M/s. Integrated Registry Management Services Private Limited, Chennai as Share Transfer Agent for both physical and demat segments with effect from 30.01.2003. Address of Share Transfer Agent: M/s. Integrated Registry Management Services Private Limited II fl oor, “Kences Towers”, No.1 Ramakrishna Street, North Usman Road, T.Nagar, Chennai – 600 017 Ph: 044-28140801/2/3 Fax: 28142479 Email: [email protected] 7. Members are requested to notify any change in their address along with the pincode immediately to Share Transfer Agent and in case their shares are held in demat form; this information should be sent to the concerned Depository Participant. 8. Shareholders who hold shares in physical form may avail of the Nomination Facility at any time by submitting Nomination Form in Form No.SH – 13 as prescribed under Section 72 of the Companies Act, 2013. While the Form is available in the MCA website, the form may also be obtained from our Registrar & Share Transfer Agent, M/s. Integrated Registry Management Services Private Limited. The duly fi lled in form should be submitted to our Registrar & Share Transfer Agent for registering the nomination. Shareholders holding shares in electronic form are requested to contact their Depository Participants directly for recording their nomination. 9. Unclaimed Dividends Shareholders and Benefi cial owners who have not so far encashed / claimed the dividends for the last 7 years i.e. from 2011-2012 to 2016-2017 have to submit the dividend warrant(s) if any available with them for revalidation to the Registrar & Share Transfer Agent, M/s. Integrated Registry Management Services Private Limited, II Floor, “Kences Towers”, No. 1, Ramakrishna Street, North Usman Road, T. Nagar, Chennai – 600 017. Shareholders who have lost the dividend warrants are requested to approach the Bank at its Secretarial Department at the Corporate Offi ce / Registered Offi ce or the Share Transfer Agent at the above address. In terms of Section 124(5) read with Section 125 of the Companies Act, 2013 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, (‘IEPF Rules’), as amended, all shares in respect of which dividend has not been claimed by the shareholders for last seven consecutive years shall be transferred by the Bank in the name of Investor Education and Protection Fund and credited to the DEMAT account of the IEPF Authority. In line with the applicable proviso, the Bank has transferred the shares pertaining to the unclaimed dividend for the years 2010-11 to the IEPF Authority. The details of the unclaimed dividend are available in the website of Investor Education and Protection Fund as well as the website of our Bank and the shareholders may verify their details from the said websites and approach us for claim. In this regard, the Bank has sent individual notices on 12th July 2019 to the latest available addresses to those shareholders whose dividends are lying unclaimed since 2011-12 for the last 7 consecutive years advising them to immediately claim the dividends from the fi nancial year 2011-12 onwards in order to avoid transfer of the concerned shares to IEPF Suspense account. In the event of failure to claim the dividends as aforesaid, the Bank will transfer the concerned shares in respect of which the dividends are lying unpaid to the IEPF Suspense account (in Dematerialized form) as provided in the IEPF Rules. For any assistance / clarifi cations, Shareholders who have not claimed their dividends from the year 2011-12 may write to M/s. Integrated Registry Management Services Private Limited, Chennai, our Registrar and Share Transfer Agent. Shareholders may also contact the Secretarial Department at the Corporate Offi ce of the Bank for further details and for making a valid claim for the unclaimed dividends. In case of non-receipt of any valid claim requests from the concerned on or before 13.10.2019, the Bank will transfer the underlying shares to the IEPF account as provided in the IEPF Rules. Further, in terms of the IEPF Rules, the statement containing the details of name, folio number, demat account number and number of shares due for transfer is available in our website www.lvbank.com. Shareholders may note that pursuant to Section 124(6) of the Companies Act, 2013, as amended, read with Rule 7 of IEPF Rules, shares which have been transferred to the IEPF suspense account may be claimed by the concerned by fi ling of Form IEPF 5 and by following the procedure as provided in the IEPF Rules. The Bank has also appointed a nodal offi cer for the purpose of coordination with IEPF authority. The contact information of the nodal offi cer has been made available online as per the IEPF Rules and can be accessed at https://www.lvbank. com/shareholder-info.aspx

6 10. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Bank or with our Registrar & Transfer Agent, M/s. Integrated Registry Management Services Private Limited, Chennai. In line with SEBI directive, shareholders holding shares in physical form and who have not updated their PAN and Bank Account details with the Bank shall be subject to enhanced due diligence by the Bank i.e., any transaction in such physical securities shall attract enhanced supervision by the Company (Bank) and RTA. 11. Green Initiatives in Corporate Governance – Shareholders who have not registered their email address so far are requested to register their email address (for demat holders - with their respective DPs and for holders in physical form - with our Registrar & Transfer Agent, M/s. Integrated Registry Management Services Private Limited, Chennai) to enable to send all future correspondence through email. 12. Electronic copy of the Annual Report for the year 2018-19, Notice of the 92nd Annual General Meeting of the Bank inter alia indicating the process and manner of e-voting along with Attendance slip and Proxy Form is being sent to all the members whose email IDs are registered with the Bank / Depository Participant(s) for communication purposes unless any member has requested for a hard copy of the same. For members who have not registered their email address, physical copies of the 92nd Annual Report, Notice of the 92nd Annual General Meeting of the Bank inter alia indicating the process and manner of e-voting along with Attendance Slip and Proxy Form is being sent in the permitted mode. The members may note that attendance at the meeting will be regulated through the duly fi lled in attendance slip and verifi cation of the same with the records held by the Bank. 13. Members may also note that the Notice of the 92nd Annual General Meeting and the Annual Report for 2018-2019 will also be available on the Bank’s website www.lvbank.com for their download. The physical copies of the aforesaid documents will also be available at the Registered Office of the Bank at Kathaparai, Karur, where this meeting is held and Corporate Offi ce of the Bank, Guindy, Chennai for inspection between 11.00 a.m. to 01.00 p.m. on working days. Even after registering for e-communication, members are entitled to receive such communication in physical form, upon making a request for the same, by free of cost. For any communication, the shareholders may also send requests to the Bank’s investors grievance email id: [email protected]. 14. Voting through electronic means In compliance with provisions of Section 108 of the Companies Act, 2013 and the Companies (Management and Administration) Rules, 2014, as amended read with Regulation 44 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the Bank is pleased to provide members holding shares in physical or dematerialized form, facility to exercise their right to vote at the 92nd Annual General Meeting (AGM) by electronic means through ‘Remote e-Voting’ services provided by National Securities Depository Limited (NSDL). The “cut-off date” for the “Remote e-Voting” is 20th September, 2019. The instructions for e-voting are given at the end of this notice. Consequently, as per the applicable statutory provisions, voting by show of hands will not be available to the shareholders at the 92nd Annual General Meeting. 15. In Compliance with the Companies (Management and Administration) Amendment Rules, 2015, the Bank is also pleased to offer the facility for voting through physical ballot at the AGM. The Shareholders, who are eligible to vote as on the “cut-off” date being 20th September, 2019, but have not exercised their right to vote through e-voting shall cast their votes at the AGM through Physical Ballots for all the resolutions set out in the Notice. Shareholders who have exercised their right to vote through e-voting may attend the AGM but shall not be entitled to vote at the AGM. A person who is not a Member as on the cut-off date should treat the Annual Report of the Bank for the Financial Year 2018-19, the Notice of the 92nd Annual General Meeting and Explanatory Statement for information purposes only. 16. By virtue of clause 127 (2) of the Articles of Association of the bank, no suit or other proceeding by or at the instance of any Member of the Bank relating to any General Meeting of the Bank, whether Annual General Meeting or Extraordinary General Meeting or meetings of Board or Committee of Directors, seeking any direction with reference to such meeting or to restrain any proceedings thereat or the passing of any resolution or the transaction of any business shall be instituted in any Court other than the Courts in Karur / Chennai which is the places of residence of the Bank for this purpose by reason of location of its Registered Offi ce / Corporate Offi ce respectively. 17. The Bank’s shares are traded in demat form in the Stock Exchanges “The National Stock Exchange of India Limited” & “BSE Limited”. SEBI vide notifi cation dated June 8, 2018 had amended the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended wherein except in case of transmission or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialized form with a Depository. From April 1, 2019, transfer of shares in physical form will not be permitted. Hence, you are requested to note the same and take necessary steps to dematerialise your shares that are held in physical form.

7 Additional information pursuant to Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in compliance with SS – 2 - Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India (ICSI) in respect of the Director seeking re-election.

Item No. 2 Re-appointment of Shri G Sudhakara Gupta, Director: Shri G Sudhakara Gupta, aged about 60 years belongs to one of the promoter groups of the Bank. He is a Non-Executive & Non-Independent Director. He has been associated with the Bank since 27.09.2017 in his present term. He holds a Bachelor’s degree in Commerce (B Com).

He has 37 years of Business experience and he had worked and gained varied knowledge at different levels in Private Sector and Quasi-Government undertakings. He had worked as Director of a multi-crore construction company, XS Real Properties Private Limited at Chennai since its inception. He was responsible for marketing, marketing ﬁ nance, operations, procurement of land, ofﬁ ce administration, liaising with Government authorities / agencies etc., obtaining building plan approvals and sanctions for various projects of the company supported ably by a Core Team of Professionals having core competence in their respective areas. Currently he is working as a Consultant for the above company. He had also served on the Board of the Bank from 2006 to 2009.

The Board Committee membership details of Shri G Sudhakara Gupta as on March 31, 2019 is as follows:

S. No. Name of the Board Committees Member / Chairman 1 Audit Committee Member 2 Stakeholders Relationship Committee Member 3 Risk Management Committee Member 4 Customer Service Committee Member 5 IT Strategy Committee Member

As on March 31, 2019, Shri G Sudhakara Gupta does not hold any directorship in any other Listed Company. The details pertaining to the directorships held by him in other Companies (unlisted) are as follows. He does not hold any Committee position in these Companies:

Sl. No. Name of the Company 1 Amaryllis Properties Private Limited 2 Magenta RE Asset Private Limited 3 Holzwerk Interior Private Limited 4 Jacaranda Properties Private Limited 5 Pristine Propservices Private Limited (Under Process of Strike Off) 6 Alpine Holdings LLP 7 Tangerine Stock Estate LLP

Being a Non-Executive and Non-Independent Director, Shri G Sudhakara Gupta does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings. The details of his Board / Board Committee meetings attendance during the year 2018-19 are as follows:

No. of Board No. of Committee No. of Board Percentage of No. of Committee Percentage of Meetings entitled to meetings entitled to Meetings attended attendance meetings attended attendance attend attend 17 17 100% 24 24 100%

Shri G Sudhakara Gupta holds 2,666 equity shares in the bank as on 31.03.2019. In the opinion of the Board, associating with Shri G Sudhakara Gupta has been and further will be of immense beneﬁ t to the Bank on account of his vast experience and hence it is desirable to continue to avail services of Shri G Sudhakara Gupta as a Non-Executive and Non-Independent Director liable to retire by rotation. Accordingly, the Board recommends the resolution in relation to re-appointment of Shri G Sudhakara Gupta as Non-Executive and Non-Independent Director, for the approval by the shareholders of the Bank as an Ordinary Resolution.

8 Shri G Sudhakara Gupta is not related to any other directors in the Bank and none of the directors and Key Managerial Personnel of the Bank and their relatives other than Shri G Sudhakara Gupta is concerned or interested, ﬁ nancial or otherwise, in this resolution.

Item No. 3 Note on appointment of Statutory Central Auditors: M/s. P. Chandrasekar LLP, Chartered Accountants, Bangalore was appointed as the Statutory Central Auditors by the Members at the 91st Annual General Meeting held on 08.08.2018 to hold ofﬁ ce from the conclusion of the 91st Annual General Meeting till conclusion of the 92nd Annual General Meeting. In terms of Section 139 of the Companies Act, 2013, the approval is being sought from the members for the re-appointment of M/s. P. Chandrasekar LLP, Chartered Accountants as Statutory Central Auditors for the ﬁ nancial year 2019-20.

The Audit Committee of the Board and the Board of Directors have recommended the re-appointment of M/s. P. Chandrasekar LLP, Chartered Accountants, Bangalore, as the Statutory Central Auditors of the bank to audit the accounts for the ﬁ nancial year 2019-20 including Tax Audit and also to conduct “Limited Reviews” occurring between ensuing Annual General Meeting and Next Annual General Meeting. The Bank had requested for an approval from the Reserve Bank of India as per applicable provisions of the Banking Regulation Act, 1949 and the Reserve Bank of India has accordingly approved the same vide their letter ref DBS.ARS.No.1196/08:14:005/2019-20 dated August 23, 2019. The proposed annual remuneration for the Statutory Auditors is ` 30,00,000/- (Rupees Thirty Lakhs only) plus out of pocket expenses and applicable GST. The resolution also seeks authorization to the Board of Directors on the recommendations of the Audit Committee of the Board, to make such revision to the annual remuneration as it may deem necessary based on regulatory advice or on mutually agreed terms with the Statutory Auditors.

Accordingly it is being proposed by the Board to re-appoint M/s. P. Chandrasekar LLP, Chartered Accountants, Bangalore, Firm Registration No.000580S/S200066 to hold ofﬁ ce from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting

None of the Directors and Key Managerial Personnel and their relatives are in anyway concerned or interested, ﬁ nancial or otherwise, in this resolution.

Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013 Item No. 4 In terms of Section 143(8) of the Companies Act, 2013, the Branch Offi ces of the Bank have to be audited either by Statutory Auditors or other qualifi ed Auditors. Bank intends to entrust the Audit of Branch Offi ces either to the Statutory Auditors or to other qualifi ed Auditors in consultation with Statutory Auditors on such remuneration and on such terms and conditions as the Board deems fi t based on the recommendations of the Audit Committee of the Board. None of the Directors of the bank and Key Managerial Personnel of the bank and their relatives is interested, fi nancial or otherwise, in this resolution.

Item No. 5 Shri N Saiprasad, DIN. 00137910, aged about 55 years, belongs to one of the promoter groups of the Bank. He is a Non-Executive & Non-Independent Director. He has been associated with the Bank since 30.03.2019 in his present term. In the past, he had served on the Board of the Bank from 1990 to 1998 and 2006 to 2014. He has 30 years of business experience in the textile industry. Currently he is the Managing Partner in M/s. Venkateswara Exports, Karur, and also a partner in few other ﬁ rms. He is a MBA graduate. Since Shri N Saiprasad was appointed on 30.03.2019, he was not a member in any Committee and thus the disclosure with respect to his committee memberships & attendance is not applicable. Further, he does not hold any directorship in any other Company as on 31.03.2019. He holds 1,34,865 equity shares in the bank as on 31.03.2019. Being a Non-Executive and Non-Independent Director, Shri N Saiprasad does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings. In the opinion of the Board, associating with Shri N Saiprasad has been and further will be of immense beneﬁ t to the Bank on account of his business knowledge and experience and it is desirable to continue to avail services of Shri N Saiprasad as a Non-Executive and Non-Independent Director liable to retire by rotation. Accordingly, the Board recommends the resolution in relation to appointment of

9 Shri N Saiprasad as Non-Executive and Non-Independent Director, for the approval by the shareholders of the Bank as an Ordinary Resolution.

Shri N Saiprasad is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Shri N Saiprasad is concerned or interested, ﬁ nancial or otherwise, in this resolution.

This Explanatory Statement may also be regarded as a disclosure under Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SS – 2 - Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India (ICSI).

Item No. 6 Smt. Supriya Prakash Sen, DIN. 07932937, aged about 54 years was appointed as an Additional Director in Independent Category on 14.06.2019. She holds a Bachelors’ degree in engineering (Electronics and Communication) and is a gold medalist from the Bangalore University and holds a post – graduate diploma in management from Indian Institute of Management, Calcutta. She has been appointed as Director specializing in Information Technology and Finance as per the provisions of the Banking Regulation Act, 1949. She has about 25+ years of experience in banking and ﬁ nancial services in executive leadership positions in multinational banks and investment companies across India, China, South East Asia and Middle East. She has extensive background in Project Finance, Structured Finance and Sustainable Finance.

Since Smt. Supriya Prakash Sen, was appointed after the end of the ﬁ nancial year 31.03.2019, disclosure with respect to her committee memberships & attendance is not applicable. She does not hold any equity shares in the bank as on 31.03.2019.

Being a Non-Executive and Independent Director, Smt. Supriya Prakash Sen, does not draw any remuneration from the Bank apart from the sitting fees paid for attending the Board / Board Committee meetings.

Smt Supriya Prakash Sen is an Independent Director in ASEAN Financial Innovation Network (A Singapore Company Limited by guarantee). She does not hold any Committee position in that Company.

In the opinion of the Board, Smt. Supriya Prakash Sen fulfi ls the conditions specifi ed in the Companies Act, 2013 and rules made thereunder for her appointment as an Independent Director of the bank and is independent of the management. The Board considers that her banking knowledge and IT and Financial expertise would be of immense benefi t to the Bank and it is desirable to avail services of Smt. Supriya Prakash Sen as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Smt. Supriya Prakash Sen as an Independent Director for a period of two (2) years, for the approval by the shareholders of the Bank as an Ordinary Resolution.

Smt. Supriya Prakash Sen is not related to any other Directors in the Bank and none of the Directors and Key Managerial Personnel of the bank and their relatives other than Smt. Supriya Prakash Sen is concerned or interested, ﬁ nancial or otherwise, in this resolution.

This Explanatory Statement may also be regarded as a disclosure under Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 & SS – 2 - Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India (ICSI).

Item No. 7 It is proposed to alter and increase the authorized share capital from ` 500,00,00,000 (Rupees Five Hundred Crores Only) divided into 50,00,00,000 equity shares of `10/- each to ` 650,00,00,000 (Rupees Six Hundred and Fifty Crores Only) divided into 65,00,00,000 equity shares of ` 10/ each. Accordingly, Clause 6 of the memorandum of association of the Bank is sought to be amended to reﬂ ect the increased capital.

The resolutions contained in Item No.7 seek to increase the authorized share capital of the Bank, as aforesaid and to alter the memorandum of association of the Bank, consequent to such increase in the authorized share capital of the Bank.

The Board of Directors recommends the Resolution set out at Item No.7 for the approval of the members of the Bank.

None of the directors of the Bank and key managerial personnel of the Bank, and their relatives are concerned or interested, ﬁ nancial or othersie in this Resolution.

10 Item No. 8 The Bank has been exploring various options for raising funds for augmenting the Tier I capital funds of the Bank to support business growth as directed by RBI; including by way of issue of equity shares of the Bank of face value of ` 10 each (the “Equity Shares”), global depository receipts (“GDRs”), American depository receipts (“ADRs”), foreign currency convertible bonds (“FCCBs”), fully convertible debentures / partly convertible debentures, preference shares convertible into Equity Shares, securities or financial instruments convertible into Equity Shares, securities linked to Equity Shares, securities with or without detachable warrants with right exercisable by the warrant holders to convert or subscribe to Equity Shares or any other eligible security (hereinafter referred to as “Securities”), or any combination thereof, in one or more tranches, by way of one or more public and / or private offerings, including by way of a qualifi ed institutions placement in accordance with the provisions of Chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (including any amendment, modifi cation, variation or re-enactment thereof) (the “ICDR Regulations”), and such qualifi ed institutions placement (“QIP”), and / or any other permitted modes through a prospectus and / or an offer document and / or a private placement offer letter and / or such other documents / writings / circulars / memoranda, by way of issue of any Securities, with or without premium, to be subscribed to in Indian and / or any foreign currencies by all eligible investors that may be permitted to invest in such issuance of Securities as per the extant regulations / guidelines. Accordingly, the board of directors of the Bank (hereinafter referred to as the “Board” which term shall be deemed to include any Committee(s) constituted/ to be constituted by the Board to exercise its powers including powers conferred by this resolution), at its meeting held on 28th August, 2019 has accorded its approval for raising of funds by the Bank as set out above, subject to members’ approval and such other approvals as may be required under the applicable laws. Whilst no specifi c instrument has been identifi ed at this stage, in the event, the issue will be structured in such a manner that the proceeds of the same would not exceed ` 1000 crores. The resolution proposed is an enabling resolution and the detailed terms and conditions of the issue of the Securities, including the exact price, proportion and timing of the issue of the Securities, and the number of tranches in which such issue be undertaken, will be decided by the Board in consultation with lead managers, advisors and such other authorities and agencies as may be required to be consulted by the Bank in due consideration of prevailing market conditions and other relevant factors after meeting the specifi c requirements. The proposal therefore seeks to confer upon the Board the absolute discretion to determine the terms of issue. As the pricing of the offer cannot be decided except at a later stage, it is not possible to state the price of Securities to be issued. However, the same (including discount permissible under Regulation 176 of the ICDR Regulations, if applicable) would be in accordance with the provisions of the ICDR Regulations, the Companies Act, 2013 read with the rules made thereunder (including any amendments, statutory modifi cation(s) and/ or re-enactment thereof for the time being in force) (the “Companies Act”), or any other guidelines / regulations / consents as may be applicable or required. Therefore, an enabling resolution is being proposed to give Board an adequate fl exibility and absolute discretion to determine the terms of issue in consultation with the lead managers and others. The Board may at its discretion adopt any one or more of the mechanisms prescribed above to meet its objectives as stated above without the need for further approval from the members of the Bank. In the event of the issue of the equity shares as aforesaid is by way of a QIP: (i) the special resolution also seeks to empower the Board to undertake a QIP as defi ned by ICDR Regulations; (ii) the issue and allotment of Equity Shares shall be made only to QIBs within the meaning of the ICDR Regulations and such Equity Shares shall be fully paid up on its allotment; (iii) the Equity Shares shall not be eligible to be sold for a period of one year from the date of allotment, except on a recognized stock exchange or except as may be permitted from time to time by the ICDR Regulations; (iv) the allotment of the specifi ed securities, or any combination of specifi ed securities, as may be decided by the Board, shall be completed within 365 days from the date of this resolution or such other time as may be permitted under the ICDR Regulations; and (v) none of the promoters or directors intend to make any contribution either as part of the QIP or in furtherance of the objects of the QIP. In connection with the proposed issue of Securities, the Bank is required, inter alia, to prepare various documentations and execute various agreements. The Bank is yet to identify the investor(s) and decide the quantum of Securities to be issued to them. Accordingly, it is proposed to authorize the Board to identify the investor(s), issue such number of Securities, negotiate, fi nalize and execute such documents and agreements as may be required and do all such acts, deeds and things in this regard for and on behalf of the Bank. The ‘Relevant Date’ for this purpose will be the date as determined in accordance with the ICDR Regulations and as mentioned in the resolution. The issue / allotment / conversion would be subject to the applicable regulatory approvals, if any. The issuance and allotment of Securities including equity shares to be allotted on conversion of Securities to foreign / non-resident investors would be subject to the applicable foreign investment cap.

11 Since the proposed fund raising activities may, inter alia, result in the issue of Equity Shares to investors who may or may not be members of the Bank, consent of the members is being sought pursuant to Section 62(1) (c) and other applicable provisions of the Companies Act, 2013 as well as applicable rules notiﬁed by the Ministry of Corporate Affairs, the ICDR Regulations and any other law for the time being in force and being applicable and in terms of the provisions of the Listing Regulations.

The resolutions contained in Item No. 8 of the accompanying Notice, accordingly, seek shareholders’ approval through special resolution for raising funds as above and this special resolution, if passed, will have the effect of allowing the Board to offer, issue and allot, inter alia, Equity Shares to the investors who may or may not be the existing shareholders of the Bank. The Equity Shares thus issued, if any, shall rank in all respects pari passu with the existing Equity Shares, including entitlement of dividends, if any.

The prop osed issue of Securities is in the best interest of the Bank and your directors recommend the resolution for your approval.

None of the promoters, directors and key managerial personnel of the Bank and their relatives are concerned or interested in the proposed resolution except to the extent of their shareholding in the Bank.

Item No. 9 The Bank has been borrowing funds for augmenting capital funds to support business growth as directed by RBI within the limits approved by the members of the Bank by way of issuance of various debt securities (bonds / debentures) as permitted by the RBI and in accordance with the provisions of Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof for the time being in force) and other applicable laws, from time to time. In terms of Section 42 of the Companies Act, 2013 read with Companies (Prospectus and Allotment of Securities) Rules, 2014 (including any amendments, statutory modifi cation(s) and / or re-enactment thereof for the time being in force), the Bank is permitted to make a private placement of securities subject to the condition that the proposed offer of securities or invitation to subscribe securities has been previously approved by the members of the Bank, by a special resolution, for each of the offers or invitations / subscriptions. In case of offer or invitation for subscription of non-convertible debentures, it shall be suffi cient if the Bank passes a special resolution only once in a year for all the offers or invitation for subscription of such debentures during the year.

The Board of Directors have proposed to obtain the consent of the members of the Bank for borrowing / raising funds in Indian / foreign currency by issue of debt securities pursuant to the relevant provisions of the applicable circulars or guidelines issued by RBI, up to ` 500 crores (Rupees Five Hundred crores) in aggregate, for additional Tier I and / or Tier II capital, in one or more tranches in domestic and / or overseas market, as per the structure and within the limits permitted by RBI and other regulatory authorities, to eligible investors on private placement basis, on such terms and conditions as the Board of Directors or any Committee(s) thereof or any whole-time director(s) of the Bank as may be authorised by the Board, from time to time, determine and consider proper and appropriate for the Bank. This would form part of the overall borrowing limits under Section 180(1)(c) of the Companies Act, 2013. This resolution under Section 42 of Companies Act, 2013 shall be valid for a period of one year from the date of passing of the resolution.

The pricing of the debt securities referred above depends primarily upon the rates prevailing for risk free instruments, rates on other competing instruments of similar rating and tenor in the domestic or overseas markets, investor appetite for such instruments and investor regulations, which enable investments in such instruments. Further, debt securities would be issued for cash either at par or premium or at discount to the face value depending upon the prevailing market conditions, as permitted under the Laws. Accordingly, the approval of the members of the Bank is being sought by way of special resolution as set out in Item No.9 of this Notice for borrowing / raising funds in Indian / foreign currency by issue of debt securities on private placement basis.

The proposed issue is in the best interest of the Bank and your directors recommend the resolution for your approval.

BY ORDER OF THE BOARD For THE LAKSHMI VILAS BANK LIMITED

N. RAMANATHAN Place: Chennai Company Secretary Date: 28.08.2019 ACS No. 28366

12 E – Voting

Dear Shareholders, In terms of Sections 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended the Bank is providing the e-voting facility to its members holding shares in physical or dematerialized form as on 20.09.2019, to exercise their right to vote by electronic means on any or all of the business specified in the accompanying notice to the Annual General Meeting (“AGM”) of the Bank. The Bank has appointed Shri Kaliappagounder Muthusamy (Practicing Company Secretary, CP No. 3176), Partner, M/s. JMACS Associates, Coimbatore as the scrutinizer for conducting the e-voting process in a fair and transparent manner. The results shall be declared not later than 48 hours from the conclusion of the AGM of the Bank. The results declared along with the Scrutinizer’s Report shall be made available on the Bank's website and shall be communicated to the Stock Exchanges. The Bank has engaged the services of NSDL as the authorized agency to provide the e-voting facilities. The voting period begins on 24.09.2019 at 10.00 AM and ends on 26.09.2019 at 5.00 PM. During this period shareholders’ of the Bank, holding shares either in physical form or in dematerialized form, as on the cut-off date 20.09.2019 may cast their vote electronically. The e-voting module shall be disabled by NSDL for voting thereafter.

The instructions for shareholders voting electronically are as under: How do I vote electronically using NSDL e-Voting system? The way to vote electronically on NSDL e-Voting system consists of “Two Steps” which are mentioned below: Step 1 : Log-in to NSDL e-Voting system at https://www.evoting.nsdl.com/ Step 2 : Cast your vote electronically on NSDL e-Voting system.

Details on Step 1 is mentioned below: How to Log-in to NSDL e-Voting website? 1. Visit the e-Voting website of NSDL. Open web browser by typing the following URL: https://www.evoting.nsdl.com/ either on a Personal Computer or on a mobile. 2. Once the home page of e-Voting system is launched, click on the icon “Login” which is available under ‘Shareholders’ section. 3. A new screen will open. You will have to enter your User ID, your Password and a Verifi cation Code as shown on the screen. Alternatively, if you are registered for NSDL eservices i.e., IDEAS, you can log-in at https://eservices.nsdl.com/ with your existing IDEAS login. Once you log-in to NSDL eservices after using your log-in credentials, click on e-Voting and you can proceed to Step 2 i.e. Cast your vote electronically. 4. Your User ID details are given below : Manner of holding shares i.e. Demat (NSDL or Your User ID is: CDSL) or Physical a) For Members who hold shares in demat ac- 8 Character DP ID followed by 8 Digit Client ID count with NSDL. For example if your DP ID is IN300*** and Client ID is 12****** then your user ID is IN300***12******. b) For Members who hold shares in demat ac- 16 Digit Benefi ciary ID count with CDSL. For example if your Benefi ciary ID is 12************** then your user ID is 12************** c) For Members holding shares in Physical Form. EVEN Number followed by Folio Number registered with the company For example if folio number is 001*** and EVEN is 101456 then user ID is 101456001***

5. Your password details are given below: a) If you are already registered for e-Voting, then you can use your existing password to login and cast your vote. b) If you are using NSDL e-Voting system for the ﬁ rst time, you will need to retrieve the ‘initial password’ which was communicated to you. Once you retrieve your ‘initial password’, you need to enter the ‘initial password’ and the system will force you to change your password.

13 c) How to retrieve your ‘initial password’? (i) If your email ID is registered in your demat account or with the company, your ‘initial password’ is communicated to you on your email ID. Trace the email sent to you from NSDL from your mailbox. Open the email and open the attachment i.e. a .pdf fi le. Open the .pdf fi le. The password to open the .pdf fi le is your 8 digit client ID for NSDL account, last 8 digits of client ID for CDSL account or folio number for shares held in physical form. The .pdf fi le contains your ‘User ID’ and your ‘initial password’. (ii) If your email ID is not registered, your ‘initial password’ is communicated to you on your postal address.

6. If you are unable to retrieve or have not received the “ Initial password” or have forgotten your password: Click on “Forgot User Details / Password?”(If you are holding shares in your demat account with NSDL or CDSL) option available on www.evoting.nsdl.com. Physical User Reset Password?” (If you are holding shares in physical mode) option available on www.evoting.nsdl.com. If you are still unable to get the password by aforesaid two options, you can send a request at [email protected] mentioning your demat account number / folio number, your PAN,your name and your registered address. a) Members can also use the OTP (One Time Password) based login for casting the votes on the e-Voting system of NSDL. 7. After entering your password, tick on Agree to “Terms and Conditions” by selecting on the check box. 8. Now, you will have to click on “Login” button. 9. After you click on the “Login” button, Home page of e-Voting will open.

Details on Step 2 is given below:

How to cast your vote electronically on NSDL e-Voting system? 1. After successful login at Step 1, you will be able to see the Home page of e-Voting. Click on e-Voting. Then, click on Active Voting Cycles. 2. After click on Active Voting Cycles, you will be able to see all the companies “EVEN” in which you are holding shares and whose voting cycle is in active status. 3. Select “EVEN” of company for which you wish to cast your vote. 4. Now you are ready for e-Voting as the Voting page opens. 5. Cast your vote by selecting appropriate options i.e. assent or dissent, verify / modify the number of shares for which you wish to cast your vote and click on “Submit” and also “Confi rm” when prompted. 6. Upon confi rmation, the message “Vote cast successfully” will be displayed. 7. You can also take the printout of the votes cast by you by clicking on the print option on the confi rmation page. 8. Once you confi rm your vote on the resolution, you will not be allowed to modify your vote.

General Guidelines for shareholders 1 Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/JPG Format) of the relevant Board Resolution/ Authority letter etc. with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer by e-mail to [email protected] with a copy marked to [email protected]. 2. It is strongly recommended not to share your password with any other person and take utmost care to keep your password conﬁ dential. Login to the e-voting website will be disabled upon ﬁ ve unsuccessful attempts to key in the correct password. In such an event, you will need to go through the “Forgot User Details/Password?” or “Physical User Reset Password?” option available on www.evoting.nsdl.com to reset the password. 3. In case of any queries, you may refer the Frequently Asked Questions (FAQs) for Shareholders and e-voting user manual for Shareholders available at the download section of www.evoting.nsdl.com or call on toll free no.: 1800-222-990 or send a request at [email protected].

14 

THE LAKSHMI VILAS BANK LIMITED CIN L65110TN1926PLC001377 Registered Offi ce: Salem Road, Kathaparai, Karur - 639 006. Corporate Offi ce: “LVB House”, No. 4, Sardar Patel Road, Guindy, Chennai - 600 032. Website: www.lvbank.com, Tel No.: 044-22205306, Email: [email protected] Form No. MGT-11 PROXY FORM (Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014, as amended) CIN L65110TN1926PLC001377 Name of the Company The Lakshmi Vilas Bank Limited Registered Offi ce Salem Road, Kathaparai, Karur – 639 006

Name of the member(s) Registered Address Email id Folio No. / DP id and Client id I / We, being the member(s) of M/s. The Lakshmi Vilas Bank Limited, hereby appoint

1 Name of the member(s) Address E-mail Id Signature Failing him / her 2 Name of the member(s) Address E-mail Id Signature Failing him / her 3 Name of the member(s) Address E-mail Id Signature as my / our proxy to attend and vote (on poll) for me / us and on my/our behalf at the 92nd Annual General Meeting of the bank, to be held on 27th September, 2019 at 10.00 A.M. at the Registered Ofﬁ ce, Salem Road, Kathaparai, Karur- 639 006 and at any adjournment thereof in respect of such resolutions as indicated below. Item Description of the Resolution No. 1. Adoption of audited ﬁ nancial statements of the bank for the year ended 31st March 2019 and the Report of the Directors’ and the Auditors’ thereon. 2. Appointment of Director in place of Shri G Sudhakara Gupta who retires by rotation and being eligible, offers himself for re-appointment. 3. Appointment of Statutory Auditors. 4. Appointment of Branch Auditors. 5. Appointment of Shri N Saiprasad as Director of the Bank, liable to retire by rotation. 6. Appointment of Smt. Supriya Prakash Sen as an Independent Director of the Bank. 7. Increasing the Authorized Share Capital of the Bank and amendment to the Clause 6 (Capital Clause) of the Memorandum of Association. 8. Raising of capital through QIP, GDR, ADR etc. 9. Approval for borrowing / raising funds in Indian / foreign currency by issue of debt securities to eligible investors on private placement basis.

Signed this……………………………………………… day of …………………………………….. 2019.

Signature of Shareholder: ………………………………………...... …………… Afﬁ x ` 1/- Revenue Signature of Proxy holder(s): ……………………………...... …………………. Stamp

Note : This form of proxy in order to be effective should be duly completed and deposited at the Registered Ofﬁ ce of the Bank, not less than 48 hours before the commencement of the meeting  ROUTE MAP TO THE VENUE OF THE AGM

N National Highways (NH) (NH)

K o v a i

R Karur Bus stand o a d

J a w a PasubathiswararSri Kalyana h PasupatheeswararTemple Lakshmi Vilas Bank a Temple Registered Office r

Govt. Hospital Vengamedu B a z z Church a r

Vengamedu

Railway station

The Lakshmi Vilas Bank Limited CIN : L65110TN1926PLC001377 Corporate Ofﬁce: LVB House, No.4, Sardar Patel Road, Guindy, Chennai – 600 032. Registered Ofﬁce: Salem Road, Kathaparai, Karur – 639 006. E-Mail: [email protected] | Website: www.lvbank.com | Phone: 04324-258501 | Fax No.04324-223607

ATTENDANCE SLIP

NINETY SECOND ANNUAL GENERAL MEETING

Member(s) Name & Address:

No. of Shares Held :

I/We hereby record my/our presence at the 92nd Annual General Meeting of the Bank held on 27th day of September, 2019 at 10.00 a.m at the Registered ofﬁce of the Bank at Salem Road, Kathaparai, Karur- 639 006.

Member’s Folio/ Member’s / Proxy’s Name Member’s / Proxy’s DP ID-Client ID No. in Block Letters Signature Note: 1) Shareholder/Proxy holder is requested to produce the Attendance Slip duly signed at the entrance of the meeting hall. 2) Right of admission reserved only for the Shareholders / Proxy holders to attend the meeting.

92nd Annual General Meeting to be held on 27.09.2019 Electronic Voting Particulars

EVEN (Remote E-voting Event Number) User Id Password / PIN

Please read the e-voting instructions carefully before casting your vote

ANNUAL REPORT 2018 - 2019

BOARD OF DIRECTORS Shri / Smt. B.K.Manjunath - Non-Executive Chairman Parthasarathi Mukherjee - Managing Director & CEO (Till 31.08.2019) Y.N.Lakshminarayana Murthy Anuradha Pradeep G.Sudhakara Gupta H.S.Upendra Kamath N.Saiprasad (From 30.03.2019) STATUTORY AUDITOR Supriya Prakash Sen (From 14.06.2019) M/s.P.Chandrasekar LLP Suvendu Pati – RBI Nominee Chartered Accountants Rajnish Kumar – RBI Nominee Bengaluru (Firm’s Registration No.000580S/S200066)

PRESIDENTS SECRETARIAL AUDITOR Sundar S (Chief Financial Ofﬁ cer) Shri K.Muthusamy, Narayanan P P (Chief Operataing Ofﬁ cer) Practicing Company Secretary Coimbatore SENIOR VICE PRESIDENTS (M.No.F 5865; CP:3176) Gurumurthy R K REGISTERED OFFICE Peeush Jain Salem Road, Kathaparai, Padmanabhan Premkumar Karur-639 006, Tamilnadu Sudhir Kaushik Phone : 04324-258501 Manmadha Rao Boyina Website : www.lvbank.com Vasant Shukla E-Mail : [email protected] Nachiappan N CIN L65110TN1926PLC001377 Ravindra Kumar G Manikandan M CORPORATE OFFICE Neena Anand “LVB HOUSE”, No.4, Sardar Patel Road, Srinath M Guindy, Chennai - 600 032 Sanjay Kumar Rai Tamilnadu Apurv Gupta Phone : 044 22205222

REGISTRAR AND SHARE TRANSFER AGENT COMPANY SECRETARY M/s. Integrated Registry Management Services N.Ramanathan Private Limited II Floor, “Kences Towers”, No.1, Ramakrishna Street, North Usman Road, T.Nagar, Chennai - 600 017. Phone : 044-28140801/2/3 Fax: 28142479 Email : [email protected]

1 ANNUAL REPORT 2018 - 2019

CONTENTS Page No.

Report of Directors 3

Report of Auditors 18

Balance Sheet 24

Proﬁ t & Loss Account 25

Cash Flow Statement 26

Schedules 27

BASEL III - Pillar 3 Disclosures 63

Certiﬁ cate on Corporate Governance and ESOS 83

A Decade of Progress 136

2 ANNUAL REPORT 2018 - 2019

DIRECTORS’ 92nd ANNUAL REPORT To THE MEMBERS

The Directors of your Bank have great pleasure in presenting this 92nd Annual Report on the business and operations of your Bank together with the Audited Accounts for the year ended 31st March, 2019 (FY 2018-19).

1. FINANCIAL PERFORMANCE The main points of the ﬁnancial performance of your Bank for the year ended 31st March, 2019 are as under:

Particulars For the year ended (` in crores) 31st March 2019 31st March 2018 Deposits 29,279.44 33,309.48 Advances (net) 20,103.26 25,768.20 Investments (net) 8,430.17 10,767.75 Total Income 3,090.21 3,388.43 Operating Proﬁt (-) 11.97 355.38 Provisions & Contingencies 882.13 940.24 Net proﬁt (-) 894.10 (-) 584.86

Your Bank registered a total business of ` 51,235.40 crores in FY 2018-19 as against ` 60,314.02 crores in FY 2017-18, a decrease of 15.05%. From the beginning of the year, the Bank had taken a conscious decision to reduce dependence on bulk-sized term deposits. As a result, such deposits in the Bank fell from ` 11,027.92 crores to ` 3,605.72 crores. However, this fall was partially compensated by growth in low-cost CASA balances which grew by ` 499.73 crores during the year. Total deposits fell by 12.10%, from ` 33,309.48 crores as at 31st March 2018 to ` 29,279.44 crores as at 31st March 2019. CASA represented 25.67% of total deposits. In the absence of adequate capital, the Bank was focussed on capital optimisation and conservation. In the circumstances, the Bank chose to regulate lending and total advances (net) reduced by 21.98%, from ` 25,768.20 crores to ` 20,103.26 crores in the same period. The total priority sector advances were ` 8,900.72 crores forming 35.85% of Adjusted Net Bank Credit (ANBC) against the regulatory prescription of 40% of ANBC for the FY 2018-19. The total agricultural advances stood at ` 3,418.15 crores forming 13.77% of ANBC against the regulatory prescription of 18.00% of ANBC. Of which, loans to Small and Marginal Farmers stood at ` 1,868.70 crores forming 7.53% of ANBC against the mandatory requirements of 8.00% of ANBC for the year 2018-19. Our Bank’s advances to micro enterprises under MSME were at 6.74% of ANBC amounting to ` 1,673.42 crores against the mandatory requirement of 7.50% of ANBC for the year 2018-19. The Bank’s advances to weaker sections were ` 2,092.65 crores forming 8.43% of ANBC against the mandatory requirement of 10.00% of ANBC for year 2018-19. The shortfall in achievement with the regulatory guidelines under priority sector, agricultural lending, micro enterprises and weaker section advances arose mainly due to reduction / repayment of advances exceeding the fresh disbursements. While the shortfall has to be met by contribution to RIDF, whenever called for, the Bank continues to put in efforts to increase the priority sector lending under all segments. The Bank’s exposures to sensitive sectors including real estate and the capital market, were maintained well within the regulatory limits as well as overall internal ceilings prescribed for such exposures. As at the end of the year under review, the total investments (net) of the Bank stood at ` 8,430.17 crores as against ` 10,767.75 crores as on 31st March 2018.

3 ANNUAL REPORT 2018 - 2019

Your Bank’s Treasury continues to focus on sound Asset-Liability Management and on servicing clients with appropriate treasury products and was managed reasonably well in a systematic way in a year when yields were constantly rising.

2. PROFIT / LOSS The Bank has posted an operating loss of ` 11.97 crores in FY 2018-19 against the operating proﬁt of ` 355.38 crores in the previous year FY 2017-18. The net loss for the year, after provisions and contingencies including tax expense, amounted to ` 894.10 crores as against a net loss of ` 584.86 crores recorded in 2017-18.

3. APPROPRIATIONS

For the year ended (` in crores) Particulars 31st March 2019 31st March 2018 Proﬁ t brought forward (-) 671.12 62.26 Transfer from Investment Reserve 0.00 0.00 Amount available for appropriation (-) 894.10 (-) 522.60 Transfer to Statutory Reserve 0.00 0.00 Capital Reserve 6.64 86.26 Other Reserve 0.00 0.00 Investment Reserve 0.00 0.00 Special Reserve u/s 36(i)(viii)of the IT Act, 1961 0.00 0.00 Proposed Dividend / Dividend paid 0.00 51.79 Corporate Dividend Tax 0.00 10.47 Balance of proﬁ t carried forward (-) 1565.28 (-) 671.12

4. DIVIDEND In view of the Net Loss for the FY 2018-19, your Board of Directors is unable to recommend any dividend for the year. Your Bank has a Board approved Dividend Distribution Policy which has been formulated in line with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended and extant RBI Circulars / Directives. The Dividend Distribution Policy is enclosed as Annexure I to the Directors’ Report. The Policy is also available in the Bank’s website at https://www.lvbank.com/Policies.aspx.

5. CAPITAL RAISING I. Qualified Institutions Placement (QIP): During the year 6,38,31,328 equity shares were allotted to Qualified Institutional Buyers (“QIB”) in line with Chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and Section 42 of the Companies Act, 2013 (including the rules made thereunder), as amended. The Bank’s QIP issue for the Qualified Institutional Buyers was opened on 07.03.2019 and closed on 15.03.2019. The Bank has allotted 6,38,31,328 equity shares (face value of ` 10 and premium of ` 62 per equity share) for an aggregate amount of ` 459.59 crores to eligible investors on 16.03.2019. As on March 31, 2019, the post-issue paid-up capital of your Bank stood at ` 319,90,32,300 comprising 31,99,03,230 equity shares of ` 10 each.

II. Preferential Allotment By way of an additional information, it is informed that your Bank had allotted 1,68,00,000 Equity Shares (face value of ` 10 and premium of ` 112 per equity share) for an aggregate amount of ` 188.16 crores on 04.07.2019 to M/s. Indiabulls Housing Finance Limited under Preferential issue as per Chapter V of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 with approval of the shareholders through an Extra-ordinary General Meeting held on 20th May 2019.

4 ANNUAL REPORT 2018 - 2019

Your Bank continues to explore various options for raising further capital and will keep the shareholders informed at the appropriate time through disclosures at the Stock Exchanges.

6. STATEMENT OF DEVIATION OR VARIATION During the year, the Bank had issued equity shares to Qualified Institutional Buyers (“QIB”) on Qualified Institutions Placement on 16.03.2019. The issue was done in order to enhance the Capital Adequacy Ratio in line with the RBI norms and the proceeds of the issue were used primarily to enhance the Bank’s Capital Adequacy Ratio and to increase our capacity to lend and for general corporate purposes subject to compliance of applicable laws. There was no variation prompting disclosure under Regulation 32 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, as amended. Further as stated above, after the close of the financial year, the Bank had issued shares through preferential issue as per Chapter V of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 for augmenting Tier I capital, subject to compliance with applicable laws and regulations. There was no variation prompting disclosure under Regulation 32 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, as amended.

7. EPS / BOOK VALUE Earnings per Share stood at ` (-)34.66 for the year ended 31st March, 2019 as compared to ` (-)28.29 as on 31st March, 2018. Book Value of the share, stood at ` 53.48 as on 31st March, 2019 as compared to ` 84.39 as on 31st March, 2018. The book value adjusted for DTA / intangible assets stood at ` 25.08 as on 31st March 2019 and ` 64.18 as on 31st March 2018.

8. NET OWNED FUNDS / CAPITAL ADEQUACY RATIO Net Owned Funds (NOF) of the Bank decreased from ` 2160.41 crores as at the end of FY 2018 to ` 1710.97 crores as at the end of FY 2019. The net owned funds adjusted for DTA / intangible assets was ` 802.28 crores at the end of FY 2019 as against ` 1,643.03 crores as at the end of FY 2018. The Capital Adequacy Ratio (CAR) as on 31st March 2019 as per BASEL III is 7.72%. The Tier-I and Tier-II components of Capital Adequacy Ratio were maintained at 5.72% and 2.00% respectively.

9. POSITION OF IND-AS IMPLEMENTATION The Reserve Bank of India (RBI) issued a circular in February 2016, requiring scheduled commercial banks to implement Indian Accounting Standards (Ind AS) from April 1, 2018. Thereafter, RBI, vide a press release dated April 5, 2018, deferred the implementation of Ind AS by one year. Subsequently, RBI through a notification dated March 22, 2019 has deferred the Ind AS implementation till further notice, as the legislative amendments recommended by the Reserve Bank towards implementation of Ind AS are still under consideration of the Government of India. In the meantime, RBI has advised the banks to continue submitting proforma Ind AS financial statements for every quarter, starting from quarter ended June 30, 2019 with date of transition as April 1, 2019. The Bank has engaged a consultant to guide the Bank in the preparation of the Proforma Ind AS financial statements and also constituted a Steering Committee and commenced the process of Ind AS implementation. Bank is also in the process of identifying a suitable IT Consultant to provide appropriate software solution for reporting under Ind AS. The Board of Directors and the Audit Committee of the Board have been reviewing the progress regularly. The Bank has been regularly submitting proforma Ind AS statements on quarterly basis to RBI.

10. DIVERGENCE IN ASSET CLASSIFICATION AND PROVISIONING FOR NPAs As per RBI circular no.DBR.BP.BC.No.32/21.04.018/2018-19 dated April 1, 2019, Banks are required to disclose the divergence in asset classification and provisioning consequent to RBI’s annual supervisory process in their notes to accounts wherever either a) the additional provisioning requirements assessed by RBI exceeds 10 percent of the reported profit before provisions and contingencies for the reference period and b) the additional gross NPAs identified by RBI exceeds 15% of the published incremental Gross NPAs for the reference period. Accordingly the Bank has disclosed the divergence in Asset Classification and Provisioning for NPAs in compliance to Risk Assessment Report (RAR) of RBI for the financial year 2017-18 in the Notes to the Audited Financial Statements of the Bank and the same was also filed with the Stock Exchanges.

5 ANNUAL REPORT 2018 - 2019

11. NON-PERFORMING ASSETS (NPA) During the FY 18-19 the asset quality deteriorated in banking industry in general and in your bank, many accounts have slipped to NPA from different segments including Corporate, MSME & Retail. The total slippage during the FY 18-19 was to the tune of ` 1,412 crores. The Gross NPA as on 31st March 2019 stood at ` 3,358.99 crores while the Net NPA was ` 1,506.30 crores against which a provision of ` 1,785.27 crores has been made. In percentage terms, the GNPA was 15.30%, Net NPA 7.49% and Provision Coverage Ratio was 62.08%. With the concerted effort of the recovery teams as well as the branches, the Bank could recover ` 747 crores from the NPA Accounts. Despite the good performance under recovery, the huge slippage of accounts to NPA overshadowed the recovery performance. It is pertinent to mention here that, under the NPA Portfolio, majority of the amount is in corporate segment & again some of the accounts from corporate segment are under reference to NCLT. Hence, recovery was difficult due to moratorium in the accounts. With dedicated recovery team at Corporate Office and Regional Offices, the Bank is making untiring efforts for improved recovery performance during the FY 19-20.

12. BRANCH AND ATM NETWORK The Bank’s network spread as on 31st March 2019 stood at 569 Branches with 561 General Banking Branches, 7 Commercial Banking Branches, 1 Satellite Branch and 5 extension counters with its presence spread across 16 states and 3 Union territories. The Bank has added 28 new ATMs during the FY 2018-19 and the ATM network stood at 1048 which includes 600 Offsite ATMs. No branch expansion was considered for the FY 2018-19.

13. FINANCIAL INCLUSION Financial Inclusion is aimed at providing banking and financial services to all people in a fair, transparent and equitable manner at affordable cost. In other words, financial inclusion is delivery of banking services at an affordable cost to vast sections of disadvantaged and low-income groups. Inclusive growth is possible only through proper mechanism which channelizes all the resources from top to bottom. Financial inclusion is an innovative concept which uses alternative techniques to promote banking habits among people from rural and unorganized sectors. Lakshmi Vilas Bank is implementing financial inclusion under Business Correspondent (BC) channel through M/s. Integra Microsystems Private Limited., who is our technology service provider (TSP) & Corporate Business Correspondent (CBC) covering 134 villages and 230 wards (364 outlets) linked to 142 Branches with 146 BC Agents through Micro ATMs, which are enabled with AEPS (Aadhaar Enabled Payment System) and interoperable facility can offer any (bank) customers both onus/off-us transactions like deposits, withdrawals, Fund Transfer, Balance enquiry & Mini Statement transactions. The Bank has opened 1,80,657 Basic Savings Bank Deposit Accounts (BSBDA) / Pradhan Mantri Jan Dhan Yojana Accounts (PMJDY) as on March 31, 2019.

14. INTERNATIONAL BUSINESS During financial year 2018-19, the Rupee depreciated by more than 6% against the US Dollar, when compared to 0.5% depreciation in the previous fiscal year. The main reasons for this move in the Rupee were: 1) rising crude oil prices; 2) rising trade deficit expectations and 3) selloff in the broader emerging markets on account of quantitative tightening undertaken by the US FED and other central banks. The Rupee was one of the poorest performers as compared to its Asian peers last financial year. RBI foreign exchange reserves dropped from USD 426 Billion to USD 412 Billion during the same period. The US Federal Reserve continued to remain on tightening path by increasing interest rates four times during the financial year as compared to three during the previous financial year. The Bank of England increased its interest rates once as the UK Government laboured to get the “Brexit deal” through. There was no change in rates by the European Central Bank. In the reporting financial year, the Bank has made a foreign exchange turnover of ` 7,275.06 crores and is geared for further higher growth. The export credit stood at `190 crores and outstanding NRI deposit (including NRE INR and F.C. deposit) is ` 1,220 crores.

6 ANNUAL REPORT 2018 - 2019

15. LIABILITIES PRODUCTS Current Accounts and Savings Accounts (CASA) growth is among the most critical parameters on the liabilities side of the business for the bank. The CASA book grew by ` 500 crores, from ` 7,015 crores, to end at ` 7,515 crores as of March 31, 2019, registering a 7% growth. Non-bulk term deposits grew robustly by ` 2,892 crores from ` 15,267 crores to end at ` 18,159 crores as of March 31, 2019, registering a growth of 18.95%. CASA and non-bulk term deposits considered together grew at 15.22%. CASA ratio as of March 31, 2019 was 25.67%, up from 21.06% as of March, 2018. Bulk deposits were kept below 15% of deposits as of March 31, 2019. New to bank Current and Savings account acquisition grew from ` 524 crores as of March, 2018, to ` 583 crores as of March, 2019, registering a growth of 11%. More importantly, the average ticket size per account increased from ` 22,374 to ` 32,794. Balances in LVB CROWN Services Savings Bank account, the ﬂagship proposition for high networth customers grew from ` 636 crores as of March, 2018 to ` 843 crores as of March, 2019, registering a strong 33% growth. Income from Point of Sale (POS) business almost doubled from ` 12.50 crores as of March, 2018 to ` 23.65 crores as of March, 2019. The number of transactions increased in branches from ` 5.16 crores to ` 5.34 crores during FY 18-19. As a consequence of the Bank’s efforts to move clients to digital channels, the share of transactions in these channels grew to 40% from 31%. Registrations and transactions grew substantially through internet banking by 72.26% and mobile banking by 235.52%.

Key initiatives during FY 18-19: • Savings Bank deposit interest rate calculation was changed effective July 2018, paying higher interest rate for incremental balances in SB accounts. • The Lakshmi Dynamic Current Account (LDCA) campaign was launched during May 2018, as the product was identiﬁed as a core CASA offering to be driven by all branches. This resulted in over 1,700 LDCA and linked SB accounts being opened with an overall CASA book of ` 157 crores as of March 2019. • LVB Rising Star Savings Account was launched for school students who are eligible for Government grants / Scholarship / Subsidies. • Lakshmi Corporate Salary Account variants- Premium and Crown were launched, and the regular variant revamped for Corporates and Government employees, bolstering our suite of salary account products. • LVB RERA Current Account, a combination of two escrow accounts and a Current Account was launched exclusively for the real estate segment, giving customers the convenience of RERA compliant banking. • Customer engagement was given a ﬁrm thrust with a complete revamp of LVB Rewardz program, a loyalty program for LVB CASA customers. • Tie-ups and campaigns were done through prominent e-commerce service providers to provide discounts to customers across shopping, travel, and dining. • Just A Dollar (JAD) Current Account was launched exclusively for importers and exporters, which helps bring down foreign exchange transaction costs for customers. • NACH sponsor bank services were launched. • Steps were taken to move ATM Operations to opex model in order to optimize costs.

16. ALIGNING TECHNOLOGY WITH BUSINESS OBJECTIVE To enhance customer service and to provide better digital banking experience, your bank has upgraded the Core Banking Solution (CBS) and Internet Banking application. The Bank has introduced AEPS (Aadhaar Enabled Payment System), which is widely being used for ﬁnancial inclusion. The Bank had also implemented various information security projects to protect customers against advanced cyber security threats.

Technology Award: Your bank is the winner for IDC Insights Awards 2018 under the category “Excellence in Omni-experience”.

7 ANNUAL REPORT 2018 - 2019

17. WEALTH MANAGEMENT / PARABANKING ACTIVITIES: Life Insurance Bank has entered into strategic alliance with three leading life insurance companies in the country, Max Life Insurance, Aditya Birla Sun Life Insurance and DHFL Pramerica Life Insurance Company Ltd to offer life insurance cover to the valued customers of the Bank. The products offered to our clients are more diversiﬁed and tailor made to meet their requirements. During the ﬁ nancial year 2018-19, the Bank has insured 10628 lives and grown by 17%. Further, the premium receipt has increased from ` 38.07 crores to ` 46.57 crores, registering Y-o-Y growth of 22%.

General Insurance The Bank has tied up with Future Generali General Insurance Company Ltd & HDFC Ergo General Insurance Company Ltd to offer non-life insurance products to various customer segments. During the year the Bank has booked general insurance premium of ` 18.72 crores and covered the assets of our customers.

Health Insurance Bank has tied up with Cigna TTK Standalone Health Insurance Company Ltd to offer Health Insurance Products to the customers; the Bank has booked health insurance premium of ` 6.92 crores during the year and enrolled 4611 customers, helping them to secure protection against medical emergencies.

FISDOM The Bank has tied up with Finwizard Technology Pvt Ltd (widely known as FISDOM) to offer mobile based Wealth management services to our Customers. • Fisdom enables end-to-end digital transactions for mutual funds. • Our customers can invest in equity, debt and liquid instruments through Fisdom, with access to almost all leading AMCs. • The Bank has acquired 13509 clients during FY 19 with fresh AUM of ` 47.75. crores. The total AUM as on 31st March 2019 is ` 72.67 crores. • Our active Monthly SIP book is ` 3.40 crores.

New Tie-ups: Under open architecture, the Bank has explored the relationship with HDFC Ergo General Insurance Company Ltd to offer general insurance (retail) products to our customers.

18. RISK The objective of risk management of the Bank is to achieve optimum return while operating within acceptable level of risk appetite. The Bank has an independent risk management function which is tasked with managing risk through policies and processes approved by the Board of Directors. These encompass identification, measurement and management or risks across the various businesses of the Bank. The risk management function in the Bank strives to scientifically study vulnerabilities of process across business portfolios through quantitative or qualitative examination of the embedded risks and controls. The function continues to focus on refining and improving its risk management systems through automation of processes and building and strengthening controls. The overall risk management function of the Bank is supervised by the Risk Management Committee of the Board of Directors. The Bank has formulated and adopted a robust risk management framework. The Bank has in place internal committees such as Credit Risk Management Committee (CRMC), Asset Liabilities Committee (ALCO), Operational Risk Management Committee (ORMC), Business Continuity Management Committee (BCMC), Information Systems and Steering Committee (ISSC). These internal committees meet frequently and discuss risk related issues arising from businesses and processes and have active participation from the Top Management of the Bank. The overall risk appetite and risk philosophy of the Bank is articulated by the Management to the Risk Management Committee of the Board and Board of Directors. The risk appetite framework provides guidance to the management on the permitted levels of exposure to various businesses and maps to the business strategy of the Bank. Further the Internal Capital Adequacy Assessment Process (ICAAP) of the Bank assesses all the significant risks associated with various businesses and projects the requirement of

8 ANNUAL REPORT 2018 - 2019

capital. The independent risk management structure within the Bank is responsible for managing the credit risk, market risk, liquidity risk, operational risk, other Pillar II risks like reputation risk and strategic risks and exercising oversight on risks associated with outsourcing. The Bank has in place well-defined policies appropriate for the various risks, viz. credit risk, market risk, operational risk, liquidity risk, counterparty risk, country risk, reputational risk, strategic risk and outsourcing risk. These are reviewed periodically in order to benefit from internal and external experience. IT and cyber risk has assumed significance in keeping with the rising risk in these areas and to keep pace with regulatory advisories. 19. INTERNAL CONTROLS The Bank has an independent Audit & Inspection Department, which subjects all the branches of the Bank besides the Treasury, Currency Chests, Service Branches, Regional Offices and every department of the Corporate Office, to regular inspection. With the launch of Commercial Banking Branches (CBB), which deals with post sanction credit administration functions like documentation, disbursement and monitoring of Corporate and MSME advances, at seven centres across the country, the CBBs are also subjected to regular annual inspection. The Bank also carries out regular IS audits covering application systems and processes in business units. Key areas including Treasury, centralized operations departments and a large number of branches are under Concurrent Audit. Concurrent Audit is carried out by qualified external auditors and meets requirements of Risk Based Supervision. In addition, the Bank also carries out thematic audits in selected businesses / products from time to time. The Audit Committee of the Board, constituted in line with RBI guidelines and as per the requirements of SEBI Regulations, reviews the adequacy of the audit and compliance functions, including the policies, procedures and techniques. The composition of Audit Committee of the Board is provided in Annexure-C to this report.

20. HUMAN RESOURCES The Staff strength of the Bank marginally decreased from 4623 as on 31.03.2018 to 4557 as on 31.03.2019. Additionally, Bank has also engaged 261 Sales Personnel to boost sales. The Bank’s focus on training the human resources on a continual basis gained momentum by conducting online e-learning duly leveraging technology. The Bank has trained considerable number of resources in offsite training programmes conducted by reputed institutions such as SIBTC, IIBF, IDRBT, IBA, CAFRAL & FIMMDA. Further, through “Mission Enlighten”, a strategic training collaboration with M/s. Manipal Global Academy of BFSI, the Bank is bridging skill gaps and developing the internal talent pool.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE BANK Disclosure under Section 186 of the Companies Act, 2013 is not applicable for the Bank, being a Banking Company.

22. DEPOSITS Being a banking company, the disclosure required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013 are not applicable to the Bank.

23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES There were no related party transactions during the year under review and Form AOC-2 is not applicable to the Bank. During the FY 2018-19, the Bank did not have any material Related Party Transaction. The Bank has an approved policy on Related Party Transactions, which has been disclosed on the website and can be viewed at https://www.lvbank.com/policies.aspx.

24. OUTLOOK 2019-20 The Indian economy retained its tag of the fastest growing major economy in the world in FY 2018-19 for a second year in a row as it continued its climb on an upward growth path. The economy registered a growth rate of 7% during the FY 2018-19 as per advance estimates of the Central Statistical Ofﬁce. The economy is projected to grow at the rate of 7.5% during 2019, expanding further to 7.7% during 2020 as per the International Monetary Fund (IMF) World Economic Outlook January update. The growth rates for the economy are pegged much higher than the global growth rates for the same years, at 3.5% and 3.6% for 2019 and 2020 respectively, thus placing the economy on a solid footing even amidst growing global uncertainties.

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Rising incomes are expected to enhance the need for banking services in rural areas and therefore drive the growth of the sector. What matters to most customers in 2019 is greater personalization, more automated services, and easier access to services. Institutions that can deliver all three will capture their share of the market. Key for success in banking business will be in recognizing that customers are less concerned with brand familiarity than getting the services they want. Providing customers those services is key to client retention.

The Banking sector: The Board for Financial Supervision (BFS), in its meeting held on February 26, 2019 reviewed the performance of banks under Prompt Corrective Action (PCA) and noted that the Government of India has infused fresh capital on February 21, 2019 into various banks including some of the banks currently under the PCA framework. Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY) increased to ` 926.78 billion (US$ 12.85 billion) were deposited and 336.6 million accounts were opened in India. In May 2018, the Government of India provided ` 6 trillion (US$ 93.1 billion) loans to 120 million beneﬁciaries under Mudra scheme. In May 2018, the total number of subscribers was 11 million, under Atal Pension Yojna.

25. CORPORATE GOVERNANCE Corporate Governance of the Bank continues to rest on the fundamental pillar of high ethical values, designed to enhance and protect the interests of all the stakeholders. The Bank has complied with the corporate governance provisions as speciﬁed in SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, as amended (“SEBI Listing Regulations”). All the Directors on the Board have executed deed of covenants and provided the declaration & undertaking individually in line with the recommendations of Dr. Ganguly Committee Report. Further pursuant to SEBI Listing Regulations, a Management Discussion and Analysis is presented in Annexure A and Report on Board Committees is furnished in Annexure B. Composition of the Board of Directors together with the attendance of Directors at various meetings of the Board, its Committees and Annual General Meeting and the number of directorships held by them along with the details of Audit Committee of the Board and Stakeholders Relationship Committee are furnished in Annexure C, including composition of the Audit Committee of the Board. General Shareholders’ information is furnished in Annexure D.

BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, the Board has carried out annual evaluation of its own performance (Board as a whole), all of its Directors, Committees of the Board, its Non-Executive Chairman and MD & CEO. The manner of evaluation conducted during the year under report is furnished as under: The performance evaluation of the Board as a whole and that of the individual Directors, Managing Director & CEO and of various committees were conducted based on the “Criteria for evaluation of Independent Directors and the Board” framed by the Nomination, Remuneration and Compensation Committee of the Board, SEBI Listing Regulations and Guidance Note on Board Evaluation issued by Securities and Exchange Board of India (SEBI). The Board had already taken note of the evaluation made by the Independent Directors on the Board at their meeting held on 27.03.2018. During the evaluation, the Independent Directors had noted that the performance of the Non-Executive Chairman of the Board, the Non-Independent Directors and the Board as a whole was found to be satisfactory and it was noted that the Directors do not indulge in Micro Management. With regard to the areas for improvement in the Bank, the Independent Directors had suggested various measures to the Board and Management for the betterment of the Bank such as, entire staff must be trained in basic risk issues, credit monitoring must improve substantially, Audit & Inspection department’s effectiveness must improve substantially, to strengthen customer selection process, etc. The Independent Directors had appreciated immensely the role of Shri B.K. Manjunath, Non-Executive Chairman of the Board and his efficacy in conducting the meetings and articulating the discussions and bringing consensus in all matters. His professional background was also found to be a beneficial factor in various board discussions, including the Audit Committee of the Board. Based on the inputs received from the evaluation conducted by the Independent Directors and also considering certain specific criteria depending on the role of the Director / Committee in the Bank and the criteria for evaluation framed by the Nomination, Remuneration and Compensation Committee of the Board, the subject of Board Evaluation consisted of the following: 1. Evaluation of Board as a whole. 2. Evaluation of Board Committees.

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3. Evaluation of Individual Directors of the Board. • Evaluation of Managing Director • Evaluation of Non-Independent Directors. • Evaluation of Independent Directors While evaluating the performance of the Board, Board Committees and Individual Directors, the Directors considered various parameters including those formulated by the Nomination, Remuneration and Compensation Committee of the Board and the Guidance Note on Board Evaluation prescribed by SEBI. Some of the factors considered included the composition and diversity of the Board, ensuring healthy Independent to Non-independent Directors ratio, manner of conduct of Board and Committee meetings, etc. Being governed by the Banking Regulation Act, 1949, SEBI Listing Regulations and Companies Act, 2013, the mandatory Committees of the Board have been entrusted with specific roles and responsibilities under the relevant regulatory provisions. Besides the mandatory Committees as prescribed by the regulators, the Board has separately constituted certain Committees with specific reasons. The evaluation of Board Committees were done taking into account their mandate, composition, frequency of their meetings, independence of the Committees from the board, contribution of the Committees to the decisions of the Board through recommendations and to the Management through decisions, etc. The Board also views the recommendations of the Committees, if any, seriously and takes it into consideration. Based on the evaluation, the performance of the Committees were found to be satisfactory. The Managing Director & CEO of the Bank was evaluated based on various criteria’s including the Business targets set and the Bank’s overall performance during the year, clearly translating the Board’s vision and strategy into feasible business or operational plans to achieve strategic success for the Bank, exercising good judgment in managing the financial affairs and budgets of the organization, managing and executing the Board approved business plans, operational plans, risk management, and financial affairs of the organization, efforts taken in raising capital of the Bank by interacting with various investors and creating an investor friendly environment etc. Considering the business, the members of the Board requested the Managing Director & CEO to ensure that the management be more proactive in improving the key business parameters, work towards achieving the business plan of the Bank and creating good quality and bankable asset portfolio. The Non-Executive Directors (both Independent and Non-Independent) of the Bank were evaluated based on various factors including their attendance, ability to understand duties, responsibilities, qualifications, disqualifications and liabilities as a Director, coordination and rapport with the fellow Board Members, approach towards conflicts resolution and their contribution in enhancing the Board’s overall effectiveness, integrity and maintaining of confidentiality, ability to raise appropriate issues at meetings and ask appropriate questions for clarity, taking advantage of opportunity to upgrade skills by attending professional development programmes, remaining abreast of various developments in the Indian banking arena and keeping up with the various modifications / re-enactments of statutory enactments applicable to the Bank like the Companies Act, SEBI Regulations and the Banking Regulation Act, 1949 etc. The Independent Directors of the Bank were also provided familiarization program about the bank and their ability to bring in an Independent judgment to the issues handled by the Board without getting influenced otherwise. The evaluation with respect to individual non-executive directors revolved around various factors as mentioned above and it was ensured that the Board members evaluated their fellow member Directors in the absence of the Director being evaluated.

26. NUMBER OF MEETINGS OF THE BOARD During the ﬁnancial year, the Board met 17 times. The Board meetings were held in accordance with the provisions of the Companies Act, 2013 as amended. The details of the meetings held are provided in the Corporate Governance Report that forms part of this Annual Report.

27. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL According to the Articles of Association of the Bank, the number of Directors of the Bank shall not be less than three and more than ﬁfteen. The process of due diligence is undertaken in compliance of Directives / Guidelines / Circulars issued by RBI from time to time in the matter of appointment / re-appointment of Director. The Non-Executive Chairman of the Bank and the Managing Director of the Bank are appointed with prior approval of the RBI. Based on the vacancies that may arise in the Board from time to time, the Board follows a due process of appointment of directors through prior due diligence in line with the regulatory advice given by RBI, SEBI and MCA by way of Circulars / Guidelines / Regulations / enactments. The Nomination, Remuneration and Compensation Committee of the Board has formulated criteria for evaluation for the appointment or re-appointment of directors including independent Directors.

11 ANNUAL REPORT 2018 - 2019

The Managing Director & CEO of the Bank is paid remuneration as approved by the RBI but is not paid any sitting fees. The Non- Executive Chairman of the Bank is paid honorarium as approved by the RBI along with sitting fees paid for attending Board / Board Committee meetings. Other than the Managing Director & CEO and Part-time Chairman, no other directors are paid any remuneration / honorarium apart from sitting fees for attending Board and Board Committee Meetings. The details of remuneration of the Managing Director & CEO and that of the sitting fees paid to the other directors are available elsewhere in the report. The Senior Management and the other KMPs of the Bank along with other employees are paid remuneration based on internal HR policies of the Bank. The Senior Management of the Bank along with the KMPs abide by the Code of Conduct prescribed by the Bank. The code of conduct has been disclosed at the Bank’s website and can be viewed at https://www.lvbank.com/code-of-conduct.aspx. The Managing Director & CEO, Chief Financial Ofﬁcer and Company Secretary are the Key Managerial Personnel (KMPs) of the Bank, as stipulated by the Companies Act, 2013. As on 31.03.2019, other than the Managing Director & CEO, there are no other whole time directors in the bank. In line with RBI circular DBR.No.BC.97/29.67.001/2014-15 dated June 1, 2015 on Guidelines on Compensation of Non-Executive Directors of Private Sector Banks, Board of Directors had formulated a Compensation Policy. The Compensation Policy for Payment of Remuneration to Directors has been made available in the website of the Bank and can be accessed at https://www.lvbank.com/ policies.aspx.

28. DECLARATION BY INDEPENDENT DIRECTORS The Bank has duly obtained necessary declarations from each independent director under Section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence as laid down in section 146(6) of the Companies Act 2013 and Regulation 16 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and the Bank has also obtained the ‘Fit and Proper’ declaration as prescribed by the Reserve Bank of India. It is conﬁ rmed that the independent directors have complied with the code for independent directors prescribed in Schedule IV to the Companies Act as amended.

29. CONFIRMATION ON INDEPENDENT DIRECTORS The Board confirms that, in its opinion, the Independent Directors fulfil the conditions specified in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended and are independent of the management.

30. FAMILIARISATION PROGRAMME Pursuant to the Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the Bank has to conduct a familiarization programme for newly inducted Independent Directors and the Bank has done accordingly. In compliance with Regulation 46 (2) (i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended the details of the familiarisation programme conducted are disclosed in the website of the Bank and can be viewed at https://www.lvbank.com/independent-directors-terms-condition.aspx.

31. BOARD OF DIRECTIOS & KEY MANAGERIAL PERSONNEL Resignations / Cessation of tenure of appointment • Shri N Malayalaramamirtham retired from the Board on 14.01.2019 as per Reserve Bank of India directive on Report of the consultative group of Directors of Banks / Financial Institutions (Dr. Ganguly Group) – Implementation of recommendations dated 09.09.2002 having attained 70 years of age. • Shri Hemant Kaul resigned from the Board on 27.03.2019 after serving on the Board for about 23 months. Shri Hemant Kaul vide letter dated 27.03.2019 and 02.04.2019 had provided the reason for resignation as “not being able to find adequate time to do full justice to the role as Director” and he had further confirmed that there are no other material reasons other than those provided in his letter. • Shri Kusuma R Muniraju retired from the Board on 19.06.2019 as per Reserve Bank of India directive on Report of the consultative group of Directors of Banks / Financial Institutions (Dr. Ganguly Group) – Implementation of recommendations dated 09.09.2002 having attained 70 years of age. Appointments • Shri H S Upendra Kamath was appointed as an Additional Director on 20.04.2018 pursuant to the provisions of Section 149 (4) and Section 161 of the Companies Act, 2013 and classifi ed as Non-Executive and Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 and

12 ANNUAL REPORT 2018 - 2019

representing Banking (Practical Experience) and Small Scale Industry (Special Knowledge) under majority sector as per Banking Regulation Act, 1949. Considering his vast expertise in the Banking industry, Shri H S Upendra Kamath was proposed and appointed in the last Annual General Meeting held on 08.08.2018 as an Independent Director

• Shri N Saiprasad was appointed as an Additional Director on 30.03.2019 pursuant to the provisions of Section 161 of the Companies Act, 2013 and classiﬁed as Non-Executive and Non-Independent Director in terms of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended and representing Business category under minority sector as per Banking Regulation Act, 1949.

• The tenure of appointment of Shri Rajnish Kumar was extended by RBI for a period of two years from May 17, 2019 to May 16, 2021 or till further orders, whichever is earlier.

• Smt. Supriya Prakash Sen was appointed as an Additional Director on 14.06.2019 pursuant to the provisions of Section 149 (4) and Section 161 of the Companies Act, 2013 and classiﬁ ed as Non-Executive and Independent Director in terms of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and representing Information Technology and Finance categories under majority sector as per Banking Regulation Act, 1949. Considering that her banking knowledge and IT and Financial expertise would be of immense beneﬁ t to the Bank, it has been felt desirable to avail the services of Smt. Supriya Prakash Sen as an Independent Director and the Board has proposed the same to the shareholders.

MD & CEO Shri Parthasarathi Mukherjee’s original term of appointment came to an end on 24.01.2019. He was reappointed as Managing Director & CEO of the Bank by RBI vide letter no. DBR.Appt.No.6122/08.44.001/2018-19 dated 23.01.2019 as per Section 35B of the Banking Regulation Act, 1949 for two years with effect from 25.01.2019 representing Banking Category under majority sector as per Banking Regulation Act, 1949.

Shri Parthasarathi Mukherjee submitted his resignation letter on 28.08.2019, owing to personal reasons. The letter was placed before the Board in the Meeting held on 28.08.2019 and the Board has accepted the same. Shri Parthasarathi Mukherjee will be relieved from his services at the closing hours on Saturday, 31.08.2019 as per his request.

Re-appointment of Director retiring by rotation: Shri G Sudhakara Gupta, Director, will be retiring by rotation at the ensuing 92nd Annual General Meeting and being eligible, offers himself for re-appointment.

Key Managerial Personnel During the ﬁ nancial year Shri S Sundar took charge as the Chief Financial Ofﬁ cer of the Bank with effect from 27.04.2018. Apart from the above, there were no changes in the Key Managerial Personnel during the year.

32. LIST OF CORE SKILLS / COMPETENCIES IDENTIFIED BY THE BOARD The Banking Regulation Act, 1949, prescribes that not less than ﬁfty-one percent of the total members of the Board of Directors of a banking company shall consist of persons who shall have special knowledge or practical experience in respect of one or more of the matters namely, Accountancy, Agriculture & rural economy, Banking, Co-operation, Economics, Finance, Law, Small-scale Industry, Information Technology, Payment & Settlement Systems, Human Resources, Risk Management and Business Management, any other matter the special knowledge of, and practical experience in, which would, in the opinion of the Reserve Bank of India, be useful to the Banking company. Being a Bank, the Board of Directors are bound by the said provisions with regard to the core skills / expertise / competencies.

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The details of the Board of Directors as on 31.03.2019 and further as on the date of this report with their core areas of expertise is given below: Sl. No. Name of the Director Areas of Expertise 1. Shri B.K. Manjunath, Chairman Accountancy 2. Shri Parthasarathi Mukherjee, MD & CEO* Banking 3. Shri Y N Lakshminarayana Murthy Agriculture & Rural Economy 4. Smt. Anuradha Pradeep Law 5. Shri G Sudhakara Gupta Business 6. Shri H S Upendra Kamath Banking (Practical Experience) and Small Scale Industry (Special Knowledge) 7. Shri N Saiprasad Business 8. Smt. Supriya Prakash Sen1 Information Technology and Finance 9. Shri Kusuma R Muniraju2 Law * Shri Parthasarathi Mukherjee - Detail as mentioned in paragraph 31 above. 1 Smt. Supriya Prakash Sen was appointed on 14.06.2019 2 Shri Kusuma R Muniraju retired from the Board with effect from 20.06.2019 pursuant to Reserve Bank of India directive on Report of the consultative group of Directors of Banks/Financial Institutions (Dr.Ganguly Group) – Implementation of recommendations dated 09.09.2002 as he had attained 70 years of age.

33. DIRECTORS’ RESPONSIBILITY STATEMENT PURSUANT TO SECTION 134(3) (c) OF COMPANIES ACT, 2013 The Board of Directors of your Bank confirms that in the preparation of the annual accounts for the year ended March 31, 2019: • The applicable accounting standards have been followed along with proper explanation relating to material departures, if any. • The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for that period. • The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. • The Directors had prepared the annual accounts on a going concern basis; • The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and • The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

34. SOCIAL INITIATIVES 2018-2019 Donation Your Bank as a responsible corporate citizen has been supporting various philanthropic activities by donating such initiatives to the tune of ` 168.51 Lakhs. Further, your bank has also taken several initiatives in the area of CSR.

Corporate Social Responsibility (CSR) In accordance with the directives of Government of India, Bank is required to spend 2% of the average net proﬁt of the last 3 Financial Years or any part thereof on CSR activities. The Bank has disclosed its CSR policy in the website and the same can be viewed at https://www.lvbank.com/policies.aspx. The Annual Report on the CSR activities undertaken during the year as per the format speciﬁed by the Ministry of Corporate Affairs is forming part of this Report and is annexed to this Report as Annexure-E.

14 ANNUAL REPORT 2018 - 2019

35. BUSINESS RESPONSIBILITY REPORT The Business Responsibility Report prepared in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended has been made available on the Bank’s website at https://www.lvbank.com/business-responsibility-report.aspx.

36. ANNUAL RETURN The extract of Annual Return in Form No. MGT 9 is annexed herewith as Annexure J. Pursuant to the provisions of Section 134(3) (a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, as amended, the Annual Return of the Bank as on March 31, 2019 will be made available on the website of the Bank and can be accessed at https://www.lvbank.com.

37. STATEMENT ON COMPLIANCE TO APPLICABLE SECRETARIAL STANDARDS The Bank is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

38. PARTICULARS OF EMPLOYEES The disclosures pursuant to the provisions (as amended) of Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the Disclosures pursuant to the provisions of Section 197 (12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure-F.

39. EMPLOYEES STOCK OPTION SCHEME In the year 2010, the shareholders of the Bank have approved the issue of shares through Stock Option Scheme (ESOS 2010). During FY 2018-2019, total of 78,149 options were exercised by the eligible employees. In the year 2017, the shareholders of the Bank have approved the issue of shares through Employees Stock Option Scheme 2017 (ESOS – 2017). The implementation of both the said Schemes is in accordance with the applicable SEBI Regulations. All the options granted so far have been under ESOS 2010 and no options have been granted under ESOS 2017 till date. There are no material changes made in the Schemes during the year and all the schemes are in compliance of Securities and Exchange Board of India (Share Based Employee Beneﬁts) Regulations, 2014. Statutory disclosures regarding ESOS have been furnished in Annexure G to the report and can be viewed at www.lvbank.com.

40. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The provisions of Section 134(1)(m) of the Companies Act, 2013 and the applicable rule under the Companies (Accounts) Rules, 2014 relating to conservation of energy and technology absorption do not apply to your Bank. The Bank has, however, used Information Technology extensively in its operations. The Bank continues to encourage the country’s exports and will endeavor to enlarge its export ﬁnancing.

41. DETAILS OF MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE BANK WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE BANK TO WHICH THE FINANCIAL STATEMENT RELATE AND THE DATE OF THE REPORT The Board at its meeting held on April 5, 2019 had approved the scheme of amalgamation of The Lakshmi Vilas Bank Limited (LVB) (“Transferor Company”) with Indiabulls Housing Finance Limited (IHFL) (“Transferee Company”). In furtherance to the same, based on the mutual discussion of the management of LVB and IHFL, respectively, the Board at its meeting held on May 3, 2019 had considered and approved amendments to effect merger of IHFL (“Transferor Company 1”) and its wholly owned subsidiary, Indiabulls Commercial Credit Ltd., (ICCL) (“Transferor Company 2”) into and with LVB (“Transferee Company”) under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 as amended, Companies (Compromises, Arrangements and Amalgamations) Rules 2016, and other rules and regulations framed thereunder. The Scheme is subject to the receipt of approval from the Reserve Bank of India, other Regulatory approvals and all other applicable compliances. Bank has already ﬁled applications with Reserve Bank

15 ANNUAL REPORT 2018 - 2019

of India and both the Stock Exchanges, which are under consideration by the respective Regulators. Further, on the joint application ﬁled by the said three entities with Competition Commission of India (CCI) on May 10, 2019, CCI has accorded its approval by Order under Section 31(1) of the Competition Act, 2002 dated June 20, 2019.

42. DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED, IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE BY REGULATORS OR COURTS OR TRIBUNALS During the year under review no Signiﬁcant Material Orders were passed by any regulators or courts or tribunals against the Bank other than those disclosed separately in the ﬁnancial statements, directors report and in the Corporate Governance Report.

43. OTHER PENALTIES IMPOSED BY REGULATORS • The Bank was imposed a penalty of ` 47,800/- on account of deficiency observed in Specified Bank Notes (SBN) currency remittances made to RBI by our Branches. • The Bank was imposed a penalty of ` 20,650/- on account of deficiency observed in functioning of Currency Chests like mutilated currencies observed in cash remittances to RBI etc.

44. NUMBER OF CASES FILED, IF ANY AND THEIR DISPOSAL UNDER THE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 In order to provide protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment and for matters connected therewith or incidental thereto, as sexual harassment results in violation of the fundamental rights of a woman to equality under Articles 14 and 15 of the Constitution of India and her right to life and to live with dignity under Article 21 of the Constitution and right to practice any profession or to carry on any occupation, which includes a right to a safe environment free from sexual harassment, a well-defined policy in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been adopted in the Bank. The complaints registered under the Act, on actions covered under the ambit of sexual harassment at work place are handled by a Committee represented by senior executives of the Bank of which two are women and an, external member, who is a woman advocate. Redressal of such complaints are dealt with in a prudent manner, giving equal opportunity to both the aggrieved and the accused for representation of the case and without affecting the dignity and self-esteem of the women employee (permanent, contractual, temporary, trainee). Number of complaints pending as on the beginning of the financial year - Nil Number of complaints filed during the financial year - Nil Number of complaints pending as on the end of the financial year – Nil

45. VIGIL MECHANISM Disclosure of information in the public interest by the employees of an organization is increasingly gaining acceptance by public bodies for ensuring better governance standards and probity in the conduct of affairs. Large scale corporate frauds had necessitated internationally, various legislative measures for safeguarding public interest through enactments. As a proactive measure for strengthening financial stability and with a view to enhance public confidence in the robustness of the financial sector, RBI has formulated a scheme called “Protected disclosures scheme for private sector and foreign banks”. In the above perspective, our Bank has formulated and implemented a “Whistle Blower Policy” which is available in your Bank’s Website at https://www.lvbank.com/policies.aspx and the policy is available in internal intranet also. During the year 2018-19, no personnel has been denied access to the Audit Committee of the Board.

46. CODE OF CONDUCT TO REGULATE, MONITOR AND REPORT TRADING BY INSIDERS IN SECURITIES OF THE LAKSHMI VILAS BANK LIMITED The Bank has formulated a Code of Conduct pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended, to regulate, monitor and ensure reporting of trading by the employees and other connected persons towards achieving compliance with the SEBI Regulations and is designed to maintain highest ethical standards of dealing in securities of the Bank by persons to whom it is applicable. The code of conduct and related policy are available in the Bank’s website and can be viewed at https://www.lvbank. com/insider-trading.aspx.

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47. AUDITORS Statutory Auditors: The Statutory audit of the Bank was carried out by M/s. P. Chandrasekar LLP, Chartered Accountants, Bangalore whose report is annexed and forms part of this report. The Statutory Central and Branch Auditors have audited all the branches and other ofﬁces of the Bank. The qualiﬁed opinion of the Statutory Auditors together with the basis and our response to the same are furnished hereunder:

Observation: Qualified Opinion During the previous financial year, the Bank had adjusted loans aggregating to ` 794 crores extended to RHC Holding Private Limited and Ranchem Private Limited against deposits of Religare Finvest Limited duly supported by Legal Opinion. The said adjustment has been contested by the Religare Finvest Limited and a suit has been filed against the Bank in May 2018 before the Honourable High Court of Delhi. The matter still remains sub-judice and hence we are unable to comment on the impact on the financial statements and legal / regulatory consequences. The audit opinion on the financial statements for the year ended 31st March 2018 was also qualified in respect of this matter.

Response: “In the matter of suit ﬁled against the bank by M/s Religare Finvest Ltd., for adjustment of their deposits to the dues of M/s.RHC Holding Pvt. Ltd & M/s.Ranchem Pvt Ltd., as reported in the earlier quarters / year, it is being defended appropriately by the Bank and the matter still remains sub-judice.”

Secretarial Auditor: Pursuant to the provisions of Companies Act 2013, the Bank has appointed Shri K. Muthusamy, Practicing Company Secretary, Coimbatore (CoP 3176) as the Secretarial Auditor for the FY 2018 -19. The Secretarial Audit Report dated 29.04.2019 is annexed to this report as Annexure-H. There are no qualiﬁcations, reservation or adverse remark or disclaimer in the report.

48. LISTING AGREEMENT WITH STOCK EXCHANGES The Equity Shares of the bank are listed with the National Stock Exchange of India Ltd, Mumbai and BSE Ltd, Mumbai to enhance the liquidity of your equity shares.

49. ACKNOWLEDGMENTS Your Directors would like to thank the shareholders and customers for their continued goodwill and support. The Board also gratefully acknowledges the guidance and co-operation received from the Reserve Bank of India and other regulatory and government authorities like SEBI, NSE, BSE, NSDL, CDSL and Department of Income Tax. Your Directors would also like to express their sincere appreciation of the contribution made by the management and staff including the Employees’ Union and Ofﬁcers’ Association for their support and look forward to a more evolved relationship, as steps are taken to re-orient the bank for the future.

For and on behalf of the Board of Directors

B.K. Manjunath Parthasarathi Mukherjee Chairman of the Bank Managing Director & CEO Place: Chennai Date: 28.08.2019

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INDEPENDENT AUDITOR’S REPORT

To The Members of The Lakshmi Vilas Bank Limited

Report on the Audit of the Financial Statements Opinion We have audited the accompanying financial statements of The Lakshmi Vilas Bank Limited ('the Bank'), which comprise the Balance Sheet as at 31 March 2019, the Profit and Loss Account, the Cash Flow Statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information. Incorporated in these financial statements are the returns for the year ended on that date of 19 branches/offices audited by us and 568 branches/ offices audited by statutory branch auditors. The branches audited by us and those audited by other auditors have been selected by the bank in accordance with the guidelines issued to the bank by the Reserve Bank of India.

Basis for Qualified Opinion We conducted our audit in accordance with Standards on Auditing ("SAs") specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the audit of the financial statements section of our report.. We are independent of the Bank in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements and that are relevant to our audit of the financial statements under the provisions of the Act and the rules there under, and we have fulfilled our other ethical responsibilities in accordance with this requirements and the code of ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion as under:

During the previous financial year, the Bank had adjusted loans aggregating to ` 794 crores extended to RHC Holding Private Limited and Ranchem Private Limited against deposits of Religare Finvest Limited duly supported by legal opinion. The said adjustment has been contested by the Religare Finvest Limited and a suit has been filed against the Bank in May 2018 before the Honourable High Court of Delhi. The matter still remains sub-judice, and hence we are unable to comment on the impact on the financial statements and legal/ regulatory consequences. The audit opinion on the financial statements for the year ended 31st March 2018 was also qualified in respect of this matter.

Qualified Opinion In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the basis for qualified opinion paragraph, the aforesaid financial statements give the information required by the Banking Regulations Act, 1949 as well as Companies Act, 2013 (the "Act") in the manner so required for banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, and its Losses and its cash flows for the year ended on that date.

Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sl No. Key Audit Matter Auditor's Response to Key Audit Matter 1 Recognition of Deferred tax assets on carry forward Principal Audit Procedures: of losses. • Considered the taxable profits of the bank and taxes paid Deferred tax assets on unabsorbed depreciation or carry in the past, obtained details of carry forward losses under forward of losses are to be recognized only when there income tax and details of estimates of taxable incomes for is a virtual certainty supported by convincing evidence future periods without considering further capital infusion, that sufficient future taxable income will be available of restructuring and without considering expected recoveries against which such deferred tax assets can be realised. from assets where resolution proceedings are underway. Determination of virtual certainty is a matter of judgement based on convincing evidence.

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Sl No. Key Audit Matter Auditor's Response to Key Audit Matter Refer Notes Sch.18 point no:4.9 -Accounting Standard • Tested the period over which the deferred tax assets on 22 to the Financial Statements. such unabsorbed losses would be recovered against future taxable income. • Tested the management`s underlying assumptions in estimating the future taxable incomes against which such unabsorbed losses would be recovered. 2 Adequacy of provisions in respect of Advances. Principal Audit Procedures: Advances are classified as performing and non- We assessed the Bank's system in place to identify and provide performing assets in accordance with the prudential for non-performing assets. norms issued by RBI. The identification of non- Our audit approach consisted testing of the design and operating performing assets and creation of provision on such effectiveness of the internal controls and substantive testing as advances involves key judgements relating to follows: performance of borrowers, determination of security value, manual interventions, management judgement, • Evaluated the design of internal controls relating to regulatory level, etc. identification and making provision for non-performing assets. Accordingly, our audit was focused on income recognition, asset classification and provisioning • Tested the relevant information technology systems used pertaining to advances due to the materiality of the in identification and making provision for such NPA as per balances and associated impairment provisions. the RBI Guidelines including involvement of manual process and manual controls. in relation to income recognition, asset classification and provisioning pertaining to advances. • Considered branch audit reports for identification and provisioning for non-performing assets • Test checked the identification and provisioning of non- performing assets in accordance with RBI Guidelines issued from time to time. • Ensured exceptions noticed during our audit procedures are duly corrected. 3 Information technology (IT) systems (Flex Cube - Principal Audit Procedures: Oracle based) used in financial reporting process. We conducted an assessment and identified key IT applications, The Bank's operational and financial processes are databases and operating systems that are relevant to our audit dependent on IT systems due to large volume of and have identified CBS and Treasury System primarily as transactions that are processed daily. relevant for financial reporting. Accordingly, our audit was focused on key IT systems Our audit approach consisted testing of the design and operating and controls due to the pervasive impact on the financial effectiveness of the internal controls and substantive testing as statements follows: • Obtained an understanding of the Bank's IT control environment, IT policies and key changes during the audit period. • Reviewed the design, implementation and operating effectiveness of the Bank's General IT controls over the key IT systems that are critical to financial reporting on test check basis as per the checklist provided by the ICAI in its latest guidance note on bank audit. • Tested key automated and manual business cycle controls and logic for system generated reports relevant to the audit on test check basis. 4 Valuation of Investments. Principal Audit Procedures: As per RBI guidelines Investments are classified into We conducted an assessment of the policies, controls , 'Held for Trading" (HFT) , Available for Sale(AFS) and classifications and valuations of investments. Held to Maturity (HTM) categories at the time of

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Sl No. Key Audit Matter Auditor's Response to Key Audit Matter purchase and HTM Investments are at amortised cost • Reviewed the appropriateness of the valuation, by test and AFS and HFT are at Mark to Market. checking on the pricing, volatility, discount factors. Accordingly, our audit was focused on the key audit • Reviewed if the RBI policies are followed matter , due to the management's judgement in • Reviewed if the financial statements disclosures reflect the determining the value based on the policy of the bank, Bank's exposure to investments in line with the RBI policies, impairment assessments and the impact in the financial and accounting standards. statements.

Information other than Financial statements and Auditor's Report thereon The Bank's Board of Directors are responsible for the other information. The other information comprise of the CSR Initiatives, Director's Report, Annexure to Director's Report, Shareholders information, Business Responsibility Report, Corporate Governance Report, Management Discussions and Analysis Report, List of Branches, Base III Disclosures, Decade Progress included in the Bank's Annual Report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and the Basel III disclosures, and accordingly, we will not express any form of assurance or conclusion thereon. In connection with our audit of the financial statement, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit otherwise appears to be materially misstated. If based on the work, we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in the regard.

Responsibilities of Management and Those charged with Governance for the Financial Statements The Bank's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India ('RBI') from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities ; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material mis-statement, whether due to fraud or error. In preparing the financial statements, the Board of directors is responsible for assessing the Bank's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so. The Board of Directors are also responsible for overseeing the Banks financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted with SA's will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements. • We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. • We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. • From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 and Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. As required by subsection (3) of Section 30 of the Banking Regulation Act, 1949, we report that: (a) we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit except for the matter described in the 'Basis for Qualified Opinion' paragraph and have found them to be satisfactory; (b) the transactions of the Bank, which have come to our notice, have been within the powers of the Bank; (c) Since the key operation of the Bank are automated with key applications integrated to the Core Banking System, the audit is carried out centrally as all the necessary records and data required for the purpose of our audit are available therein. However, during the course of our audit we have visited 19 branches and offices. The returns received from the offices and branches of the Bank have been found adequate for the purposes of our audit. Further, as required by Section 143(3) of the Act, we report that: (i) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit except for the matter described in the 'Basis for Qualified Opinion' paragraph; (ii) In our opinion, proper books of account as required by law have been kept by the Bank so for as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us; (iii) The reports on the accounts of the branches audited by branch auditors of the Bank under Section 143(8) of the Companies Act 2013 have been sent to us and have been properly dealt with by us in preparing this report; (iv) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;

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(v) Except for the possible effects of matter described in the 'Basis for Qualified Opinion' paragraph, in our opinion, the financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, to the extent they are not in consistent with the accounting policies prescribed by RBI; (vi) On the basis of written representations received from the directors as on 31st March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2019 from being appointed as a director in terms of Section 164(2) of the Act; (vii) With respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls, refer to our separate Report in "Annexure A" to this report and (viii) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: a. the Bank has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Schedule 18 - Note No.7 to the financial statements; b. the Bank does not have any long term contracts including derivative contracts - Refer Schedule 18 - Note No.3.3 to the financial statements; and c. there has been no delay in transferring amounts required to be transferred to the Invest or Education and Protection Fund by the Bank. d. The disclosures required on holdings as well as dealing in "Specified bank notes" during the period from 8th November 2016 to 30th December 2016 as envisaged in notification G.S.R. 308(E) dated 30th March 2017 issued by the Ministry of Corporate Affairs is not applicable to the Bank. e. With respect to the matter to be included in the Auditor's Report in accordance with the requirements of Section 197(16) of the Companies Act, 2013 as amended: In our opinion and to the best of our information and according to the explanations given to us, the entity being a banking company, Section 197 of the Act, related to the managerial remuneration is not applicable by virtue of Section 35B(2A) of the Banking Regulations Act, 1949.

For M/s. P.CHANDRASEKAR LLP Chartered Accountants (Firm Registration No. 000580S/S200066)

LAKSHMY CHANDRASEKARAN Place: Bangalore Partner Date : 28th May, 2019 Membership No. 028508

Annexure A to the independent auditor's report of even date on the financial statements of The Lakshmi Vilas Bank Limited Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 We have audited the internal financial controls over financial reporting of The Lakshmi Vilas Bank Limited ('the Bank') as at 31st March 2019 in conjunction with our audit of the financial statements of the Bank for the year ended on that date.

Management's Responsibility for Internal Financial Controls over Financial Reporting The Bank's Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ('the Guidance Note') issued by the Institute of Chartered Accountants of India (the ICAI')". These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Bank's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 ('the Act').

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Auditor's Responsibility Our responsibility is to express an opinion on the Bank's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ('the Guidance Note') issued by the ICAI and the Standards on Auditing ('the Standards'), prescribed under Section 143(10) of the Companies Act, 2013 to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material mis-statement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Bank's internal financial controls with reference to financial statements.

Meaning of Internal Financial Controls Over Financial Reporting A bank's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding there liability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A bank's internal financial control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the bank; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditure of the bank are being made only in accordance with authorizations of management and directors of the bank; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,use, or disposition of the bank's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management over ride of controls, material mis-statements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may be come inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion In our opinion, the Bank has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31st March 2019, based on the internal controls criteria established by the Bank considering the essential components of internal control stated in the Guidance Note issued by the ICAI. For M/s. P.CHANDRASEKAR LLP Chartered Accountants (Firm Registration No. 000580S/S200066) LAKSHMY CHANDRASEKARAN Place: Bangalore Partner Date : 28th May, 2019 Membership No. 028508

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BALANCE SHEET as on 31st March 2019 (` 000’s) As at As at Schedule 31-03-2019 31-03-2018

I. CAPITAL & LIABILITIES

a. Capital 1 319 90 32 255 99 38

b. Reserves & Surplus 2 1572 67 31 2071 67 45

c. Deposits 3 29279 44 08 33309 48 29

d. Borrowings 4 921 25 90 4012 78 03

e. Other Liabilities & Provisions 5 952 88 68 779 29 45

TOTAL 33046 16 29 40429 22 60

II. ASSETS

a. Cash & Balances with Reserve Bank of India 6 1654 07 21 1698 16 94

b. Balances with Banks and Money at call & Short Notice 7 515 04 07 316 79 42

c. Investments 8 8430 16 53 10767 74 83

d. Advances 9 20103 25 93 25768 20 17

e. Fixed Assets 10 469 95 43 402 45 35

f. Other Assets 11 1873 67 12 1475 85 89

TOTAL 33046 16 29 40429 22 60

Contingent Liabilities 12 10431 86 20 4872 30 39

Bills for collection 976 92 25 1277 33 20

Significant Accounting Policies 17

Notes on Accounts 18

Schedules 1 to 12 and 17 to 18 form part of this Balance Sheet.

As per our Report of even date attached

For M/s. P.CHANDRASEKAR LLP B.K. MANJUNATH Y.N. LAKSHMINARAYANA MURTHY Chartered Accountants Chairman KUSUMA R MUNIRAJU (FRN - 000580S/S200066) ANURADHA PRADEEP PARTHASARATHI MUKHERJEE Managing Director & CEO G.SUDHAKARA GUPTA LAKSHMY CHANDRASEKARAN H.S.UPENDRA KAMATH Partner Membership No. 028508 S. SUNDAR N.SAIPRASAD Chief Financial Officer SUVENDU PATI

Bangalore N. RAMANATHAN RAJNISH KUMAR 28th May, 2019 Company Secretary Directors

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PROFIT AND LOSS ACCOUNT for the year ended 31st March 2019

(` 000’s) Year ended Year ended Schedule 31-03-2019 31-03-2018

I. INCOME a. Interest Earned 13 2839 89 39 3041 62 17 b. Other Income 14 250 31 79 346 80 78 TOTAL 3090 21 18 3388 42 95

II. EXPENDITURE a. Interest Expended 15 2279 75 13 2251 02 10 b. Operating Expenses 16 822 42 66 782 02 97 c. Provisions & Contingencies 882 13 10 940 24 49 TOTAL 3984 30 89 3973 29 56

III. NET PROFIT FOR THE YEAR -894 09 71 -584 86 61 Profit brought forward -671 12 47 62 26 43 TOTAL -1565 22 18 -522 60 18

IV. APPROPRIATIONS a. Transfer to Statutory Reserve 0 0 b. Transfer to Capital Reserve 6 64 86 25 86 c. Transfer to Other Reserves 0 0 d. Investment Reserve 0 0 e. Transfer to Special Reserve u/s 36(1)(viii) of the IT Act, 1961 0 0 f. Dividend Paid for FY 16-17 0 51 78 78 g. Tax on Dividend 0 10 47 65 h. Balance carried over to Balance Sheet -1565 28 82 -671 12 47 TOTAL -1565 22 18 -522 60 18 Earnings Per Share - Basic (`) -34.66 -28.29 Earnings Per Share - Diluted (`) -34.59 -28.11

Schedules 13 to 16 and 17 to 18 form part of this Profit & Loss Account. As per our Report of even date attached

Bangalore N. RAMANATHAN RAJNISH KUMAR 28th May, 2019 Company Secretary Directors

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CASH FLOW STATEMENT for the year ended 31st March 2019

(` in 000’s) 31-03-2019 31-03-2018 CASH FLOW FROM OPERATING ACTIVITIES: Net Profit as per Profit & Loss Account -8940971 -5848661 ADJUSTMENTS FOR: Provisions & Contingencies 8821310 9402449 Depreciation on Fixed Assets 672093 588416 Loss on sale of assets -8254 1835 Income Tax / T D S paid -100000 -680000 Net cash flow before changes in Working Capital 444178 3464039 CHANGES IN WORKING CAPITAL : LIABILITIES : Increase/Decrease in Deposits -40300421 27561295 Refinances -30915213 23391482 Other Liabilities -5737625 -8420459 -76953258 42532318 ASSETS : Increase/Decrease in Investments -21550401 21650730 Advances -56649424 20392904 Other Assets 3404188 5267756 74795636 -47311390 Net Cash Flow from operating activities -1713444 -1315032 CASH FLOW FROM INVESTING ACTIVITIES : Purchase of Fixed Assets -1187063 -1035216 Sale of Fixed Assets 14529 11620 Net Cash Flow from Investing activities -1172534 -1023596 CASH FLOW FROM FINANCING ACTIVITIES: Share issue including share premium net of forfeited shares 4423738 7863218 Proceeds received from Tier II Bonds 0 0 Repayment of Tier II Bonds 0 -995000 Dividends paid 3732 -618719 Net Cash Flow from financing activities 4427470 6249499 Cash flow for the year 1541492 3910871 Cash & Cash equivalents at the beginning of the year 20149636 16238766 Cash & Cash equivalents at the year end (refer Schedule 6 &7) 21691128 20149636

As per our Report of even date attached

Bangalore N. RAMANATHAN RAJNISH KUMAR 28th May, 2019 Company Secretary Directors

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(` 000’s) As at As at 31-03-2019 31-03-2018 SCHEDULE 1 - CAPITAL AUTHORISED CAPITAL (50,00,00,000 equity shares of ` 10/- each) 500 00 00 500 00 00 ISSUED CAPITAL (32,19,21,756 equity shares of `10/- each). (Previous year 25,80,12,279 equity of ` 10/- each) of which 6,38,31,328 shares issued through QIP and 78,149 shares issued under “LVB ESOS-2010”. 321 92 18 258 01 23 Subscribed, Called-up and Paid Up Capital i) 31,99,03,230 equity shares of ` 10/- each. 319 90 32 255 99 38 (Previous year 25,59,93,753 shares of ` 10/- each) (6,38,31,328 shares issued under QIP and 78,149 shares issued under “LVB ESOS-2010”.) ii) 1,26,42,131 Bonus Shares allotted (Previous year 1,26,42,131 shares) iii) Shares kept in abeyance 20,18,526, inclusive of Forfeited & lapsed shares (Previous year 20,18,526 shares) iv) Shares Forfeited and lapsed 23,658 (Previous year 23,658 shares) 319 90 32 255 99 38 SCHEULE 2 - RESERVES & SURPLUS I. STATUTORY RESERVE Opening Balance 481 40 46 481 40 46 Additions during the year 0 481 40 46 0 481 40 46 II. CAPITAL RESERVE Opening Balance 226 52 80 140 26 94 Additions during the year 6 64 226 59 44 86 25 86 226 52 80 III. SHARE PREMIUM Opening Balance 1529 75 61 807 98 14 Additions during the year 396 58 18 721 77 47 1926 33 79 1529 75 61 Deductions during the year 19 16 08 1907 17 71 0 1529 75 61 IV. REVENUE & OTHER RESERVES Opening Balance 269 20 31 216 52 72 Additions during the year 2 27 74 52 67 59 271 48 05 269 20 31 Deductions during the year 0 271 48 05 0 269 20 31 V. EMPLOYEE STOCK OPTION OUTSTANDING Opening Balance 6 20 32 4 50 49 Additions during the year 1 17 20 3 79 85 7 37 52 8 30 34 Deductions during the year 12 86 2 10 02 Less: Transferred to General Reserve 7 24 66 0 6 20 32 VI. SPECIAL RESERVE U/S 36(1)(VIII) OF IT ACT, 1961 Opening Balance 62 45 00 62 45 00 Additions during the year 0 62 45 00 0 62 45 00 VII. REVALUATION RESERVE Opening Balance 167 25 42 169 49 32 Additions during the year 16 63 13 0 183 88 55 169 49 32 Depreciation on Revalued Asset 2 27 74 181 60 81 2 23 90 167 25 42

VIII. BALANCE IN PROFIT & LOSS ACCOUNT -1565 28 82 -671 12 47 TOTAL 1572 67 31 2071 67 45

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(` 000’s) As at As at 31-03-2019 31-03-2018

SCHEDULE 3 - DEPOSITS A. I. DEMAND DEPOSITS 1. From Banks 4 47 18 1 09 82 2. From Others 1962 50 14 1966 97 32 2090 16 56 2091 26 38 II. SAVINGS BANK DEPOSITS 5552 25 79 4924 86 79 III. TERM DEPOSITS 1. From Banks 108 54 22 2378 89 03 2. From Others 21651 66 75 21760 20 97 23914 46 09 26293 35 12 29279 44 08 33309 48 29 B. (I) DEPOSITS OF BRANCHES IN INDIA 29279 44 08 33309 48 29 (II) DEPOSITS OF BRANCHES OUTSIDE INDIA NIL NIL TOTAL 29279 44 08 33309 48 29

SCHEDULE 4 - BORROWINGS I. BORROWINGS IN INDIA 1. Reserve Bank of India 0 2070 00 00 2. Other Banks 52 66 40 275 00 00 3. Other Institutions & Agencies* 868 59 50 921 25 90 1667 78 03 4012 78 03 II. BORROWINGS OUTSIDE INDIA 0 0 * Includes unsecured Tier II bonds of ` 368.70 Crs (PY ` 368.70 Crs) 921 25 90 4012 78 03

SECURED BORROWINGS INCLUDED IN I & II ABOVE 0 0

SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS I. Bills payable 64 99 45 84 48 76 II. Inter-office adjustments (net) 0 11 51 70 III. Interest accrued 229 18 76 225 70 07 IV. (I) Others - (including Provisions) 560 39 47 359 27 92 (ii) Contingent Provisions against Standard Assets 98 31 00 98 31 00 952 88 68 779 29 45

SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA Cash in Hand (including foreign Currency Notes) 333 37 55 344 15 68 Balances with Reserve Bank of India I) in current account 1320 69 66 1354 01 26 II) in other accounts 0 0 1654 07 21 1698 16 94

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(` 000’s) As at As at 31-03-2019 31-03-2018

SCHEDULE 7 - BALANCES WITH BANKS & MONEY AT CALL AND SHORT NOTICE

I. IN INDIA

(i) Balance with Banks a. in current accounts 45 48 30 41 22 36 b. in other deposit accounts 31 62 30 00

45 79 92 41 52 36

(ii) Money at call and short notice a. with banks 0 0 b. with RBI in reverse repo 249 00 00 270 00 00 c. with other institutions 74 96 00 0 323 96 00 270 00 00

369 75 92 311 52 36

II. OUTSIDE INDIA (I) Balance with Banks a. in current accounts 145 28 15 5 27 06 b. in other accounts 0 0 145 28 15 5 27 06 515 04 07 316 79 42

SCHEDULE 8 - INVESTMENTS

I. INVESTMENTS IN INDIA

I. Government Securities [incl. treasury bills, & zero coupon bonds] 7449 05 05 9625 15 52

II. Other approved securities 0 0

III. Shares 124 02 47 182 16 74

IV. Debentures & Bonds 579 13 83 606 68 49

V. Subsidiaries and Joint Ventures 0 0

VI Others [including Commercial Paper, Mutual Funds, Security Receipt, Units, etc.] 277 95 18 353 74 08

8430 16 53 10767 74 83

GROSS INVESTMENTS IN INDIA 8713 15 93 10868 19 94

LESS: DEPRECIATION 282 99 40 100 45 11

NET INVESTMENTS IN INDIA 8430 16 53 10767 74 83

II. INVESTMENTS OUTSIDE INDIA NIL NIL 8430 16 53 10767 74 83

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(` 000’s) As at As at 31-03-2019 31-03-2018

SCHEDULE 9 - ADVANCES A. I. Bills purchased & discounted 232 24 13 421 44 32 II. Cash credits, overdrafts & loans repayable on demand 8963 50 53 15434 63 77 III. Term loans 10907 51 27 9912 12 08 20103 25 93 25768 20 17 B. PARTICULARS OF ADVANCES I. Secured by tangible assets [incl. advances against Book Debts] 19929 18 06 25371 63 92 II. Covered by Bank / Govt. Guarantees 0 0 III. Unsecured 174 07 87 396 56 25 20103 25 93 25768 20 17 C. SECTORAL CLASSIFICATION OF ADVANCES I. Priority Sector 8203 96 85 9465 45 81 II. Public Sector 0 0 III. Banks 0 0 IV. Others 11899 29 08 16302 74 36 20103 25 93 25768 20 17

SCHEDULE 10 - FIXED ASSETS I. PREMISES At cost 65 24 18 65 05 03 At Revaluation Value 175 49 12 175 49 12 Addition due to Revaluvation Value 16 63 13 0 Additions during the year 41 10 65 19 15 298 47 08 240 73 30 Deductions during the year 7 35 0 298 39 73 240 73 30 Less: Depreciation to date 23 57 52 274 82 21 20 08 84 220 64 46

II. OTHER FIXED ASSETS (INCLUDING FURNITURE & FIXTURES) At Cost 500 80 89 402,47,12 Additions during the year 77 59 98 103,33,00 578 40 87 505,80,12 Deductions during the year 5 78 49 4,99,23 572,62,39 500,80,89 Depreciation to date 377,49,17 195,13,22 319,00,00 181,80,89 TOTAL 469,95,43 402,45,35

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(` 000’s) As at As at 31-03-2019 31-03-2018

SCHEDULE 11 - OTHER ASSETS

I. Inter-Office Adjustments (net) 2 35 38 0

II. Interest Accrued 194 68 07 264 80 83

III. Tax Paid in Advance and Tax Deducted at Source (net) 375 09 17 179 37 40

IV. Deferred Tax Asset / Liabilities (net) 859 55 00 464 95 16

V. Stationery & Stamps 2 66 90 2 55 24

VI. Non Banking Assets acquired in satisfaction of claims 139 37 88 78 25 71

VII. Others 299 94 72 485 91 55

1873 67 12 1475 85 89

SCHEDULE 12 - CONTINGENT LIABILITIES

I. Claims against the Bank not acknowledged as debts 961 75 50 135 85 40

II. Liability for partly paid Investments 0 0

III. Liability on account of outstanding forward exchange contracts 7538 61 61 2339 04 82

IV. Guarantees given on behalf of constituents

In India 1178 53 29 1085 54 64

Outside India 58 12 98 98 81 72

V. Acceptances, Endorsements & Other Obligations 637 24 76 1170 42 24

VI. Other items for which the Bank is contingently liable 57 58 06 42 61 57

10431 86 20 4872 30 39

Year ended Year ended 31-03-2019 31-03-2018

SCHEDULE 13 - INTEREST EARNED

I. Interest / discount on advances / bills 2163 15 27 2331 47 02

II. Income on Investments 666 34 80 693 05 43

III. Interest on balance with Reserve Bank of India & other inter-bank Funds 6 84 93 7 02 93

IV. Others 3 54 39 10 06 79

2839 89 39 3041 62 17

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(` 000’s) Year ended Year ended 31-03-2019 31-03-2018

SCHEDULE 14 - OTHER INCOME

I. Commission, Exchange and Brokerage 115 62 27 121 76 42

II. Profit / Loss on sale of Investments (net) -18 60 47 64 40 17

III. Profit / Loss on sale of land, Buildings & Other Assets 82 54 - 18 35

IV. Profit / Loss on Exchange Transactions (net) 11 73 41 12 18 02

V. Income earned by way of Dividends from Companies in India. 1 87 13 3 29 88

VI. Miscellaneous Income 138 86 91 145 34 64

250 31 79 346 80 78

SCHEDULE 15 - INTEREST EXPENDED

I. Interest on Deposits 2102 09 31 1987 99 37

II. Interest on Reserve Bank of India / Inter-Bank Borrowings 177 65 82 263 02 73

2279 75 13 2251 02 10

SCHEDULE 16 - OPERATING EXPENSES

I. Payments to and Provision for Employees 401 66 07 392 13 36

II. Rent, Taxes & Lighting 87 92 21 76 52 73

III. Printing & Stationery 9 96 45 7 42 41

IV. Advertisement & Publicity 8 32 12 9 44 23

V. Depreciation on Bank's Property 67 20 93 58 84 16

VI. Director's fees, allowances 1 24 78 1 17 25

VII. Auditors' fees & Expenses (incl. Branch Auditors) 1 80 30 1 82 40

VIII.Law Charges 5 58 18 2 34 57

IX. Postage, Telegrams, Telephones, etc., 19 51 20 14 36 98

X. Repairs & Maintenance 2 92 04 7 13 74

XI. Insurance 39 25 83 33 35 79

XII. Other Expenditure 177 02 55 177 45 35

822 42 66 782 02 97

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SCHEDULE 17 SIGNIFICANT ACCOUNTING POLICIES A. BASIS OF ACCOUNTING: The financial statements are prepared following the going concern concept, on historical cost basis unless otherwise stated and conform to the Generally Accepted Accounting Principles, (GAAP) in India which encompasses applicable statutory provisions, regulatory norms prescribed by the Reserve Bank of India (RBI) from time to time, Accounting Standards (AS) specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extent applicable and current practices prevailing in the banking industry in India. B. USE OF ESTIMATES: The preparation of the financial statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities including contingent liabilities as of the date of the financial statements and the reported income and expenses during the reported period. The Management believes that the estimates and assumptions used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. The differences, if any between estimates and actual will be dealt appropriately in future periods. C. PRINCIPAL ACCOUNTING POLICIES 1. TRANSACTIONS INVOLVING FOREIGN EXCHANGE: (a) Foreign Currency Assets and Liabilities are evaluated at the exchange rates prevailing at the close of the year as per the guidelines issued by FEDAI. The resultant profit or loss is accounted for. (b) Income and Expenditure in foreign currency are translated at the exchange rates prevailing on the date of the respective transaction. (c) Outstanding forward exchange contracts in each currency are revalued at the Balance Sheet date at the corresponding forward rates for the residual maturity of the contract, in accordance with the guidelines of FEDAI and the provisions of AS-11. The difference between revalued amount and the contracted amount is recognized as profit or loss, as the case may be. (d) Contingent liabilities on guarantees, letters of credit, acceptances and endorsements are reported at the rates prevailing on the Balance Sheet date. 2. INVESTMENTS: (a) Investments are categorized under the heads 'Held to Maturity', Available for Sale, and 'Held for Trading' and are valued in accordance with the guidelines of the Reserve Bank of India (b) Brokerage / commission etc, paid in connection with the acquisition of investments is charged to revenue and not included in cost. (c) Broken period interest paid / received on debt instruments is treated as interest expense / income. (d) Security receipts are valued at NAV as declared by Securitisation Companies (e) The excess of acquisition cost over the face value of securities under "Held to Maturity" category is amortised over the remaining period to maturity. (f) Costs including brokerage and commission pertaining to investments, paid at the time of acquisition, are charged to the profit and loss account. Cost of investments is computed based on the Weighted Average Rate method. (g) Profit / loss on sale of investments in the 'Held to Maturity' category is recognized in the profit and loss account and profit is thereafter appropriated (net of applicable taxes and statutory reserve requirements) to capital reserve. Profit / loss on sale of investments in 'Available for Sale' and 'Held for Trading' categories is recognised in the profit and loss account. (h) All Repo and Reverse Repo transactions are accounted for as borrowing and lending transactions respectively in accordance with the extant RBI guidelines. 3. ADVANCES: 3.1 In accordance with the prudential norms issued by RBI: (a) Advances are classified into standard, sub-standard, doubtful and loss assets borrower-wise; (b) Provisions are made for loan losses, and (c) General provision for standard advances is made. 3.2 Advances disclosed are net of provisions made for non-performing assets, ECGC claims settled, part recovery towards NPA accounts receipts held under sundries, and provision made for sacrifice of interest / diminution in the value of restructured advances measured in present value terms as per RBI guidelines. 4. FIXED ASSETS AND DEPRECIATION: (a) Fixed assets are accounted for at their historical cost except for Land and Building which are accounted at their revalued cost. (b) Software is capitalised along with computer hardware and included under Other Fixed Assets. (c) Depreciation on assets other than computers are provided on Straight Line Method after considering the useful life specified in Schedule II to the Companies Act, 2013 except for hand held communication devices(other than Tablets) which are depreciated in full considering the fast changing technology and obsolescence.

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(d) Depreciation on computers and Software are provided for on straight-line method at the rate of 33.33% as per the guidelines issued by the Reserve Bank of India. (e) Depreciation for premises, in which land cost and construction cost could not be ascertained separately, is provided on the total cost.

5. EMPLOYEE BENEFITS: (a) Annual contributions to the approved Employees' Gratuity Fund, Approved Pension Fund and Provision for Leave Encashment benefits are made on actuarial basis and net actuarial gain/loss are recognised as per Accounting Standard 15. Contribution made by the bank to Provident Fund and Contributory Pension Scheme are charged to Profit & Loss account. (b) The Bank follows the intrinsic value method to account for its employee compensation costs arising from grant of Employee Stock Options.

6. PROVISION FOR TAXATION: Provision for taxation is made on the basis of the estimated tax liability, after due consideration of the judicial pronouncements and legal opinion, with adjustment for deferred tax in terms of the Accounting Standard 22 (Accounting for Taxes on Income).

7. REVENUE RECOGNITION: (a) Income is accounted for on accrual basis. (b) Interest income on non-performing advances/investments are recognized on realization basis, owing to the significant uncertainty in collection thereof: (c) Interest on tax refund from Income Tax Department is accounted based on assessment orders received. (d) Dividend Income on Investments is accounted based on declaration basis.

8. SEGMENT REPORTING: (a) The Bank recognises the Business Segment as the Primary Reporting Segment and Geographical Segment as the Secondary Reporting Segment, in accordance with the RBI guidelines and in compliance with the Accounting Standard 17. (b) Business Segment is classified into (a) Treasury (b) Corporate and Wholesale Banking, (c) Retail Banking and (d) Other Banking Operations. (c) Geographical Segment consists only of the Domestic Segment since the Bank does not have any foreign branches.

9. EARNINGS PER SHARE: Basic and Diluted earnings per equity share are reported in accordance with the Accounting Standard 20 "Earnings per share". Basic earnings per equity share are computed by dividing net profit by the weighted average number of equity shares outstanding for the year. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

10. IMPAIRMENT OF ASSETS The Bank assesses at each balance sheet date whether there is any indication that an asset may be impaired. Impairment loss, if any, is provided in the Profit and Loss Account to the extent the carrying amount of assets exceeds their estimated recoverable amount.

11. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS: (a) As per the Accounting Standard 29 "Provisions, Contingent Liabilities and Contingent Assets", the Bank recognises provisions only when it has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made. (b) Contingent Liability is recognised and disclosed only when a legal dispute is pending before a court of law/ forum/ Banking Ombudsman. (c) Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realised. 12. NET PROFIT: The net profit as per the Profit & Loss account is arrived at after necessary provisions towards: - a) Taxation. b) Advances and other assets. c) Shortfall in the value of investments. d) Staff Retirement benefits. e) Other usual and necessary provisions.

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13. CASH AND CASH EQUIVALENTS: Cash and cash equivalents include cash in hand, Balance with RBI, Balance with other Banks and money at Call and Short Notice. Cash flows are reported using indirect method, whereby Profit (Loss) before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the bank are segregated.

SCHEDULE 18 NOTES ON ACCOUNTS 1. The reconciliation of inter branch transactions has been completed up to 31.03.2019 and tallying of balances is ensured on an ongoing basis. 2. CAPITAL RAISED THROUGH QIP ISSUE: During the year 2018-19, the Bank has allotted 6,38,31,328 equity shares of face value of ` 10/- each at a premium of ` 62 per share aggregating to ` 459.59 crore to Qualified Institutional Buyers. 3. DISCLOSURE REQUIREMENTS

3.1 CAPITAL (` in crore) Items 2018-19 2017-18

i) Common Equity Tier 1 Capital Ratio (%) - (Basel-III) 5.72 8.05

ii) Tier 1 Capital Ratio (%) 5.72 8.05

iii) Tier 2 Capital Ratio (%) 2.00 1.76

iv) Total Capital Ratio (CRAR) (%) 7.72 9.81

v) Percentage of the shareholding of the Government of India in public sector bank NA NA

vi) Amount of equity capital raised 460.49 786.32

vii) Amount of Additional Tier 1 capital raised, of which PNCPS : PDI : NIL NIL

viii) Amount of Tier II Capital raised, of which Debt capital instruments NIL 100.00 Preference Share Capital instruments NIL NIL

3.2 INVESTMENTS (` in crore) Particulars 2018-19 2017-18 (1) Value of Investments (i) Gross Value of Investments (a) In India 8713.16 10868.20 (b) Outside India. NIL NIL (ii) Provisions for Depreciation (a) In India 282.99 100.45 (b) Outside India NIL NIL (iii) Net Value of Investments (a) In India 8430.17 10767.75 (b) Outside India. NIL NIL

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3.2 INVESTMENTS (Contd.) (` in crore) Particulars 2018-19 2017-18

(2) Movement of provisions held towards Depreciation on investments. (i) Opening balance 100.45 51.40 (ii) Add: Provisions made during the year 189.58 53.33 (iii) Less: Write-off / write-back of excess provisions during the year 7.04 4.28 (iv) Closing Balance 282.99 100.45

3.2.1 In respect of securities held under HTM category, premium paid of ` 29.25 crore (previous year ` 30.90 crore) has been amortized during the year and debited under "Interest received on Investments".

3.2.2 Repo Transactions (in face value terms) (` in crore) Minimum Maximum Daily Average Outstanding outstanding outstanding outstanding As on during during during March 31, the year the year the year 2019

Securities sold under repo I. Government Securities 0.00 2338.18 384.51 126.27 (0.00) (2470.00) (1016.28) (2070.00) II. Corporate debt Securities Nil Nil Nil Nil (Nil) (Nil) (Nil) (Nil) Securities purchased under reverse repo I. Government Securities 0.00 1351.87 93.81 267.91 (0.00) (2430.00) (97.63) (270.00) II. Corporate debt Securities Nil Nil Nil Nil (Nil) (Nil) (Nil) (Nil) (Figures in bracket indicates in previous year)

3.2.3 Non-SLR Investment Portfolio i) Issuer composition of Non SLR investments: (` in crore)

No. Issuer Amount Extent of Extent of Extent of Extent of Private ‘Below ‘Unrated’ ‘Unlisted’ Placement Investment Securities Securities Grade’ Securities (1) (2) (3) (4) (5) (6) (7) 1 PSUs 220.63 65.34 2 FIs 25.75 6.00 3 Banks 28.17 5.00 4 Private Corporates 647.62 535.64 11.93 112.30 137.30 5 Subsidiaries/ Joint Ventures 0 0 6 Others 338.16 332.00 7 Less: Provision held towards depreciation -279.22 Total 981.11 943.97 11.93 112.30 137.30

Amounts reported under Columns 4, 5, 6 and 7 above may not be mutually exclusive.

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ii) Non-performing Non-SLR investments : (` in crore)

Particulars 2018-19 2017-18 Opening balance 52.58 27.76 Additions during the year since 1st April 125.61 24.82 Reductions during the above period 0.00 0.00 Closing balance 178.19 52.58 Total Provisions held (*) 135.78 36.26 (*) An amount of ` 0.95 Crore received towards part settlement is parked under sundries account.

3.2.4 Sale and transfers to / from HTM category During the year, the book value of securities sold under HTM category exceeds 5% of the book value of investments held in HTM category as at the beginning of the year. The details of HTM category as on 31.03.2019 are furnished hereunder: (` in crore) Market Value 6073.63

Book value 6284.95

Excess of book value over market value for which Provision is not made (211.32)

3.3 Derivatives 3.3.1 Forward Rate Agreement / Interest Rate Swap: (` in crore) Particulars 2018-19 2017-18 i) The notional principal of swap agreements 1425.10 NIL ii) Losses which would be incurred if counter parties failed to fulfill obligations under the agreements 0.00 NIL iii) Collateral required by the bank upon entering into swaps 0.00 NIL iv) Concentration of credit risk arising from the swaps 100% NIL v) The fair value of the swap book (1.36) NIL

3.3.2 Exchange Traded Interest Rate Derivatives: (` in crore)

S.No. Particulars 2018-19 2017-18

(i) Notional principal amount of exchange traded interest rate derivatives undertaken during the year (instrument-wise) NIL NIL

(ii) Notional principal amount of exchange traded interest rate derivatives outstanding as on 31st March 2018 (instrument-wise) NIL NIL

(iii) Notional principal amount of exchange traded interest rate derivatives outstanding and not "highly effective" (instrument-wise) NIL NIL

(iv) Mark-to-market value of exchange traded interest rate derivatives outstanding and not "highly effective" (instrument-wise) NIL NIL

3.3.3 Disclosures on risk exposure in derivatives Qualitative Disclosure: The Board of Directors, the Risk Management Committee (RMC), the Asset Liability Management Committee (ALCO), and the Market Risk Management Department are entrusted with the management of risks in derivatives. Operations in the Treasury are segregated into three functional areas, namely Front office, Mid-office and Back-office. Treasury Policy approved by the Board of Directors defines the framework for carrying out derivatives business and lays down policies and processes to measure, monitor and report risk arising from derivative transactions. The policy provides for (a) appropriate

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risk limits for different derivative products and (b) authority levels for review of limit breaches and to take appropriate actions in such events. The derivatives dealt by the bank are Forward Contracts in the foreign exchange market and Rupee OIS (Overnight Indexed Swap). Forward contracts are being used to hedge / cover the exposure in foreign exchange arising out of merchant transaction and trading positions. Rupee Derivatives are executed for hedging or for trading. To cover the risk arising out of the above derivatives, various risk limits like PV01, VaR, NOOP, AGL, IGL, Stop loss, Deal size, Counter party limits have been prescribed in the Treasury Policy of the Bank. The same is monitored by Mid Office which is independent of Treasury Department and reporting to Chief Risk Officer. The Mid office monitors the derivatives operations against prescribed policies and limits on a daily basis and submits MIS and details of exceptions if any on a daily basis. The Derivative transactions are conducted in the terms of the policy of the Bank as well as the extant guidelines issued by RBI from time to time.

Quantitative Disclosures: (` in crore) Sl. Currency Derivatives Interest rate Derivatives Particular No. 2018-19 2017-18 2018-19 2017-18

(i) Derivatives (Notional Principal Amount) NA NA NA NA a) For hedging NA NA NA NA b) For trading NA NA 1425.10 NA

(ii) Marked to Market Positions NA NA NA NA a) Asset (+) NA NA 2150.92 NA b) Liability (-) NA NA 2287.08 NA

(iii) Credit Exposure NA NA 35.76 NA

(iv) Likely impact of one percentage change in interest rate (100*PV01) NA NA NA NA a) On hedging derivatives NA NA NA NA b) On trading derivatives NA NA 10.20 NA

(v) Maximum and Minimum of 100*PV01 observed during the year NA NA NA NA a) On hedging NA NA NA NA b) On trading NA NA NA NA Maximum NA NA 10.20 NA Minimum NA NA NA NA

1. Banks may adopt the Current Exposure Method on Measurement of Credit Exposure of Derivative Products as per extant RBI instructions

3.3.4 Shifting of securities: For the year ended 31.03.2019, Bank has shifted securities amounting to ` 628.66 crore (Face Value) (Previous year ` 322.09 crore (Face Value) from HTM to AFS category and there was no loss on such transfer (Previous year - No loss). Further, Bank has shifted securities amounting to ` 872.08 crore (Face Value) (Previous year ` 590 crore Face Value) from AFS to HTM category and loss which arose on such transfer amounting to ` 7.04 crore has been provided during the year. (Previous year ` 4.28 crore)

3.3.5 SLR Securities: (` in crore) As at 31.03.2019 As at 31.03.2018 Book Market Book Market Particulars Value Value Value Value Government Securities SLR (CG, SG,TB) 7,452.83 7,237.73 9,640.94 9,334.84 Approved securities - SLR 0.00 0.00 0.00 0.00

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3.3.6 Spreading of mark to market losses on Investments: The bank had spread the provisioning for MTM losses on the investments held in AFS and HFT categories for the quarter ended 31.03.2018 and 30.06.2018 equally over four quarters as permitted by RBI vide circular DBR.No.BP.BC.102/21.04.048/2017-18 dated April 2, 2018 and DBR.No.BP.BC.113/21.04.048/2017-18 dated June 15, 2018 respectively. Accordingly, Bank has provided ` 61.27 crore for depreciation of the investment portfolio for the year ended 31st March 2019. The unamortised amount as at 31st March 2019 is Nil.

3.4 Asset Quality 3.4.1 Non-Performing Assets: (` in crore) Particulars 2018-19 2017-18 (i) Net NPAs to Net Advances (%) 7.49% 5.66% (ii) Movement of NPAs (Gross) (a) Opening balance 2694.21 640.19 (b) Additions during the year 1412.21 2916.02 (c) Reductions during the year 747.43 862.00 (d) Closing balance 3358.99 2694.21 (iii) Movement of Net NPAs (a) Opening balance 1457.89 418.42 (b) Additions during the year 1037.93 1901.12 (c) Reductions during the year 989.53 861.65 (d) Closing balance 1506.29 1457.89 (iv) Movement of provisions for NPAs (excluding provisions on standard assets) (a) Opening balance 1169.05 170.43 (b) Provisions made during the year 995.63 1343.16 (c) Write-off/ write-back of excess provisions 379.41 344.54 (d) Closing balance 1785.27 1169.05

3.4.2 Divergence in the asset classification and provisioning: In terms of the RBI Circular DBR.BP.BC.No. 32/21.04.018/2018-19 dated 1st April 2019, banks are required to disclose the divergences in asset classification and provisioning consequent to RBI's annual supervisory process in their notes to accounts wherever either a) the additional provisioning requirements assessed by RBI exceeds 10% of the reported profit before provisions and contingencies for the reference period or b) the additional Gross NPAs identified by RBI exceed 15% of the published incremental Gross NPAs for the reference period, or both. Accordingly, divergence in Asset Classification and Provisioning for NPAs in compliance to Risk Assessment Report (RAR) of RBI for the financial year 2017-18 is reported hereunder. (` in crore) S No. Particulars Amount 1. Gross NPAs as on March 31, 2018 as reported by the bank 2694.21 2. Gross NPAs as on March 31, 2018 as reported by RBI 2835.91 3. Divergence in Gross NPAs (2-1) 141.70 4. Net NPAs as on March 31, 2018 as reported by the bank 1457.89 5. Net NPAs as on March 31, 2018 as reported by RBI 1437.09 6. Divergence in Net NPAs (5-4) -20.80 7. Provisions for NPAs as on March 31, 2018 as reported by the bank 1169.05 8. Provisions NPAs as on March 31, 2018 as reported by RBI 1331.55 9. Divergence in Provisioning (8-7) 162.50 10. Reported Net Profit after Tax (PAT) for the year ended March 31, 2018 -584.87 11. Adjusted (notional) Net Profit after Tax (PAT) for the year ended March 31, 2018 after taking into account the divergence in provisioning -747.37 (Resultant impact of the RBI divergence has been duly considered and given effect to as of 31.03.2019)

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ANNUAL REPORT 2018-2019

Total Loss in crore)

(

Doubtful

Sub-Standard

Standard

Total

Loss Doubtful

Others Total

Sub-Standard

Standard

Total

Loss

Doubtful Sub-Standard Under SME Debt

Restructuring Mechanism Standard Total

Disclosure of Restructured Accounts

Loss

Doubtful

Sub-Standard Standard 0 000 0000 000 000000000 1 201 1406 032 080105113019 0 000 0000 000 000000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0 0 0 0 0.00 0.000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.37 0.000.00 2.37 0.06 0.000.00 0.00 0.00 0.00 0.00 0.00 0.06 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.56 0.00 0.00 0.00 0.00 0.00 0.56 0.00 0.11 0.00 0.00 0.00 0.00 0.00 0.00 2.93 0.00 0.11 0.00 0.00 0.00 2.93 0.00 0.17 0.00 0.00 0.00 0.00 0.00 0.17 0.00 0.00 0.00 0.000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 19.01 10.28 346.16 0.00 375.45 0.58 0.00 0.54 0.00 1.12 42.41 0.00 228.74 0.00 271.15 62.00 10.28 575.44 0.00 647.72 mount No. of borrowers No. of borrowers No. of borrowers No. of borrowers Amount outstanding Provision thereon A outstanding Provision thereon Amount outstanding Provision thereon Amount outstanding Provision thereon Details Asset Classification Type of RestructuringMechanism CDR Under Upgradations to restructured standard category during the FY Restructured Accounts as on April 1 of the FY (opening figures*) Restructured standard advances which cease to attract higher provisioning and / or additional risk weight at the end of the FY and hence need not be shown as restructured standard advances at the beginning of the next FY Fresh restructuring/ Additional facilities during the year ** 3. 4. 1. 2. Sl. No. 3.4.3 Particulars of Accounts Restructured:

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ANNUAL REPORT 2018-2019

Total Loss in crore)

(

Doubtful

Sub-Standard Standard

63.88 crores and cash recovery of

Total `

Loss Doubtful

Others Total

Sub-Standard

Standard

Total

Loss Doubtful

85.61 crores; 2 accounts sold to ARC amounting

` Sub-Standard Under SME Debt

Restructuring Mechanism Standard

Total

Loss

Doubtful Sub-Standard (Contd.)

Under CDR Mechanism Standard 10 0001 -01 0 0 0 0 0-10 0 00 0 0-11 0 -1100 1 000 0102 000 010110203 0 101 0404 022 170103112016 0.00 -10.34 10.340.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.13 0.00 0.13 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.13 -10.21 0.00 10.34 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 268.590.00 0.00 268.59 0.00 0.10 0.60 0.00 0.00 0.54 0.60 0.00 0.00 0.64 0.00 40.19 0.00 0.13 181.42 0.00 0.00 221.74 0.00 40.29 0.00 0.13 450.55 0.00 0.00 490.97 0.00 0.00 0.00 0.00 0.00 0.60 0.00 0.60 19.01 0.00 87.91 0.00 106.92 0.02 0.00 0.00 0.00 0.02 2.55 0.00 47.42 0.00 49.97 21.58 0.00 135.33 0.00 156.91 No. of borrowers No. of borrowers No. of borrowers Amount outstanding Amount outstanding Amount outstanding Provision thereon Provision thereon 0.17 crore relates to miscellaneous charges debited in the existing restructured accounts during year. ` Details 156.91 crores, 1 account by way of technical written off amounting to ` Asset Classification Type of Restructuring Down gradations of restructured accounts during the FY Restructured Accounts as on March 31 of the FY (closing figures****) Write- offs/ recovery of restructured accounts during the FY *** 7.42 crores in 6 accounts. ` 6. 7. 5. Sl. No. * The reported provision figures are Diminution / Erosion in fair value. ** The amount of *** Out of **** Excluding the figures of Standard Restructured Advances which do not attract higher provisioning or risk weight. Disclosure of Restructured Accounts

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3.4.4 Details of financial assets sold to Securitization / Reconstruction Company for Asset Reconstruction (A) Details of Sales: (` in crore)

Particulars 2018-19 2017-18 i. No. of accounts 5 2 ii. Aggregate value (net of provisions) of accounts sold to SC/RC 148.16 90.99 iii. Aggregate consideration 89.29 91.42 iv. Additional consideration realized in respect of accounts transferred in earlier years 0.00 0.00 v. Aggregate profit / (loss) over net book value. -58.87 0.42

(B) NPA Assets Sold to ARC: (` in crore) Backed by NPAs sold by other banks / Backed by NPAs sold by the financial institutions / non-banking Total Particulars bank as underlying financial companies as underlying 2018-19 2017-18 2018-19 2017-18 2018-19 2017-18 Book value of 329.54 338.78 2.46 2.81 332.00 341.59 investments in security Receipts as at 31st March

(C) Disclosures of investment in Security Receipts: (` in crore) SRs issued more than SRs Issued within SRs issued more than Particulars 5 years ago but within past 5 years 8 years ago past 8 years (i) Book value of SRs backed by NPAs sold by the bank as underlying 207.11 56.29 66.14 Provision held against (i) 0.85 25.00 66.14 (ii) Book value of SRs backed by NPAs sold by other banks / financial institutions / non-banking financial companies as underlying 0.00 2.46 0.00 Provision held against (ii) 0.00 2.46 0.00 Total (i) + (ii) 207.11 58.75 66.14

3.4.5 Details of non-performing financial assets purchased/sold (from/to other Banks) A. Details of non-performing financial assets purchased: (` in crore) Particulars 2018-19 2017-18 1 (a) No. of accounts purchased during the year NIL NIL (b) Aggregate outstanding NIL NIL 2 (a) Of these, number of accounts restructured during the year NIL NIL (b) Aggregate outstanding NIL NIL

B. Details of non-performing financial assets sold: (` in crore) Particulars 2018-19 2017-18 1. No. of accounts sold NIL NIL 2. Aggregate outstanding NIL NIL 3. Aggregate consideration received NIL NIL

3.4.6 Provisions on Standard Assets (` in crore) Particulars 2018-19 2017-18 Provisions towards Standard Assets 98.31 98.31

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3.5 Business Ratios: Particulars 2018-19 2017-18 (i) Interest Income as a percentage to Working Funds 7.41 8.15 (ii) Non-interest income as a percentage to Working Funds 0.65 0.93 (iii) Operating Profit as a percentage to Working Funds -0.03 0.95 (iv) Return on Assets -2.32 -1.57 (v) Business (Deposits plus advances) per employee (` in crore) 10.42 11.30 (vi) Profit per employee (` in crore) -0.18 -0.11

3.6 Asset Liability Management: Maturity pattern of certain items of assets and liabilities (` in crore)

1 Day 2 to 7 8 to 14 15 to 28 29 days Over 3 Over 6 Over 1 year & Over 3 Over 5 Total Items days days days to 3 months months & months & upto 3 years years & upto years upto 6 months upto 1 year 5 years Deposits 348.60 696.17 903.19 418.15 1896.63 1595.31 3604.61 12004.99 904.11 6907.68 29279.44 (359.64) (831.86) (539.16) (943.90) (3488.14) (3158.11) (6323.82) (10161.05) (934.14) (6569.66) (33309.48) Advances (Net) 128.27 726.95 847.50 1081.31 3777.34 347.37 1109.69 8430.58 1280.89 2373.36 20103.26 (246.04) (489.99) (526.89) (2303.97) (1814.82) (2641.65) (1041.43) (9909.34) (3099.45) (3694.63) (25768.20) Investments (Net) 84.06 183.83 0.00 0.00 39.24 32.41 905.07 340.24 295.05 6550.28 8430.17 (15.93) (221.40) (0.00) (0.00) (18.05) (53.45) (1961.20) (566.29) (383.80) (7547.63) (10767.75) Borrowings 0.00 252.56 0.00 0.00 0.00 0.00 0.00 350.50 78.10 240.10 921.26 (0.00) (2569.08) (500.00) (100.00) (50.00) (0.00) (125.00) (300.00) (50.50) (318.20) (4012.78) Foreign Currency 152.68 0.58 3.04 1.80 9.71 21.49 0.00 0.00 0.00 0.00 189.30 Assets (19.86) (0.16) (1.92) (3.53) (24.74) (27.47) (0.00) (0.00) (0.00) (0.00) (77.67) Foreign Currency 1.03 6.32 7.83 2.06 5.45 5.45 25.28 40.66 17.88 35.99 147.94 Liabilities (29.10) (0.00) (0.00) (0.11) (2.17) (7.74) (16.82) (34.35) (14.66) (0.00) (104.95) (Figures in brackets indicates in previous year). The above data has been compiled by the management on the basis of the guidelines of RBI which have been relied upon by Auditors.

3.7 Exposures 3.7.1 Exposure to Real Estate Sector: (` in crore) Category 2018-19 2017-18 a) Direct exposure (i) Residential Mortgages – 1760.76 1994.55 Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented; (ii) Commercial Real Estate – 1512.99 2183.88 Lending secured by mortgages on commercial real estates (office buildings, retail space, multi-purpose commercial premises, multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction, etc.). Exposure would also include non-fund based (NFB) limits; (iii) Investments in Mortgage Backed Securities (MBS) and other securitised exposures - (a) Residential 0.00 0.00 (b) Commercial Real Estate 0.00 0.00 b) Indirect Exposure Fund based and non-fund based exposures on National Housing Bank (NHB) and Housing Finance Companies (HFCs). 126.27 703.99 Total Exposure to Real Estate Sector 3400.02 4882.42

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3.7.2 Exposure to Capital Market: (` in crore) Particulars 2018-19 2017-18

(i) Direct investment in equity shares, convertible bonds, convertible debentures and units of equity-oriented mutual funds the corpus of which is not exclusively invested in corporate debt; 201.61 194.74

(ii) Advances against shares / bonds / debentures or other securities or on clean basis to individuals for investment in shares (including IPOs / ESOPs), convertible bonds, convertible debentures, and units of equity-oriented mutual funds; NIL NIL

(iii) Advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security; 5.58 7.22

(iv) Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e. where the primary security other than shares / convertible bonds / convertible debentures / units of equity oriented mutual funds does not fully cover the advances; 11.68 NIL

(v) Secured and unsecured advances to stockbrokers and guarantees issued on behalf of stockbrokers and market makers; 150.00 170.00

(vi) Loans sanctioned to corporates against the security of shares / bonds/debentures or other securities or on clean basis for meeting promoter's contribution to the equity of new companies in anticipation of raising resources; NIL NIL

(vii) Bridge loans to companies against expected equity flows / issues; NIL NIL

(viii) Underwriting commitments taken up by the banks in respect of primary issue of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds; NIL NIL

(ix) Financing to stockbrokers for margin trading; NIL NIL

(x) All exposures to Venture Capital Funds (both registered and unregistered) NIL NIL

Total Exposure to Capital Market 368.87 371.96

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3.7.3 Risk Category wise Country Exposure (` in crore) Exposure (net) Provision held Exposure (net) Provision held Risk Category as at as at as at as at 31/3/2019 31/3/2019 31/3/2018 31/3/2018 Insigniﬁ cant 206.92 NIL 54.85 NIL Low 24.61 NIL 44.22 NIL Moderate 2.83 NIL 0.73 NIL High 0.20 NIL 0.00 NIL Very High 0.00 NIL 0.00 NIL Restricted 0.00 NIL 0.00 NIL Off-credit 0.00 NIL 0.00 NIL Total 234.56 NIL 99.80 NIL As the bank’s exposure for the year in respect of risk category wise country exposure (Foreign exchange transactions) is less than 1% of total assets of the bank, no provision is considered necessary.

3.7.4 Details of Single Borrower Limit (SBL)/ Group Borrower Limit (GBL) exceeded by the bank A. SBL exceeded by the Bank for the period 01/04/2018 to 31/03/2019 NIL (PY NIL) B. GBL exceeded by the Bank for the period 01/04/2018 to 31/03/2019 NIL (PY NIL)

3.7.5 Unsecured Advances (Amount of Advances for which, intangible securities has been taken) (` in crore)

As on As on Particulars 31.03.2019 31.03.2018 The total amount of Advances for which intangible Securities such as charge over the NIL NIL rights, licenses, Authority, etc. has been taken. Estimated value of such intangible collaterals NIL NIL

3.8 Miscellaneous 3.8.1 Disclosure of Penalties imposed by RBI: A penalty of `47,800/- has been imposed on account of defi ciency observed in Specifi ed Bank Notes (SBN) remittances made to RBI by our Branches and a penalty of `20,650/- has been imposed on account of defi ciency observed in functioning of Currency chests like mutilated currencies observed in cash remittances to RBI.

4. Disclosure in terms of Accounting Standards: 4.1 Accounting Standard 5: Net Profi t or Loss for the period, prior period items and changes in Accounting Policies: There are no material prior period income and expenditure included in the Profi t & Loss account, which requires a disclosure as per Accounting Standard 5 There has been no change in the Accounting policies followed by the bank during the year ended 31.03.2019 as compared to those in the preceding fi nancial year ended 31.03.2018.

4.2 Accounting Standard 9: Revenue Recognition: Bank is following accrual method of accounting and hence no disclosure is warranted under Accounting Standard 9.

45 ANNUAL REPORT 2018 - 2019

4.3 Disclosure in terms of AS 10 – Fixed Assets (Revaluation of Premises): In accordance with banks stated policy, revaluation of the premises in its ﬁ xed assets portfolio was carried out during the years 2010-11, 2015-16 &2018-19 by the bank using the services of Banks approved empanelled Independent valuers. Appreciation arising out of such revaluation was accounted with corresponding credit to Revaluation Reserves. The details are as under (` In crore)

Original Cost of Premises 106.28 Incremental Value on account of revaluation made in 2011 - ` 81.51 Incremental Value on account of revaluation made in 2016 - ` 93.98 192.12 Incremental Value on account of revaluation made in 2019 - ` 16.63 Depreciation on Original Cost - ` 13.07 23.58 Depreciation on Revalued Cost - ` 10.51 Written Down Value of such revalued assets 274.82

4.4 Accounting Standard 15 – Employee Benefi ts 4.4.1 The bank is following Accounting Standard 15 (Revised 2005) “Employee Benefi ts” as under: In respect of contributory plans viz. – Provident Fund and Contributory Pension Scheme, the bank pays fi xed contribution at pre-determined rates to a separate entity, which invests in permitted securities. The obligation of the bank is limited to such fi xed contribution. In respect of Defi ned Benefi t Plans, viz. Gratuity and pension as well as for leave encashment, provision has been made based on actuarial valuation as per the guidelines. The summarized position of Post-employment benefi ts and long term employee benefi ts recognized in the profi t and loss account and balance sheet as required in accordance with the Accounting Standard -15 (Revised) are as under:

I. Principal Actuarial Assumptions at the Balance Sheet Date (Expressed as weighted Averages) Leave Gratuity Pension Particulars Encashment (Funded) (Funded) (Unfunded) Discount Rate 7.71% 7.65% 7.71% Salary Escalation Rate 5.00% 5.00% 5.00% Attrition Rate 4.00% 4.00% 4.00% Expected Rate of return on Plan Assets 9.00% 9.00% -

II. Change in the Present value of obligations (` in crore) Leave Gratuity Pension Particulars Encashment (Funded) (Funded) (Unfunded) Present Value of obligations as at the beginning of the year 87.12 333.33 56.04 Interest Cost 6.37 23.66 4.17 Current Service Cost 4.71 52.01 7.71 Past service cost (non-vested benefi ts) 0.00 0.00 0.00 Past service cost (vested benefi ts) 0.00 0.00 0.00 Benefi ts Paid 9.13 48.12 3.84 Actuarial loss/(gain) on obligation (balancing fi gure) 1.63 -15.38 2.95 Present Value of obligations as at the year end 90.70 345.50 67.04

46 ANNUAL REPORT 2018 - 2019

III. Change in Fair Value of Plan Asset (` in crore) Leave Gratuity Pension Particulars Encashment (Funded) (Funded) (Unfunded) Fair value of Plan Assets at the beginning of the year 88.99 338.41 - Expected return on Plan Assets 8.01 30.46 - Employer's Contribution 15.08 39.58 - Beneﬁ ts Paid 9.13 48.12 - Actuarial loss/(gain) on plan assets (balancing ﬁ gure) -11.32 -35.83 - Fair Value of Plan Asset at the end of the year 91.63 324.49 -

IV. Actual Return on Plan Assets (` in crore)

Leave Gratuity Pension Particulars Encashment (Funded) (Funded) (Unfunded) Expected return on plan assets 8.01 30.46 - Actuarial gain/(loss) on plan assets -11.32 -35.83 - Actual return on plan assets -3.31 -5.38 -

V. Actuarial Gain / Loss recognized (` in crore) Leave Gratuity Pension Particulars Encashment (Funded) (Funded) (Unfunded) Actuarial gain/(loss) for the Period - Obligation 1.63 -15.38 2.95 Actuarial gain/(loss) for the Period - Plan Assets -11.32 -35.83 -- Total (gain)/loss for the period -9.69 -51.21 2.95 Actuarial (gain)/loss recognized in the period 12.95 20.46 2.95 Unrecognized actuarial (gain)/loss at the end of the year 0.00 0.00 0.00

VI. Amount recognized in Balance Sheet (` in crore) Leave Gratuity Pension Particulars Encashment (Funded) (Funded) (Unfunded) Present value of the Obligation 90.70 345.49 67.04 Fair value of plan assets 91.63 324.49 -- Difference -0.93 21.00 67.04 Unrecognized Transitional liability 0.00 0.00 0.00 Unrecognized past service cost (non vested beneﬁ ts) 0.00 0.00 0.00 Liability recognized in the Balance Sheet -0.93 21.00 67.04

47 ANNUAL REPORT 2018 - 2019

VII Expenses Recognized in Profi t & Loss Account (` in crore) Leave Gratuity Pension Particulars Encashment (Funded) (Funded) (Unfunded) Current Service Cost 4.71 52.01 7.71 Interest Cost 6.37 23.66 4.17 Expected return on Plan assets 8.01 30.46 -- Net actuarial (gain)/loss recognised in the year 12.95 20.46 2.95 Transitional Liability recognized in the year 0.00 0.00 0.00 Past service cost (non-vested benefi ts) 0.00 0.00 0.00 Past service cost (vested benefi ts) 0.00 0.00 0.00 Expenses Recognized in Profi t & Loss Account 16.01 65.67 14.84

VIII. Movements in the Liability Recognized in the balance Sheet (` in crore) Leave Gratuity Pension Particulars Encashment (Funded) (Funded) (Unfunded) Opening net Liability * -1.86 -5.09 0.00 Opening amount determined under para 55 of AS15R Expense as Above 16.01 65.67 14.84 Contribution paid 15.08 39.58 0.00 Closing Net Liability * -0.93 21.00 14.84 * Net liability = obligation minus funded /provisions.

Leave Gratuity Pension Particulars Encashment (Funded) (Funded) (Unfunded) Opening balance 87.12 333.33 56.04 Closing balance 90.70 345.49 67.04

IX. Amount for the Current Period (` in crore) Leave Gratuity Pension Particulars Encashment (Funded) (Funded) (Unfunded) Present value of Obligation 90.70 345.49 67.04 Plan Assets 91.63 324.49 -- Surplus/(Deﬁ cit) 0.93 -21.00 67.04

48 ANNUAL REPORT 2018 - 2019

X. Major categories of Plan Assets (As % of Total Plan Assets)

Particulars Gratuity (Funded) Pension (Funded) Government of India Securities 58.64 23.66 High Quality Corporate Bonds / FDs 30.02 17.39 Short Term Debt Instruments 0.38 0.36 Equity Share of listed companies 0.00 0.00 Property 0.00 0.00 Special Deposit Scheme 1.15 0.00 Equity Mutual fund 2.82 0.36 Balance with Bank Account 4.71 0.95 Balance held at LIC India’s Running account 0.00 32.56 Annuity under Return of Purchase Price 0.00 17.06 Amount Receivable from Bank 0.00 6.12 Others (Interest Receivables) 2.02 1.54 Suspense 0.26 0.00 Total 100.00 100.00

XI. Enterprises Best Estimate (` in crore) Leave Particulars Gratuity Pension Encashment Enterprise’s Best Estimate of Contribution during next year 4.30 35.15 --

4.4.2 Enhancement in Gratuity Limits: Ministry of Labour and Employment, Government of India on 29th March, 2018 enhanced the gratuity payable to an employee under Payment of Gratuity Act, 1972 to not exceed `20 lakh from earlier limit of `10 lakh. As per RBI circular vide DBR. BP.9730/21.04.018/2017-18 dated 27.04.2018 the unamortised amount as on 31.03.2019 is NIL.

4.5 Employee Stock Option Scheme As on 31st March, 2018, the options in force were 22,19,431. During the year, bank had allotted 78149 options pursuant to exercise by employees and 2,77,404 options were cancelled/lapsed. As on 31st March 2019, the number of options in force are 18,63,878. The Bank has provided a sum of `1.39 crore towards proportionate compensation expenses for the year ended 31st March 2019 (PY- `3.80 crore).

49 ANNUAL REPORT 2018 - 2019

4.6. Accounting Standard 17 – Segment Reporting

SEGMENT REPORTING - MARCH 2019 (` in crore) PART A: BUSINESS SEGMENTS YEAR ENDED PARTICULARS 31/03/2019 31/03/2018 1. SEGMENT REVENUE : (Audited) (Audited) a. Treasury operations 668.19 779.96 b. Corporate/wholesale banking operations 705.42 776.30 c. Retail banking operations 1700.14 1811.37 d. Other banking operations 16.46 20.80 TOTAL 3090.21 3388.43 2. SEGMENT RESULTS (Operating Proﬁ t) a. Treasury operations 12.58 143.21 b. Corporate/wholesale Banking operations -26.09 58.59 c. Retail banking operations -6.70 136.70 d. Other banking operations 8.24 16.88 TOTAL -11.97 355.38 OPERATING PROFIT -11.97 355.38 PROVISIONS OTHER THAN TAX 1276.56 1306.15 PROFIT BEFORE TAX -1288.53 -950.78 Less : Tax expenses -394.43 -365.91 NET PROFIT -894.10 -584.87 CAPITAL EMPLOYED : a. Treasury operations 205.02 605.04 b. Corporate/wholesale banking operations 46.39 188.55 c. Retail banking operations 150.93 389.68 d. Unallocated Assets 1490.24 1144.40 TOTAL 1892.58 2327.67 PARTB – GEOGRAPHICAL SEGMENTS: Since the Bank is having domestic operations only no reporting is made under international segment.

4.7. Accounting Standard 18 – Related Party Disclosures Pursuant to Regulation 23(9) of Regulation 23(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015):

S. No. Name Designation

1 Mr. Parthasarathi Mukherjee Managing Director

Mr. S. Sundar 2 President & CFO (From 27.04.2018)

3 Mr. N. Ramanathan Company Secretary

50 ANNUAL REPORT 2018 - 2019

(` In crore)

Parent Relatives Associates Key (as per of key Items/ Related Party Subsidiaries / Joint Management Total ownership or Management Ventures Personnel control) Personnel March 31, 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 Borrowings NIL NIL NIL NIL Deposits NIL NIL NIL NIL Placement of Deposits NIL NIL NIL NIL Advances NIL NIL NIL NIL Investments NIL NIL NIL NIL Non-Funded Commitments NIL NIL NIL NIL Leasing/HP arrangements NIL NIL NIL NIL provided Leasing/HP arrangements NIL NIL NIL NIL availed Purchase of Fixed Assets NIL NIL NIL NIL Sale of Fixed Assets NIL NIL NIL NIL Interest Paid NIL NIL NIL NIL Interest Received NIL NIL NIL NIL Rendering of Services NIL NIL NIL NIL Receiving of Services NIL 6.47* 0.81** NIL 6.47 0.81 Management Contracts NIL NIL NIL NIL * Salary for MD pertaining to Feb-18 and Mar-18 has been waived. ** Salary for MD for the period from Apr-18 to March-19 has been waived

4.8. Accounting Standard 20 – Earnings per Share (EPS): EPS calculation in accordance with the AS-20 issued by the ICAI is as under:

2018-19 2017-18 Net proﬁ t after Tax (` In crore) -894.10 -584.87 Weighted Average – No. of Equity shares 257,971,140 206,752,598 Weighted Average – No. of Diluted Equity shares 258,504,067 208,046,949 Earnings per share – Basic (`) -34.66 -28.29 Earnings per share – Diluted (`) -34.59 -28.11

51 ANNUAL REPORT 2018 - 2019

4.9. Accounting Standard 22 – Accounting for Taxes on Income The Bank has recognized net Deferred Tax Assets as on 31st March, 2019 aggregating to `859.56 crore (PY `464.95 crore) on timing differences pertaining to surplus provision for doubtful advances, Provision for Standard Advances, Leave Encashment, Special Reserve etc in accordance with Accounting Standard – 22 on “Taxes and income” issued by the Institute of Chartered Accountants of India. The major components of DTA / DTL are furnished as under: (` in crore)

Deferred Tax Assets Deferred Tax Liabilities Deferred Tax Components 2018-19 2017-18 2018-19 2017-18 Provision for leave encashment 23.43 18.32 0.00 0.00 Depreciation on ﬁ xed assets 0.00 0.00 10.64 11.84 DTA on loss/ provision for advances 779.81 472.80 0.00 0.00 Provision for wage arrears 8.63 3.81 0.00 0.00 Provision for other assets 80.15 3.68 0.00 0.00 Special Reserve u/s 36(i)(viii) 0.00 0.00 21.82 21.82 CLOSING BALANCE 892.02 498.61 32.46 33.66 Net DTA 859.56

4.10. Intangible Assets AS 26: The Bank has followed AS 26 – Intangible asset and the guidelines issued by the RBI in this regard.

4.11. Accounting Standard 28 – Impairment of Assets: A substantial portion of the bank’s assets comprises ﬁ nancial assets to which Accounting Standard 28 is not applicable. In the opinion of the bank management, there is no impairment of other assets as at 31st March 2019 requiring recognition in terms of the said standard.

4.12 Details of movement in provisions in accordance with Accounting Standard 29: (` in crore)

Opening Provision Provisions Closing Particulars as on made during reversed / as on 01.04.2018 the year adjusted 31.03.2019 Prov. for Standard Assets 98.31 0.00 0.00 98.31 Prov. for Bad and Doubtful debts 1,169.05 878.57 262.35 1785.27 Prov. for Income Tax 404.67 0.17 0.00 404.84 Prov. for depreciation in market value of 100.45 189.58 7.04 282.99 Investments Prov. for Other assets 8.49 220.05 0.00 228.54 Counter cyclical buffer 14.71 0.00 0.00 14.71 Prov. for Interest Tax 0.10 0.00 0.00 0.10 Prov. for Fringe Beneﬁ t Tax 1.90 0.00 0.00 1.90 Prov. for Dividend (incl. Div. Tax) 0.00 0.00 0.00 0.00 Prov. for Restructured Advances & FITL 40.25 0.00 10.44 29.82 Provision for Foreign Currency Unhedged 2.03 0.00 1.21 0.82

52 ANNUAL REPORT 2018 - 2019

5. Additional Disclosures 5.1 Provisions and Contingencies: Break up of ‘Provisions & Contingencies’ shown under the head Expenditure in Proﬁ t & Loss Account (` in crore)

Particulars 2018-19 2017-18 Provision towards Standard Asset 0.00 10.91 Provision towards NPA 878.57 1302.13 Provision for depreciation in market value of Investments 189.58 53.33 Provision for Restructured Advances (Economic sacriﬁ ce) & FITL -10.44 -64.68 Provision for Foreign Currency Unhedged -1.21 -0.25 Provision for Other Assets 220.06 4.71 Sub Total 1276.56 1306.15 Provision for Income Tax (Net of deferred tax) -394.43 -365.91 Total 882.13 940.24

5.1.1. Ad-hoc Provision for wage revision pending settlement: Pending Bipartite settlement, the Bank has made an adhoc provision towards wage revision of ` 13.80 crore during the year 2018-19 and bank holds ` 24.70 crore as on 31st March 2019 towards wage revision due with effect from November 2017.

5.2 Movement of Counter Cyclical Provisioning Buffer (` in crore)

Particulars 2018-19 2017-18 (a) Opening balance in the account 14.71 14.71 (b) Provision made in the accounting year 0.00 0.00 (c) Amount of drawdown made during the accounting year 0.00 0.00 (d) Closing balance in the account 14.71 14.71

5.3 Draw Down from Reserves: A sum of ` 19.16 crore being the Rights Issue expenditure incurred in the Financial Year 2017-18 and kept in Sundry Assets account was, on approval, appropriated to Share Premium account. The QIP expenditure of ` 11.19 crore incurred during the year (2018-19) will be appropriated on approval from the share premium account.

5.4 Disclosure of complaints A. Customer Complaints:

(a) No. of complaints pending at the beginning of the year 1 (b) No. of complaints received during the year 494 (c) No. of complaints redressed during the year 494 (d) No. of complaints pending at the end of the year 1

ATM complaints through Dispute Management Systems (DMS)- NPCI (a) No. of complaints pending at the beginning of the year 22 (b) No. of complaints received during the year 4587 (c) No. of complaints redressed during the year 4550 (d) No. of complaints pending at the end of the year 59

53 ANNUAL REPORT 2018 - 2019

B. Awards passed by the Banking Ombudsman.

(a) No. of unimplemented Awards at the beginning of the year 0 (b) No. of Awards Passed by the Banking Ombudsmen during the year 0 (c) No. of Awards implemented during the year 0 (d) No. of unimplemented Awards at the end of the year 0

5.5 Disclosure of Letters of Comfort (LOCs) issued by Banks (` In crore)

Particulars Amount Letters of comfort issued in earlier years and outstanding as on 01-04-2018 61.73 Add: Letters of Comfort issued during FY 2018-19 0.00 Less: Letters of Comfort expired during FY 2018-19 55.40 Letters of Comfort Outstanding as on 31-03-2019 6.33

5.6 Provisioning Coverage ratio The provision coverage ratio of the Bank as on 31.03.2019 is 62.08%.

5.7 Bancassurance Business: Fees, remuneration received from Bancassurance business: For the year ended 31.03.2019, the bank received Gross Commission income of ` 15.56 crore from Bancassurance business, of which ` 12.26 crore was from life insurance segment and ` 3.30 crore was from general insurance segment.

5.8. Concentration of Deposits, Advances, Exposures and NPAs 5.8.1 Concentration of Deposits (` in crore)

Total Deposits of twenty largest depositors 2939.31 Percentage of Deposits of twenty largest depositors to Total Deposits of the bank 10.04%

5.8.2 Concentration of Advances (` in crore)

Total Advances to twenty largest borrowers 3019.72 Percentage of Advances to twenty largest borrowers to Total Advances of the bank 12.67%

5.8.3 Concentration of Exposures (` in crore)

Total Exposure to twenty largest borrowers/customers 3242.59 Percentage of Exposures to twenty largest borrowers/customers to Total Exposure of the bank on borrowers / 12.92% customers

5.8.4 Concentration of NPAs (` in crore)

Total Exposure to top four NPA accounts 522.02

54 ANNUAL REPORT 2018 - 2019

5.9 Sector-wise Advances (` in Crore)

2018-19 2017-18 % of Gross % of Gross Sl. NPAs NPAs Sector O/s Total O/s Total No. Gross NPA to Total Gross NPA to Total Advances Advances Advances in Advances in that Sector that Sector (A) Priority Sector Agriculture and allied 1. 3226.04 135.67 4.21% 3885.75 57.50 1.48% activities 2. Industries 1376.76 135.08 9.81% 1451.89 152.42 10.50% 3. Services 2912.05 284.48 9.77% 3348.24 226.47 6.76% 4. Personal Loans 689.12 16.24 2.36% 927.40 11.58 1.25% Sub Total (A) 8203.97 571.47 6.97% 9613.28 447.97 4.66% (B) Non Priority Sector Agriculture and allied 1. 392.69 56.41 14.37% 322.39 60.21 18.67% activities 2. Industries 3031.18 1193.50 39.37% 3986.19 1459.54 36.62% 3. Services 3966.16 612.43 15.44% 4575.49 461.02 10.08% 4. Personal Loans 4706.96 68.18 1.45% 2412.02 34.50 1.43% 5. Others 1655.00 857.00 51.78% 6095.16 230.97 3.79% Sub Total (B) 13751.99 2787.52 20.27% 17391.25 2246.24 12.92% Total (A+B) 21955.96 3358.99 15.30% 27004.53 2694.21 9.98%

5.9.1 Priority Sector Lending Certiﬁ cates (PSLCs): The Banks are required to disclose the amount of PSLCs sold/purchased (category-wise) as per RBI/2015-16/366 FIDD. CO.Plan.BC.23/ 04.09.01/2015-16 dated: April 7, 2016 and is furnished as under (` in crore ) O/S as on O/S as on SI. No. Category of PSLC 31.03.2019 31.03.2018 1 PSLC-Agriculture NIL 400 2 PSLC-SF/MF NIL NIL 3 PSLC-Micro Enterprises NIL NIL 4 PSLC-General NIL NIL Total PSLC NIL 400

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5.10 Movement of NPAs (` in crore )

Particulars 2018-19 2017-18 Gross NPAs as on 1st April (Opening Balance) 2694.21 640.19 Additions (Fresh NPAs) during the year 1412.21 2916.02 Sub-total (A) 4106.42 3556.21 Less:- (i) Upgradations 194.19 258.53 (ii) Recoveries (excluding recoveries made from upgraded accounts) 292.60 331.46 (iii) Technical / Prudential write offs 85.98 212.17 (iv) Write-offs other than those under (iii) above 174.66 59.84 Sub-total (B) 747.43 862.00 Gross NPAs as on 31st March (closing balance) (A-B) 3358.99 2694.21

5.10.1 Details of Technical write–offs and recoveries made: (` in Crore )

Particulars 2018-19 2017-18 Opening balance of Technical / Prudential written off accounts as at 1st April 550.71 393.13 Add: Technical / Prudential write offs during the year 85.98 212.17 Sub Total (A) 636.69 605.30 Less: Recoveries/ Reduction made from previously technical / prudential written – off 23.44 54.59 accounts during the year (B) Closing balance as on 31st March (A-B) 613.25 550.71

5.11 Overseas Assets, NPAs and Revenue

Particulars (` in crore) Total Assets NIL Total NPAs NIL Total Revenue NIL

5.12 Off-balance Sheet SPVs sponsored

Name of the SPV sponsored Domestic Overseas NIL NIL

56 ANNUAL REPORT 2018 - 2019

5.13 Resolution Plan implemented for Stressed Asset:- The Banks are required to disclose resolution plan implemented for stressed assets as per the RBI Circular RBI/2017-18/131, DBR No.BP.BC.1010/21.04.048/2017-18 dated 12th February 2018 and is furnished as under:- (` in crore)

Particulars No of cases Amount Resolution Plan implemented @ Nil Nil Of which, Restructure approved cases Nil Nil Of which, number of Cases with aggregate exposure of lenders is ` 1 Billion and above where Independent Credit evaluation (ICE) of the Residual debt is required by Credit Nil Nil Rating Agencies (CRA) Of which, Number of cases with exposure Rs 5 Billion and above where 2 such Independent Nil Nil Credit evaluation (ICE) is required by CRA @ The details furnished above excludes the borrower entities in respect of which speciﬁ c instructions have already been issued by Reserve Bank of India to the banks for reference under IBC

5.13.1 Acquisition of Non-SLR securities due to conversion of debt during Restructuring process:- As per RBI Circular RBI/2017-18/131, DBR No.BP.BC.1010/21.04.048/2017-18 dated 12th February 2018, disclosure is made as under:- Bank has acquired and held shares/debentures for an amount of ` 116.16 crore by way of conversion of debt to equity during various restructuring process implemented by the bank. This amount is not considered for the calculation of regulatory ceilings/ restrictions on Capital Market Exposures, Investment in Para Banking activities and intra-Group exposure. However, there is no implication on compliance of the provisions of Section 19(2) of the Banking Regulation Act.1949.

5.13.2 Revised framework for resolution of stressed assets. The Reserve Bank of India vide its circular dated February 12, 2018 issued a revised framework for resolution of stressed assets, which superseded the existing guidelines on SDR, S4A etc., with immediate effect. Accordingly, the Bank has revoked the stand-still benefi ts for accounts where any of these schemes had been invoked but not yet implemented and classifi ed them as per the extant RBI Guidelines on Income Recognition and Asset Classifi cation, as given hereunder

5.13.3 Disclosures on Flexible Structuring of Existing Loans (` in crore) Exposure weighted average Amount of loans taken up for No. of borrowers duration of loans taken up for fl exible structuring taken up fl exible structuring Period for fl exibly Before applying After applying Classifi ed as Classifi ed as structuring fl exible fl exible Standard NPA structuring structuring 2018-19 NIL NIL NIL NIL NIL

2017-18 1 NIL 36.00 5 years 25 years

5.13.4 Disclosures on Strategic Debt Restructuring Scheme: (` in crore) Amount outstanding as Amount outstanding as on the reporting date with on the reporting date with No. of Amount outstanding as on respect to accounts where respect to accounts where accounts the reporting date Period where SDR conversion of debt to equi- conversion of debt to equi- has been ty is pending ty has taken place invoked Classifi ed as Classifi ed as Classifi ed as Classifi ed as Classifi ed as Classifi ed as standard NPA standard NPA standard NPA 2018-19 5 NIL 269.55 NIL NIL NIL 269.55 2017-18 5 Nil 261.50 Nil Nil Nil 261.50

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5.13.5 Disclosures on Change in Ownership outside SDR Scheme: (` In crore) Amount outstanding Amount outstanding as Amount outstanding as as on the reporting on the reporting date on the reporting date No. of date with respect Amount outstanding as with respect to accounts with respect to accounts accounts to accounts where on the reporting date where conversion of debt where conversion of debt where banks change in ownership is 31.03.2019 to equity / invocation of to equity / invocation of have decided envisaged by issuance pledge of equity shares pledge of equity shares to effect of fresh shares or sale of is pending has taken place change in promoters equity ownership Classifi ed Classifi ed Classifi ed Classifi ed Classifi ed Classifi ed as Classifi ed Classifi ed as as as Standard as NPA as NPA Standard as NPA as NPA Standard Standard Nil

5.13.6 Disclosures on Change in Ownership of Projects Under Implementation:

No. of project loan accounts Amount outstanding as on the reporting date where banks have decided to Classifi ed as standard Classifi ed as standard Classifi ed as NPA effect change in ownership restructured Nil

5.13.7 Disclosures on the scheme for Sustainable Structuring of Stressed assets (S4A) (` in crore)

No. of accounts where S4A Aggregate amount Amount outstanding Provision Period has been applied outstanding Part A Part B Held Classifi ed as Standard NIL NIL NIL NIL 2018-19 Classifi ed as NPA 25.66 14.00 11.66 12.01 Classifi ed as Standard 25.70 14.04 11.66 5.14 2017-18 Classifi ed as NPA NIL NIL NIL NIL

5.13.8 Micro, Small and Medium Enterprises (MSME) Sector – Restructuring of Advances The disclosure required to be made as per RBI Circular RBI/2018-19 /100 .DBR. No. BP. BC. 18/ 21.04.048/2018-19 dated 01st January 2019, is as under:-

No. of Accounts Restructured Amount (in Crore) NIL

58 ANNUAL REPORT 2018 - 2019

5.14 Disclosure on Remuneration: a. Qualitative disclosures: The composition of the Nomination Remuneration Information relating to the composition and mandate of the and Compensation Committee of the Board as on (a) Remuneration Committee. 31st March 2019 is 4 directors. The Committee is constituted as per regulatory requirements Information relating to the design and structure of remuneration (b) processes and the key features and objectives of remuneration policy. Description of the ways in which current and future risks are taken into The latest compensation policy was approved by (c) account in the remuneration processes. It should include the nature the Nomination Remuneration and Compensation and type of the key measures used to take account of these risks. Committee of the Board on 25th March 2019. Description of the ways in which the bank seeks to link performance (d) Performance is evaluated based on Key during a performance measurement period with level of remuneration. Performance Indicators as approved by the Board. A discussion of the bank’s policy on deferral and vesting of variable (e) remuneration and a discussion of the bank’s policy and criteria for adjusting deferred remuneration before vesting and after vesting Description of the different forms of variable remuneration (i.e. cash, ESOS and Performance Incentives are the (f) shares, ESOPs and other forms) that the bank utilizes and the rationale components of variable remuneration. for using these different forms.

b. Quantitative disclosures:

Particulars 2018-19 2017-18 (g) Number of meeting held by the Meeting of the Nomination, Meeting of the Nomination, remuneration committee during the Remuneration and Compensation Remuneration and Compensation fi nancial year and remuneration paid Committee of the Board (NRCCB) Committee of the Board (NRCCB) its members was held 5 times during FY 2018-19 was held 6 times during FY 2017-18 and the total remuneration paid to the and the total remuneration paid to the committee members in the form of committee members in the form of sitting fees is ` 0.07 crore. sitting fees is `0.08 crore. (h) (i) Number of employees having `0.12 crore to one person. received a variable remuneration NIL award during the fi nancial year. (ii) Number and total amount sign-on NIL NIL awards made during the fi nancial year. (iii) a. Details of guaranteed bonus, if NIL any, paid as joining / Sign on NIL bonus. b. Details of performance Bonus/ NIL NIL Allowance (iv) Details of severance pay, in NIL NIL addition to accrued benefi ts, if any. (i) (i) Total amount of outstanding deferred NIL NIL remuneration, split into cash, shares and shares –linked instruments and other forms. (ii) Total amount of deferred remuneration NIL NIL paid out in the fi nancial year. Breakdown of amount remuneration No risks takers were paid variable one person. (j) awards for the fi nancial year to show pay. No deferred and non-deferred fi xed and variable, deferred and non- remuneration. deferred.

59 ANNUAL REPORT 2018 - 2019

Particulars 2018-19 2017-18 (k) (i) Total amount of outstanding NIL NIL deferred remuneration and retained remuneration exposed to ex-post explicit and/or implicit adjustments. (ii) Total amount of reductions during NIL NIL the ﬁ nancial year due to ex-post explicit adjustments. (iii) Total amount of reductions during NIL NIL the ﬁ nancial year due to ex-post implicit adjustments.

5.15 Disclosures relating to securitization: NA

5.16 Credit Default Swaps: NIL

5.17 Intra – Group Exposure: (` In crore)

Particulars FY2018-19 (a) Total amount of intra-group exposures (b) Total amount of top-20 intra-group exposures NIL (c) Percentage of intra-group exposures to total exposure of the bank on borrowers / customers (d) Details of breach of limits on intra-group exposures and regulatory action thereon, if any.

5.18 Transfer to Depositors Education and Awareness Fund (DEAF): (` In crore)

Particulars FY2018-19 FY2017-18 Opening balance of amounts transferred to DEAF 42.62 23.14 Add: Amounts Transferred to DEAF during the year 15.97 20.83 Less: Amounts reimbursed by DEAF towards claims 1.01 1.35 Closing balance of amounts transferred to DEAF 57.58 42.62

5.19 Unhedged foreign Currency Exposure: Based on the declaration received from borrowers, the bank has estimated and provided towards the liability for Unhedged Foreign Currency Exposure (UFCE) of their constituents in terms of RBI Circular No. BDOD.NO.BP.BC.85/21.06.200/2013-14 dated 15th January 2014 and the total provision held as of 31st March 2019 is `0.82 crore.

5.20. Details of Frauds occurred and Provision made during the year As per RBI Circular No.DBR. No. BP.BC.92/21.04.048/2015-16 dated April 18, 2016 required details are furnished:

(a) Number of Fraud cases reported during the year 82 (b) Amount involved (` In crore) 195.61 (c) Quantum of Provision made, net of recoveries 180.53 (d) Quantum of unamortized Provision debited from ‘Other Reserves’ (` In crore) NA

60 ANNUAL REPORT 2018 - 2019

6.1 Liquidity Coverage Ratio: (` In crore)

2018-19 2017-18 Total Total Total Weighted Total Weighted Unweighted Unweighted Value Value Value Value (Average) (Average) (Average) (Average) High Quality Liquid Assets 1. Total High Quality Liquid Assets (HQLA) 6399.76 3995.87 Cash Outfl ows Retail deposits and deposits from small 2 17882.23 1620.61 4950.85 402.11 business customers, of which (i) Stable Deposits 3352.33 167.62 1859.57 92.98 (ii) Less stable Deposits 14529.90 1452.99 3091.28 309.13 3 Unsecured wholesale funding, of which: 5139.48 1685.22 2757.18 664.00 (i) Operational deposits (all counterparties) 0014.68 3.67 Non-operational deposits (all (ii) 5139.48 1685.22 2742.51 660.33 counterparties) (iii) Unsecured debt 000.00 0.00 4 Secured Wholesale funding 1189.89 19.52 2796.41 0.00 5. Additional requirements, of which 15947.00 1140.87 19825.36 1239.72 Outfl ows related to derivative exposures (i) 16.63 16.63 6.38 6.38 and other collateral requirements Outfl ows related to loss of funding on (ii) 000.00 0.00 debt products (iii) Credit and Liquidity facilities 16.42 5.92 720.16 130.84 6 Other contractual funding obligations 383.72 383.72 200.87 200.87 7 Other contingent funding obligations 15530.22 734.60 18897.95 901.62 8 Total Cash Outfl ows 40158.59 4466.22 30329.81 2305.83 Cash Infl ows 9 Secured lending (e.g. reverse repos) 99.03 0 57.94 0.00 10 Infl ows from fully performing exposures 1102.71 551.35 1713.00 856.50 11 Other cash infl ows 53.48 53.48 76.99 41.70 12 Total Cash Infl ows 1255.21 604.83 1847.93 898.20

21 TOTAL HQLA 6399.76 3995.87 22 Total Net Cash Outﬂ ows 3860.10 1495.90 23 Liquidity Coverage Ratio (%) 165.79 267.12

6.1.1 Amalgamation IHFL and LVB The Board at its meeting held on April 5, 2019 had approved the scheme of amalgamation between Indiabulls Housing Finance Limited (IHFL) and The Lakshmi Vilas Bank Limited (LVB). In furtherance, the Board at its meeting on May 3, 2019 had approved amendments to effect merger of IHFL and its wholly owned subsidiary, Indiabulls Commercial Credit Ltd., (ICCL) into and with LVB under sections 230 to 232 and other applicable provisions of the Companies Act 2013, as amended, Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, as amended, and other rules and regulations framed thereunder. The Scheme is subject to the receipt of approval from the Reserve Bank of India, Other Regulatory approvals and all other applicable compliances.

61 ANNUAL REPORT 2018 - 2019

6.1.2 Dispensation for GST registered MSMEs RBI circular DBR.No.BP.BC.108/21.04.048/2017-18 dated June6, 2018 permitted banks to continue the exposures to MSME borrowers to be classiﬁ ed as standard assets where the dues between September 1, 2017 and December 31, 2018 are paid not later than 180 days from their respective original due dates. Accordingly, the bank has retained advance of ` 58.86 crore as standard as at March 31, 2019. In accordance with the provisions of the circular, the bank had not recognised the unrealised interest income of ` 2.20 crore.

6.1.3 Disclosure under IBC As per RBI Circular No. DBR.No.BO.15199/21.04.048/2016-17 dated June 23, 2017, for the accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), the bank is holding total provision of ` 184.28 crore (` 241.52 crore as at March 31, 2018).

6.2 Qualitative disclosure around LCR Based on RBI guidelines issued during June, 2014 and also other circulars subsequently thereon, the Bank has been computing the Liquidity Coverage Ratio with effective from 01st January, 2015. As per these guidelines, the Bank has high quality liquid assets (HQLA) into Level 1 and Level 2A/2B. As on 31.03.2019, the Bank has ` 6740.14 Cr of HQLAs, of which, the main contribution is from Level – 1 type of assets with ` 6491.04 Cr. The Level – 1 asset are in the form of surplus SLR investments / Excess CRR and Cash in Hand. As on 31.03.2019, after applying the respective haircuts as mentioned by RBI guidelines on LCR, the Bank has total amount of ` 4542.18 Cr of cash outfl ows and ` 613.47 Cr of cash infl ows over the next 30 days period. Of this total amount of ` 4542.18 Cr of cash outfl ows, the major component is in the form of Retail deposits and Unsecure Wholesale Funding and of the total ` 613.47 Cr of cash infl ows, the major cash infl ows are in the form of amounts to be received from Retail and small business counterparties and Non – Financial wholesale counterparties.

7. The disputed income tax demand outstanding as on 31.03.2019 amounts to ` 336.66 crore (PY: ` 94.61 crore) and service tax liability of ` 11.12 crore (PY: ` 11.24 Crore). No provision is considered necessary in respect of the disputed liabilities in view of the favourable decisions by various appellate authorities on similar issues. Provision for Income Tax in the current year is made as per Income Computation Disclosures Standards (ICDS) after considering various judicial decisions on certain disputed issues.

8. In the matter of suit fi led against the bank by M/s Religare Finvest Ltd., for adjustment of their deposits to the dues of M/s. RHC Holding Pvt. Ltd & M/s.Ranchem Pvt Ltd., as reported in the previous year, it is being defended appropriately by the Bank and the matter still remains sub-judice. In the process of adjustment of the above mentioned deposits, there was an observation by statutory auditor for the FY 2017-18 of a resultant shortfall in the maintenance of CRR for a short period. As the shortfall was notional, the matter was referred to RBI and RBI vide their letter ref. DBR.CO.No.2438/12.07.42/2018-19 dated 21.09.2018 has advised that the matter has been examined and have decided not to impose penal interest in the matter. 9. Previous year’s fi gures have been regrouped / reclassifi ed wherever considered necessary to conform to the current year’s classifi cation.

As per our Report of even date attached For M/s. P.CHANDRASEKAR LLP B.K. MANJUNATH Y.N. LAKSHMINARAYANA MURTHY Chartered Accountants Chairman KUSUMA R MUNIRAJU (FRN - 000580S/S200066) ANURADHA PRADEEP PARTHASARATHI MUKHERJEE Managing Director & CEO G.SUDHAKARA GUPTA LAKSHMY CHANDRASEKARAN H.S.UPENDRA KAMATH Partner Membership No. 028508 S. SUNDAR N.SAIPRASAD Chief Financial Ofﬁ cer SUVENDU PATI

Bangalore N. RAMANATHAN RAJNISH KUMAR 28th May, 2019 Company Secretary Directors

62 ANNUAL REPORT 2018 - 2019

DISCLOSURE UNDER PILLAR III OF BASEL III NORMS AS ON 31.03.2019 I. SCOPE OF APPLICATION AND CAPITAL ADEQUACY Table DF - 1 Scope of Application Lakshmi Vilas Bank is a private sector bank incorporated in the year 1926 at Karur. The bank doesn’t have any subsidiaries under its Management. Hence the CRAR is computed on standalone basis only. Qualitative Disclosures: List of group entities considered for consolidation. List of group entities not considered for consolidation both under the accounting and regulatory scope of consolidation. No Group afﬁ liation

Quantitative Disclosures: List of group entities considered for consolidation Not applicable The aggregate amount of capital deﬁ ciencies in all subsidiaries which are not included in the regulatory scope of consolidation i.e. that are deducted: Not applicable The aggregate amounts (e.g. current book value) of the bank’s total interests in insurance entities, which are risk-weighted: Not applicable Any restrictions or impediments on transfer of funds or regulatory capital within the banking group: Not applicable

Table DF - 2 Capital Adequacy Qualitative Disclosures: A summary discussion of the bank’s approach for assessing the adequacy of its capital to support current and future activities. As per Basel III guidelines, the Bank is required to maintain a minimum Capital to Risk Weighted Assets Ratio (CRAR) of 10.875%. The given minimum capital requirement includes capital conservative buffer of 1.875%. The total capital to Risk Weighted Assets Ratio (CRAR) as per Basel III guidelines works to 7.72% as on 31.03.2019 (As against the minimum regulatory requirement of 10.875%). The tier I CRAR stood at 5.72%. Quantitative Disclosures: Particulars Number of Equity Shares Face Value Per share Amount in lakhs Authorized Capital 50,00,00,000 10.00 50000.00 Issued Capital 32,19,21,756 10.00 32192.18 Subscribed Capital 31,99,03,230 10.00 31990.32 Called up/paid up Capital 31,99,03,230 10.00 31990.32 The Bank’s shares are listed on the National Stock Exchange Limited (NSE) and Bombay Stock Exchange Limited (BSE). During the ﬁ nancial year 2018-19, the bank has raised Capital funds of `46049 lakhs. Break up of capital funds: (` in lakhs) A. Tier I Capital Elements 1. Paid up capital 31990.32 2. Reserves and surplus 146553.86 3. Gross Tier I Capital 178544.18 4. Less (Intangible Assets) including DTA adjustments 75838.82 5. Net Tier I Capital 102705.37

63 ANNUAL REPORT 2018 - 2019

B. Tier II Capital Elements 1. General Provisions and Loan loss Reserve 9846.78 2. Subordinated Debt (Lower Tier II bonds) 30710.00 3. Provision for restructured advances 201.27 4. Provision for unhedged foreign currency exposure 82.11 5. Gross Tier II capital 40840.16 6. Less (Cross holdings) 1000.00 7. Net Tier II Capital 39840.16

Break up of Capital Requirements: (` in lakhs)

Risk Type b) Capital requirements for Credit Risk 158801.84 Portfolios subject to standardized approach Cash & Bank 1052.58 Loans and Advances 139748.26 Fixed Assets 4697.94 Other Assets 7068.34 Off Balance sheet Exposure 6234.72 c) Capital requirements for Market Risk 16120.31 Standardized Duration approach Interest Rate Risk (Including swaps) 11461.36 Contracts / (Including Forex Open Position) 1066.86 Equity Risk 3592.09 d) Capital requirements for Operational Risk 20357.05 Basic Indicator approach 20357.05 Total Risk weight Assets (b+c+d)*100/10.875 1795670.93 Total Eligible Capital Funds for CRAR 138618.79 CRAR (Basel III) 7.72% e) Common Equity Tier 1, Tier I and Total Capital ratios:

Common Equity Tier I - CRAR 7.72% Tier I CRAR 5.72% Total CRAR 2.00%

For the top consolidated group; and for signiﬁ cant bank subsidiaries - Not applicable

II. Risk Exposure and Assessment General Qualitative Disclosure requirement: The robustness of risk management framework of the Bank is being achieved mainly from identiﬁ cation/ assessment/ measurement and monitoring of various risks and managing on a continuous basis. The Bank strives to update the practices, policies and process involving risk by benchmarking itself to the best practices in risk management. Accordingly steps are being planned into the future under guidance of the Board.

64 ANNUAL REPORT 2018 - 2019

The Bank has in place a Risk Management Committee of the Board of Directors, basis the regulatory requirement for listed entities. The Board is responsible for framing, implementing and monitoring of Risk Management framework in the bank. For operational convenience, it has delegated its powers to various committees as shown below:

Board of Directors

Risk Management Committee of Board

Asset Liability Credit Risk Operational Risk Management Committee Management Committee Management Committee

Risk Department

The risk management processes are guided by well-deﬁ ned policies appropriate for various risk categories viz., credit risk, market risk, and operational risk as per the respective regulatory and business requirements. Various policies such as Investment policy, Forex policy, ALM policy, Stress testing policy, Credit Risk Management Policy have been put in place to measure; mitigate the various risks with acceptable levels. The Bank has laid down Stress Testing policy to measure impact of adverse stress scenarios on the adequacy of capital and proﬁ t.

Organization Structure of Risk Department The Risk Department is headed by Chief Risk Ofﬁ cer who reports to the Managing Director and CEO of the Bank. The activities of the Risk Department are being overseen by the Risk Management Committee of the Board. The Department has separate team for individual areas of risk.

Credit Risk: Credit risk is the risk of ﬁ nancial loss if a client, issuer of securities that the Bank holds or any other counterparty fails to meet its contractual obligations. Credit Risk arises from all transactions that give rise to actual, contingent or potential claims against any counterparty, borrower or obligor. The goal of credit risk management is to achieve reasonable levels of risk acceptable on the credit portfolio and generate risk-adjusted return on capital, targeted portfolio asset quality and management of the credit risk inherent in individual exposures as well as at the portfolio level. The emphasis is placed both on evaluation and management of risk at the individual exposures and analysis of the portfolio behavior.

Credit Risk Management policy: A comprehensive Credit risk management policy is put in place and the same has been approved by Board. The Credit risk strategy of the bank is based on Risk appetite and risk-return profi le and it is being reviewed yearly in CRM policy. The strategy of the bank shall provide continuity in approach considering cyclical approach of the economy and the resulting shifts in the composition and quality of the overall credit portfolio. It shall also include a statement of the banks willingness to grant credit based on exposure type (for example, commercial, consumer, real estate,etc.,), economic sector (e.g. textile, iron etc.), geographical location, currency, maturity, anticipated profi tability, identifi cation of target markets / business sectors (like priority sector lending) and the overall credit portfolio composition.

Credit sanction and approval processes: The Bank has put in place a structured credit approval process, including a well-established procedure of comprehensive credit appraisal. Every extension of credit facility or material change of a credit facility to any counterparty requires credit approval at the

65 ANNUAL REPORT 2018 - 2019

appropriate authority level. The Bank has a multi-tier structure for sanction of credit proposals, with in delegation of lending powers at various levels of ofﬁ cers & executives, duly approved by Board. The powers vested at each level depend on the quantum and type of the loan facility, Credit rating of the borrower and the overall exposure to the borrower/group.

Credit Rating System: Internal risk rating remains the foundation of the credit assessment process, providing standardization and objectivity to the process. All sanctioning processes including the delegation of powers are linked to the ratings and the sizes of the exposure. The monitoring frequency applicable to the exposure also depends on the rating of the exposure. Individual borrower exposure ceilings linked to the internal rating and sector speciﬁ c caps are laid down in the Credit policy to avoid concentration risk. Both credit and market risk expertise are combined to manage risks arising out of traded credit products such as bonds and market benchmarking related lending transactions. Key sectors are analyzed in detail to suggest strategies for business, considering both risks and opportunities. Such analysis is reviewed by the Credit Risk Management Committee/ RMC B / Various Credit Sanctioning Committees to arrive at the appropriate industry ceilings as well as deﬁ ne the origination and account management strategy for the sector. The Risk Management Committee of the Board periodically reviews the impact of the plausible stress scenarios covering inter alia increased regulatory prescriptions on provisioning requirements, rating downgrades, or drop in the asset values in case of secured exposures etc. on the portfolio. With a view to improve the credit quality, the approval of internal rating is now vested with Risk Department. During the year bank has also put in place a revised internal credit rating system from a reputed agency.

Credit review and monitoring: Bank has a dedicated monitoring department which looks after review and monitoring of bank’s credit portfolio. The Bank has a system under which the lending powers exercised by delegated authority are reported to and reviewed by a higher authority under the Internal Loan Review Mechanism. The Pre-disbursement and post-disbursement processes have also been signiﬁ cantly improved through standardization and Centralization.

Market Risk: Market risk is the risk of losses in ‘on and off-balance sheet’ positions arising from the movements in market price as well as the volatilities of those changes, which may impact the Bank’s earnings and capital. The risk may pertain to interest rate related instruments (Interest rate risk), equities (equity price risk) and foreign exchange rate risk (currency risk). Market Risk for the Bank emanates from its trading and investment activities, which are undertaken both for the customers and on a proprietary basis. The Bank adopts a comprehensive approach to market risk management for its banking book as well as its trading book for its operations. The market risk management framework of the Bank provides necessary inputs regarding the extent of market risk exposures, the performance of portfolios vis-a- vis the market risk limits and comparable benchmarks, which provides guidance to the business in optimizing the risk-adjusted rate of return of the Bank’s trading and investment portfolio. Market risk management is guided by well laid down policies, guidelines, processes and systems for the identiﬁ cation, measurement, monitoring and reporting of exposures against various risk limits set in accordance with the risk appetite of the Bank. Treasury Mid-ofﬁ ce independently monitors the Bank’s investment and trading portfolio in terms of risk limits stipulated in the Market Risk Management. The bank is also investing in better systems to address operational and IT risks and help improve monitoring of market risk.

Operational Risk Operational risks may emanate from inadequate and/or missing controls in internal processes, people and systems or from external events or a combination of all the four. The Bank has in place an Operational Risk Management (ORM) Policy to manage the operational risk in an effective, efﬁ cient and proactive manner. The policy aims at assessing and measuring the magnitude of risks, monitoring and mitigating them through well-deﬁ ned framework and governance structure. The RMC at the apex level is the policy making body and is supported by the Operational Risk Management Committee (ORMC) responsible for the implementation of the Operational Risk framework of the Bank and the management of operational risks across the Bank. All new products and processes, as well as changes in existing products and processes are subjected to risk evaluation by the Bank’s Product and Change Management Committee. Outsourcing arrangements are examined and approved by the Outsourcing Committee

66 ANNUAL REPORT 2018 - 2019

of the Bank. The IT Systems and Security Committee/ Cyber Risk Committee of the Bank provide directions for mitigating operational risk in the information systems/ cyber issues. Comprehensive frameworks and processes help the Bank in managing and mitigating such risks. The Bank has set up a comprehensive Operational Risk Management / Measurement System for identifying, documenting, assessing, measuring and periodic monitoring of various risks and controls linked to various processes. The Business Continuity Management Committee (BCMC) exercises oversight on the implementation of the approved Business Continuity plan (BCP) framework, which has been put in place to ensure continuity of service for its customer base. Further, the bank continuously examines its risk governance framework, the risk management practices, availability of adequate resources, appropriate systems and continuously strives to improve all these aspects. For example- Ensuring a strong set of experienced and skilled ofﬁ cials in Risk, strengthening the risk management at its Regions, acquiring improvised risk systems and continuously improving risk processes/ tools to be able to have the best of risk management practices in the globe.

Interest Rate Risk in Banking Book Interest Rate Risk is measured in two different ways. Earnings perspective using Traditional Gap Analysis is to assess the impact of adverse movement in interest rate on the Net Interest Income (Earnings at Risk) and economic value perspective using Duration Gap Analysis to assess the impact of adverse movement in interest rate on the market value of Bank’s equity. ALM policy will manage and monitor the limits / guidance values / target set on interest rate risk of the Banking Book. RMC-B and ALCO at the executive level are responsible for efﬁ cient and effective management of Interest rate risk in Banks business.

Scope and nature of risk reporting / measurement systems The Duration/ Modifi ed duration mainly depends on coupon, maturity and periodicity of payment of installments. Since the modifi ed duration of the liabilities is less compared to the modifi ed duration of assets, there would be fall in the equity value under major stress. Modifi ed duration of Equity is calculated on a quarterly basis. The Stress loss for Interest rate risk in banking book is assessed based on drop in the Market value of equity under 200 bps changes in interest rate. The results of Traditional Gap analysis and Duration Gap analysis including the adherence to tolerance limit set in this regard like , Buckets, Dynamic Liquidity, LCR, Bulk deposit, Retail term deposits are monitored and the same has been placed before ALCO/RMC-B level.

Liquidity Risk Liquidity is a bank’s capacity to fund increase in assets and meet both expected and unexpected cash and collateral obligations at reasonable cost and without incurring unacceptable losses. Liquidity risk is the inability of a bank to meet such obligations as they become due, without adversely affecting the bank’s ﬁ nancial condition. The Asset Liability Management policy of the Bank stipulates a broad framework for liquidity risk management to ensure that the Bank is in a position to meet its liquidity obligations as well as to withstand a period of liquidity stress from bank-level factors, market-wide factors or a combination of both. The liquidity proﬁ le of the Bank is monitored on a static as well as on a dynamic basis by using the gap analysis technique supplemented by monitoring of key liquidity ratios and conduct of liquidity stress tests periodically. The Bank has integrated into the asset liability management framework, the liquidity risk management guidelines issued by RBI pursuant to the Basel III framework on liquidity standards. The Bank maintains the regulatory mandated LCR as per the transitional arrangement laid down by RBI and also ensures adherence to RBI guidelines on monitoring and management of liquidity including liquidity ratios.

TABLE DF - 3 Credit Risk Credit Risk: General Disclosures Qualitative Disclosures The general qualitative disclosure requirement with respect to credit risk, Includes the deﬁ nitions of Past Due, NPA of a loan or a advance and impaired assets (For Accounting Purposes), Out of order and Overdue. These deﬁ nitions are as per the extant guidelines of Reserve Bank of India.

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Credit Risk Credit risk in simple terms is the potential that bank’s borrower or counterparty will fail to meet its obligations in accordance with agreed terms. Credit risk is deﬁ ned as the possibility of losses associated with default in repayment or diminution in the credit quality of borrowers or counterparties or diminution in the value of primary and/or collateral assets. In a bank’s portfolio, losses stem from outright default due to inability or unwillingness of a customer or counterparty to meet commitments in relation to lending, trading, settlement and other ﬁ nancial transactions.

Discussion of the Bank’s Credit risk management policy The Board level approved Credit Risk Management Policy is put in place. The goal of the policy is to ensure that it is within the acceptable risk appetite and tolerance limit set by the bank. It manages the credit risk inherent in the entire portfolio as well as the risk in individual credits or transactions and it encompasses identiﬁ cation, measurement, monitoring and control of the credit risk exposures. Further it deals the structure, governance, framework, and processes for effective and efﬁ cient management of the Credit risk.

Quantitative Disclosures Credit Exposure:-

Credit Risk Exposures (` In lakhs) Fund Based * 2260241.57 Non Fund Based ** 188293.78 Total Fund & Non Fund Based 2448535.35

* It excludes ﬁ xed assets, other assets, cash, bank balances, balance with RBI and investments under HTM category. ** Exposure without revaluation.

Geographic wise Distribution of Exposures:- (` in lakhs)

State Name Funded Exposure Non Funded Exposure Total Exposure Andhra Pradesh 144059.09 3251.29 147310.38 Chandigarh 23.73 0.00 23.73 Chaattisgarh 4629.76 280.72 4910.49 Gujarat 31247.41 3935.45 35182.86 Haryana 7744.84 1398.86 9143.71 Jharkhand 3072.93 0.00 3072.93 Karnataka 263233.83 10314.55 273548.38 Kerala 136637.50 80.05 136717.55 Madhya Pradesh 3975.74 27.00 4002.74 Maharashtra 505962.02 23290.28 529252.30 Delhi 79383.13 39596.94 118980.07 Odisha 4632.91 13.05 4645.96 Puducherry 9189.23 454.31 9643.54 Punjab 7.16 0.00 7.16 Rajasthan 4120.91 70.00 4190.91 Tamilnadu 824199.39 81372.19 905571.58 Telangana 150702.81 19225.05 169927.86 Uttar Pradesh 665.38 21.35 686.73 West Bengal 86753.78 4962.69 91716.47 Total 2260241.57 188293.78 2448535.35

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Industry Wise distribution of Exposures:- (` in lakhs)

S. Funded Non Funded Total % to total Industry Name No. exposure Exposure Exposure Exposure 1 All Engineering 24891.26 7275.97 32167.23 1.31 2 Basic Metal and Metal Products 79988.36 960.41 80948.77 3.31 3 Beverages (excluding Tea & Coffee) and Tobacco 26871.65 1023.00 27894.65 1.14 4 Cement and Cement Products 3463.21 203.83 3667.05 0.15 5 Chemicals and Chemical Products 12404.89 245.13 12650.02 0.52 (Dyes, Paints, etc.) 6 Construction 2092.62 0.00 2092.62 0.09 7 Food Processing 14107.44 7491.72 21599.16 0.88 8 Gems and Jewellery 7489.57 328.00 7817.57 0.32 9 Glass & Glassware 2999.23 5.67 3004.90 0.12 10 Infrastructure 129425.91 27788.49 157214.40 6.42 11 Leather and Leather products 363.20 0.00 363.20 0.01 12 Mining and Quarrying 7262.15 2927.99 10190.14 0.42 13 Paper and Paper Products 6881.88 69.66 6951.53 0.28 14 Petroleum (non-infra), Coal Products (non-mining) 859.32 240.22 1099.54 0.04 and Nuclear Fuels 15 Rubber, Plastic and their Products 21296.94 11.74 21308.68 0.87 16 Textiles 106045.64 4912.66 110958.29 4.53 17 Vehicles, Vehicle Parts and Transport Equipment’s 5885.69 9.54 5895.23 0.24 18 Wood and Wood Products 10057.31 7400.18 17457.49 0.71 Other industries 31114.83 196.39 31311.23 1.28 Residual Advances 1766740.47 127203.18 1893943.65 77.35 Total Exposure 2260241.57 188293.78 2448535.35 Note: The industries break-up given on the same lines as prescribed for DSB returns. Residual advances are educational loans, Housing loans, Gold loans, Loan against deposits, Personal loan, staff loan, consumer loans, vehicle loans, etc., The Industries which has crossed 5% of gross credit exposure are: a) Infrastructure - 6.42% Residual maturity breakup of assets (` in lakhs)

Balance Balance Invest- Repo- Treps Fixed Other Bucket Cash with Other Advances with RBI ments Asset Lending Assets Assets Banks Overdue to Day 1 33337.55 2024.20 4495.31 173548.11 0.00 0.00 12826.55 0.00 14852.49 2-7 Days 0.00 3177.37 0.00 22926.51 24900.00 7496.00 72695.27 0.00 522.86 8-14 Days 0.00 4112.06 0.00 17775.57 0.00 0.00 84749.74 0.00 608.96 15-30 Days 0.00 2908.77 0.00 12573.99 0.00 0.00 108956.86 0.00 2385.05 31-60 Days 0.00 4718.04 0.00 20895.07 0.00 0.00 192793.78 0.00 2695.71 61-90 Days 0.00 2756.55 0.00 15340.40 0.00 0.00 184114.78 0.00 2695.71 3-6 Months 0.00 7558.67 0.00 35865.87 0.00 0.00 34737.20 0.00 7827.28 6 Months-1 Year 0.00 16051.87 0.00 82598.01 0.00 0.00 110969.03 0.00 0.00 1-3 Years 0.00 53903.75 58.00 264723.55 0.00 0.00 843057.93 0.00 115330.66 3-5 Years 0.00 4026.15 0.00 49065.77 0.00 0.00 128088.70 0.00 0.00 Over 5 Years 0.00 30832.22 26.62 161273.21 0.00 0.00 239705.65 46995.43 93016.19 Total 33337.55 132069.66 4579.93 856586.05 24900.00 7496.00 2012695.49 46995.43 239934.93

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Asset Quality (` in lakhs) Amount of Non-Performing Assets (Gross) 335899.36 Substandard 93987.22 Doubtful – 1 93751.71 Doubtful – 2 104357.64 Doubtful – 3 14849.18 Loss 28953.61 Net NPA 150629.49 Gross NPA to gross advances (%) 15.30% Net NPAs to Net advances (%) 7.49% Movement of NPAs (Gross) Opening Balance 269421.15 Additions during the period 141235.92 Reductions 74757.71 Closing Balance 335899.36

Movement of Provisions (` in lakhs) Speciﬁ c Provision Opening Balance 116905.09 Provisions made during the period 99563.07 Write off /Write back of excess provisions 37941.50 Any other adjustments, including transfers between provisions 0.00 Closing balance 178526.66

Details of write offs and recoveries that have been booked directly to the Income statement (` in lakhs) Write offs that have been booked directly to the income statement 2222.32 Recoveries that have been booked directly to the income statement 4558.07

Investments (` in lakhs) Amount of Non Performing Investments 17819.58 Amount of provisions held for non-performing investments 13578.24 Movement of provisions for depreciation on Investments Opening Balance 10045.10 Provisions made during the period ( April 2018 to March 2019) 18958.34 Write-off/Write – back of excess provisions 704.04 Closing Balance 28299.40

Major Industry break up of NPA (` in lakhs) Industry Gross NPA Speciﬁ c Provision Infrastructure 61140.45 39178.58 Basic Metal and Metal Products 38500.67 24502.52 Textiles 17804.19 4948.33 All Engineering 6316.59 1847.81 Beverages (excluding Tea & Coffee) and Tobacco 4734.05 1049.15 Total 128495.95 71526.39

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Geographic wise Distribution of NPA and Provision (` in lakhs) Geography Gross NPA Speciﬁ c Provision Domestic 335899.36 178526.66 Overseas - - Total 335899.36 178526.66

Table DF - 4 Credit Risk: Credit Risk : Disclosures for Portfolios Subject to the Standardized Approach a) For exposure amounts after risk mitigation subject to the standardized approach, amount of a bank’s outstanding (rated and unrated) in the following three major risk buckets as well as those that are deducted: < 100% Risk Weight 100% Risk Weight > 100% Risk Weight Grand Total Particulars BV** RWA** BV RWA BV RWA BV RWA Fund Based Loans & Advances 1448136.47 518350.95 482383.69 383246.11 265076.13 383444.43 2195596.29 1285041.49 Investments 607363.08 0.00 0.00 0.00 0.00 0.00 607363.08 0.00 Other Assets* 358193.42 37071.09 46995.43 43199.46 15042.12 37604.11 420230.97 117874.66 Exposure under mitigation 602631.82 0.00 102933.56 0.00 35.41 0.00 705600.79 0.00 Total Fund Based 2413692.97 555422.04 529379.12 426445.57 280118.25 421049.36 3223190.34 1402916.15 outstanding Non Fund based (after 43375.76 15289.41 37600.70 23002.81 16166.38 19038.56 97142.84 57330.78 applying CCF) Total 2457068.73 570711.45 566979.82 449448.38 296284.63 440087.92 3320333.18 1460246.93

* Other assets include cash, balance with RBI, balance with other banks, ﬁ xed assets and others. ** BV: Book Value; RWA: Risk Weighted Assets.

Table DF - 5 Credit Risk: Credit Risk Mitigation: Disclosures for Standardized Approaches Qualitative Disclosures a) The general qualitative disclosure requirement with respect to credit risk mitigation including Policies and process for and an indication of the extent to which the bank makes use of, on and off balance sheet netting;  Policies and processes for collateral valuation and management Bank has a policy and procedure for the management of collateral and guarantees. Valuation is based on the current forced sale value of the collateral and not biased in order to enable the bank, to grant a higher credit limit to the borrower or improve its internal credit rating, make a smaller amount of provision or continue interest accrual for a problem credit. Further, collateral is revalued on a regular basis, though the frequency may vary with the type of collateral involved and the nature & the internal credit rating of the underlying credit e.g. frequency for shares and properties as collateral would be different. Collaterals & guarantees are properly evaluated with respect to legal validity, enforceability in all relevant jurisdictions, etc., for the purpose of netting as credit risk mitigants as per the policy. A more conservative approach is adopted for valuing the collateral of problem credits because the forced-sale value, rather than the open market value, is likely to be closer to what eventually may be realized from an asset sale when the market conditions are un- favorable. Therefore, a discount to the estimated forced sale value should be applied where appropriate.

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 Description of the main types of collateral taken by the bank Under Standardized approach, the following collateral instruments used as risk mitigants for the capital computation. 1. Cash and fi xed deposits of the Borrower with the Bank. 2. Gold ( The value of the gold arrived after notionally converting into 99.99% purity) 3. Securities issued by Central and State Governments. 4. Kisan Vikas Patra and National Savings Certifi cates (with no lock-in period) 5. Life insurance policies with a declared surrender value of an insurance company which is regulated by an insurance sector regulator. 6. Debt Securities issued by Public Sector Entities and other entities (including banks and other primary dealers) rated by chosen rating agency attracting 100% risk weight or lesser risk weight.( i.e. rated atleast BBB(-) or A3 for short-term debt instruments) 7. Debt Securities not rated by a chosen Credit Rating Agency in respect of which banks should be suffi ciently confi dent about the market liquidity where these are a) Issued by a bank b) Listed on a recognized stock exchange, c) Classifi ed as senior debt and d) all the rated issues of the same senior by the issuing bank are rated atleast BBB (-) or A3 by a chosen Credit Rating Agency. e) The bank has no information to suggest that the issue justifi es a rating below BBB (-) or A3 by a chosen Credit Rating Agency

8. Units of Mutual Funds regulated by the securities regulator of the jurisdiction of the Bank’s operation and mutual funds where a. A price for the units is publicly quoted daily i.e. where the daily NAV is available in public domain b. Mutual fund is limited to investing in the permitted instruments listed.

 Information about (market or credit ) risk concentrations within the mitigation taken Majority of the exposures are retail exposures and insulated with adequate liquid collateral by way of cash margin, KVP, ﬁ xed deposits, National Savings Certiﬁ cate, Life Insurance Policies etc for reducing the capital buffer after applying applicable haircuts in the respective securities.

Quantitative Disclosures a) For each separately disclosed credit risk portfolio the total exposure (after, where applicable, on –or off balance sheet netting) that is covered by eligible ﬁ nancial collateral after the application of haircuts. Credit Risk exposure covered by Eligible Financial Collaterals (` in lakhs)

Type of Exposure Notional Exposure (After CCF) Eligible Financial Collaterals Net Exposure

On Balance Sheet 505534.12 571104.08 0.00 Off Balance Sheet 97142.84 29350.17 67792.67 Total 602676.96 600454.25 67792.67 b) For each separately disclosed portfolio the total exposure (after, where applicable, on- or off-balance sheet netting) that is covered by guarantees/credit derivatives (whenever speciﬁ cally permitted by RBI) NIL

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Table DF - 6 Securitization Exposure - Disclosure for Standardized Approach Quantitative Disclosure – Banking Book

Amount of Securitization Exposure (Purchased by Bank) ` 391824.12 lakhs

The securitized exposures in banking book are vehicle/Gold/ MFI Loans. The Risk weight of the counterparty varies based on the underlying Assets.

Table DF - 7 Market risk in Trading Book

Qualitative disclosures Approach for Computation of Capital charge for Market Risk Standardized Duration Approach is used for calculating Capital charge for Market Risk. Components under Market risk are a) Speciﬁ c Risk – Capital Charge for market risk is computed based on risk weights prescribed by the regulator. b) General Market Risk is calculated for Securities under HFT category Securities under AFS category Open foreign exchange position limits Trading Positions in Derivatives The total Capital charge for market risk is equal to greater of Speciﬁ c Capital charge plus General Market Risk Capital Charge or Alternative total capital charge.

Quantitative Disclosures a) The capital requirements for: • Interest rate risk ` 11461.36 lakhs • Equity position risk ` 3592.09 lakhs • Foreign exchange risk ` 1066.86 lakhs

Table DF - 8 Operational Risk The Bank has put in place comprehensive Operational Risk Management policy along with its frameworks (Risk & Control Self Assessment (RCSA), Key Risk Indicators (KRI) and Loss Data Management), Information System Security, Business Continuity and Disaster Recovery Management. The Operational Risk Management Policy outlines the Organisation structure and covers the process of identiﬁ cation, assessment / measurement and control of various operational risks. Internal control mechanism is in place to control and minimize the operational risks. The Bank has since further strengthened the existing Operational risk framework by establishing sound governance committees at the Board level/ Senior Management level. Bank has designed and implemented the Operational risk Management Policy along with frameworks and processes for conducting Risk & Control Self assessment , Key risk indicators for monitoring certain key risks, Loss data management, Product /Change Management and Outsourcing of ﬁ nancial activities. A-part from these, bank is regularly conducting thematic studies and risk walk through based on internal/ external risk perception. The bank has also in place policies related to Information Security/ Cyber Security/ Overall Business Continuity/ Outsourcing which lay down the path for effective Management of all sorts of risk in IT/ Non IT Environment.

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Operational risk capital assessment: Capital charge for operational risk is computed as per the Basic Indicator Approach. The average of the gross income, as deﬁ ned in the New Capital Adequacy Framework guidelines, for the previous 3 years i.e., FY16, FY17 & FY18 is considered for computing the capital charge. The required capital is ` 20357.05 lakhs.

Table DF - 9 Interest Rate Risk in the Banking Book (IRRBB) Interest Rate Risk in Banking Book (IRRBB) refers to the risk of loss in earnings and economic value of the Bank’s Banking Book as a consequence of movement in interest rates. The Bank has signiﬁ cant portion of its assets and liabilities portfolio not marked to market and is carried on the books of the Bank at historical values. Thus, the economic value of such assets and liabilities is generally not ascertained on a regular basis and can be a signiﬁ cant source of risk if the asset or liability is not held till maturity.

IRRBB Earnings Perspective The immediate impact of changes in interest rates in the market is on bank’s earnings by changing the Net Interest Income (NII). The interest rate risk when viewed from this perspective is known as ‘Earnings Perspective’. The asset liability proﬁ le up to 6 months is ‘asset sensitive’. The positive mismatches in the near term time buckets (up to 6 months) will be beneﬁ cial to the bank if the interest rates increases in the economy.

Interest Rate Risk – Economic Value Perspective The long-term impact of changes in interest rates in the economy will be on bank’s Market Value of Equity (MVE) since the economic value of the bank’s assets, liabilities and off-balance sheet positions get affected due to variations in market interest rates. Duration Gap Analysis (DGA) for IRR management is a simple approach to measure the volatility of market value of equity (MVE) in response to the changes in interest rates in the economy. Since the modifi ed duration of the liabilities are less compared to the modifi ed duration of assets, there would be a fall in the equity value under major stress. In order to bring down the percentage of fall in market value of equity and earnings at risk under major stress, we have been mobilizing term deposits with longer tenure i.e., 3-5 years and over 5 years. As longer the tenure of liabilities, higher will be the modifi ed duration. The level of IRRBB (Earnings Perspective & Economic Value Perspective) is being measured and monitored on a quarterly basis aiming at managing it within the limit over a period and minimizes the impact of interest rate movement on near term profi tability.

Quantitative Disclosures The impact is calculated for a parallel shift of 200 bps across all the time buckets. The fall of NII is at ` 5713.43 lakhs and there would be increase of MVE by ` 4538.29 lakhs.

Table DF - 10 General Disclosure for Exposures related to Counterparty Credit Risk Counterparty exposures for other entities are assessed subject to exposure ceilings as per the policy of the bank. Capital for Counterparty Credit Risk exposure is assessed based on the Standardized approach. Bank does not have bilateral netting. The Credit equivalent amount of the derivative exposure is assessed based on the Current Exposure method.

Credit Exposure as on 31.03.2019 (` in lakhs)

Gross Positive fair Potential Future Total Credit Notional Amount value of contracts Exposure Exposure Forward Contracts 456776.63 11676.52 9264.23 20940.75 Swaps 142510.00 2150.92 1425.10 3576.02

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Table DF-11 Composition of Capital (` in lakhs)

Common Equity Tier 1 capital: instruments and reserves 1 Directly issued qualifying common share capital plus related stock surplus (share premium) 221589.50 2 Retained earnings (44163.85) 3 Accumulated other comprehensive income (and other reserves) 4 Directly issued capital subject to phase out from CET1 (only applicable to non-joint stock companies) Public sector capital injections grandfathered until January 1, 2018 5 Common share capital issued by subsidiaries and held by third parties (amount allowed in group CET1) 6 Common Equity Tier 1 capital before regulatory adjustments 177425.65 Common Equity Tier 1 capital: regulatory adjustments 7 Prudential valuation adjustments 8 Goodwill (net of related tax liability) 9 Intangibles other than mortgage-servicing rights (net of related tax liability) 3795.97 10 Deferred tax assets 23197.00 11 Cash-fl ow hedge reserve 12 Shortfall of provisions to expected losses 13 Securitisation gain on sale 14 Gains and losses due to changes in own credit risk on fair valued liabilities 15 Defi ned-benefi t pension fund net assets 16 Investments in own shares (if not already netted off paid-in capital on reported balance sheet) 17 Reciprocal cross-holdings in common equity 11.44 18 Investments in the capital of banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) 19 Signifi cant investments in the common stock of banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions (amount above 10% threshold) 20 Mortgage servicing rights (amount above 10% threshold) 21 Deferred tax assets arising from temporary differences (amount above 10% threshold, net of related tax 47715.88 liability) 22 Amount exceeding the 15% threshold 23 of which: signifi cant investments in the common stock of fi nancial entities 24 of which: mortgage servicing rights 25 of which: deferred tax assets arising from temporary differences 26 National specifi c regulatory adjustments (26a+26b+26c+26d) 26a of which: Investments in the equity capital of the unconsolidated insurance subsidiaries 26b of which: Investments in the equity capital of unconsolidated non-fi nancial subsidiaries 26c of which: Shortfall in the equity capital of majority owned fi nancial entities which have not been consolidated with the bank 26d of which: Unamortized pension funds expenditures

75 ANNUAL REPORT 2018 - 2019

Regulatory Adjustments Applied to Common Equity Tier 1 in respect of Amounts Subject to Pre-Basel III Treatment of which: [INSERT TYPE OF ADJUSTMENT] For example: fi ltering out of unrealized losses on AFS debt securities (not relevant in Indian context) of which: [INSERT TYPE OF ADJUSTMENT] of which: [INSERT TYPE OF ADJUSTMENT] 27 Regulatory adjustments applied to Common Equity Tier 1 due to insuffi cient Additional Tier 1 and Tier 2 to cover deductions 28 Total regulatory adjustments to Common equity Tier 1 74720.29 29 Common Equity Tier 1 capital (CET1) 102705.37 Additional Tier 1 Capital : Instruments 0.00 30 Directly issued qualifying Additional Tier 1 instruments plus related stock surplus (31+32) 31 of which: classifi ed as equity under applicable accounting standards (Perpetual Non-Cumulative Preference Shares) 32 of which: classifi ed as liabilities under applicable accounting standards (Perpetual debt Instruments) 33 Directly issued capital instruments subject to phase out from Additional Tier 1 34 Additional Tier 1 instruments (and CET1 instruments not included in row 5) issued by subsidiaries and held by third parties (amount allowed in group AT1) 35 of which: instruments issued by subsidiaries subject to phase out 36 Additional Tier 1 capital before regulatory adjustments Additional Tier 1 Capital: regulatory adjustments 37 Investments in own Additional Tier 1 instruments 38 Reciprocal cross-holdings in Additional Tier 1 instruments 39 Investments in the capital of banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued common share capital of the entity (amount above 10% threshold) 40 Signifi cant investments in the capital of banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions) 41 National specifi c regulatory adjustments (41a+41b) 41a Investments in the Additional Tier 1 capital of unconsolidated insurance subsidiaries 41b Shortfall in the Additional Tier 1 capital of majority owned fi nancial entities which have not been consolidated with the bank Regulatory Adjustments Applied to Additional Tier 1 in respect of Amounts Subject to Pre-Basel III Treatment of which: [INSERT TYPE OF ADJUSTMENT e.g. DTAs] of which: [INSERT TYPE OF ADJUSTMENT e.g. existing adjustments which are deducted from Tier 1 at 50%] of which: [INSERT TYPE OF ADJUSTMENT] 42 Regulatory adjustments applied to Additional Tier 1 due to insuffi cient Tier 2 to cover deductions 43 Total regulatory adjustments to Additional Tier 1 capital 44 Additional Tier 1 Capital (AT1) 44a Additional Tier 1 capital reckoned for capital adequacy 45 Tier 1 capital (T1 = CET1 + AT1) (29 + 44a) 102705.37

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Tier 2 Capital : Instruments and provisions 46 Directly issued qualifying Tier 2 instruments plus related stock surplus 30710.00 47 Directly issued capital instruments subject to phase out from Tier 2 48 Tier 2 instruments (and CET1 and AT1 instruments not included in rows 5 or 34) issued by subsidiaries and held by third parties (amount allowed in group Tier 2) 49 of which: instruments issued by subsidiaries subject to phase out 50 Provisions 10130.16 51 Tier 2 capital before regulatory adjustments 40840.16 Tier 2 Capital : regulatory adjustments 52 Investments in own Tier 2 instruments 53 Reciprocal cross-holdings in Tier 2 instruments 1000.00 54 Investments in the capital of banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued common share capital of the entity (amount above the 10% threshold) 55 Signifi cant investments13 in the capital banking, fi nancial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions) 56 National specifi c regulatory adjustments (56a+56b) 56a of which: Investments in the Tier 2 capital of unconsolidated subsidiaries 56b of which: Shortfall in the Tier 2 capital of majority owned fi nancial entities which have not been consolidated with the bank Regulatory Adjustments Applied To Tier 2 in respect of Amounts Subject to Pre-Basel III Treatment of which: [INSERT TYPE OF ADJUSTMENT e.g. existing adjustments which are deducted from Tier 2 at 50%] of which: [INSERT TYPE OF ADJUSTMENT 57 Total regulatory adjustments to Tier 2 capital 1000.00 58 Tier 2 capital (T2) 39840.16 58a Tier 2 capital reckoned for capital adequacy 35913.42 58b Excess Additional Tier 1 capital reckoned as Tier 2 capital 0.00 58c Total Tier 2 capital admissible for capital adequacy (58a+58b) 35913.42 59 Total capital (TC=T1+T2) (45+58C) 138618.79 Risk Weighted Assets in respect of Amounts Subject to Pre-Basel III Treatment of which: [INSERT TYPE OF ADJUSTMENT] of which: ... 60 Total risk weighted assets (60a+60b+60c) 1795670.93 60a of which: total credit risk weighted assets 1460246.93 60b of which: total market risk weighted assets 148232.75 60c of which: total operational risk weighted assets 187191.25 Capital ratios 61 Common Equity Tier 1 (as a percentage of risk weighted assets) 5.72% 62 Tier 1 (as a percentage of risk weighted assets) 5.72% 63 Total capital (as a percentage of risk weighted assets) 7.72% 64 Institution specifi c buffer requirement (minimum CET1requirement plus capital conservation and 7.375% countercyclical buffer requirements, expressed as a percentage of risk weighted assets)

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65 of which: capital conservation buffer requirement 1.875% 66 of which: bank specifi c countercyclical buffer requirement NA 67 of which: G-SIB buffer requirement NA 68 Common Equity Tier 1 available to meet buffers (as a percentage of risk weighted Assets) (Including point 1.875% no.65 of above) National minima (if different from Basel III) 69 National Common Equity Tier 1 minimum ratio (if different from Basel III minimum) 5.50% 70 National Tier 1 minimum ratio (if different from Basel III minimum) 7.00% 71 National total capital minimum ratio (if different from Basel III minimum) 9.00% Amounts below the thresholds for deduction (before risk weighting) 72 Non-signifi cant investments in the capital of other fi nancial entities 73 Signifi cant investments in the common stock of fi nancial entities 74 Mortgage servicing rights (net of related tax liability) 75 Deferred tax assets arising from temporary differences (net of related tax liability) Applicable caps on the inclusion of provisions in Tier 2 76 Provisions eligible for inclusion in Tier 2 in respect of exposures subject to standardized approach (prior 10130.16 to application of cap) 77 Cap on inclusion of provisions in Tier 2 under standardized approach 18253.09 Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach 78 (prior to application of cap) 79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach Capital instruments subject to phase-out arrangements (only applicable between March 31, 2017 and March 31, 2022) 80 Current cap on CET1 instruments subject to phase out arrangements 81 Amount excluded from CET1 due to cap (excess over cap after redemptions and maturities) 82 Current cap on AT1 instruments subject to phase out arrangements 83 Amount excluded from AT1 due to cap (excess over cap after redemptions and maturities 84 Current cap on T2 instruments subject to phase out arrangements 85 Amount excluded from T2 due to cap (excess over cap after redemptions and maturities)

Notes to the Template

Row No. of the Particular (` in lakhs) template 10 Deferred tax assets associated with accumulated losses Deferred tax assets (excluding those associated with accumulated losses) net of Deferred tax liability Total as indicated in row 10 If investments in insurance subsidiaries are not deducted fully from capital and instead considered 19 under 10% threshold for deduction, the resultant increase in the capital of bank of which: Increase in Common Equity Tier I Capital of which: Increase in Additional Tier I Capital of which: Increase in Tier 2 Capital

78 ANNUAL REPORT 2018 - 2019

Row No. of the Particular (` in lakhs) template If investments in the equity capital of unconsolidated non-ﬁ nancial subsidiaries are not deducted 26b and hence, risk weighted then: (i) Increase in Common Equity Tier I Capital (ii) Increase in risk weighted assets Excess Additional Tier I capital not reckoned for capital adequacy (difference between Additional 44a Tier I capital as reported in row 44 and admissible Additional Tier I capital as reported in 44a) of which: Excess Additional Tier I capital which is considered as Tier 2 capital under row 58b 50 Eligible Provisions included in Tier 2 capital 10130.16 Eligible Revaluation Reserves included in Tier 2 capital 0.00 Total of row 50 10130.16 Excess Tier 2 capital not reckoned for capital adequacy (difference between Tier 2 capital as 58a reported in row 58 and T2 as reported in 58a)

Table DF - 13 Main Features of Regulatory Capital Instruments

Disclosure template for main S. features of regulatory capital Equity Shares Series - VII (B) Series -VIII Series -IX Series -X No. instruments 1 Issuer LVB LVB LVB LVB LVB 2 Unique identiﬁ er (e.g. CUSIP, ISIN INE694C01018 INE694C08047 INE694C08054 INE694C08062 INE694C08070 or Bloomberg identiﬁ er for private placement)

3 Governing law(s) of the instrument Companies Act, RBI Guidelines, RBI Guidelines, RBI Guidelines, RBI Guidelines, SEBI Regulations, SEBI Regulations, SEBI Regulations, SEBI Regulations, SEBI Regulations, RBI Guidelines, Companies Act Companies Act Companies Act Companies Act and other related and other related and other related and other related and other related rules regulations rules regulations rules regulations rules regulations rules regulations etc., etc., etc., etc., etc., Regulatory treatment 4 Transitional Basel III rules Common Equity Tier - II Tier - II Tier - II Tier - II Tier - I 5 Post-transitional Basel III rules Common Equity Eligible Eligible Eligible Eligible Tier - I 6 Eligible at solo/group/ group & solo Solo Solo Solo Solo Solo 7 Instrument type Common Shares Unsecured Unsecured Non Unsecured Non Unsecured Non Redeemable Convertible Convertible Convertible Non Convertible Redeemable Redeemable Redeemable Subordinated ( Basel III Basel III Basel III Tier- II) Bonds Compliant ( Compliant ( Compliant ( in the nature of Tier- II) Bonds Tier- II) Bonds Tier- II) Bonds Debentures ( in the nature of in the nature in the nature Bonds) Series - Debentures ( of Debentures of Debentures VII – Option - B Bonds) Series (Bonds) Series (Bonds) Series - X - VIII - IX 8 Amount recognized in regulatory capital 31990.32 452.00 6248.00 14010.00 10000.00 (` in lakhs )

9 Par value of instrument (` in lakhs ) ` 10 per share 10.00 10.00 5.00 5.00 10 Accounting classiﬁ cation Shareholders Liability Liability Liability Liability Equity

79 ANNUAL REPORT 2018 - 2019

Disclosure template for main S. features of regulatory capital Equity Shares Series - VII (B) Series -VIII Series -IX Series -X No. instruments 11 Original date of issuance Various Dates 10.02.2012 24.03.2014 30.09.2015 09.06.2017 12 Perpetual or dated Perpetual Dated Dated Dated Dated 13 Original maturity date No Maturity 10.02.2022 24.03.2024 30.09.2025 09.06.2024 14 Issuer call subject to prior supervisory No--- approval 15 Optional call date, contingent call dates NA The bank has not The bank has not The bank has not The bank has not and redemption amount reserved any call reserved any call reserved any call reserved any call option to redeem option to redeem option to redeem option to redeem these bonds prior these bonds prior these bonds prior these bonds prior to their maturity. to their maturity. to their maturity. to their maturity. These bonds are These bonds are These bonds are These bonds are redeemable at redeemable at redeemable at redeemable at par. par. par. par. 16 Subsequent call dates, if applicable ---- Coupons / dividends ---- 17 Fixed or ﬂ oating dividend/coupon - Fixed Fixed Fixed Fixed 18 Coupon rate and any related index - 11.40% 11.80% 11.50% 10.70% 19 Existence of a dividend stopper NA No No No No 20 Fully discretionary, partially Fully Mandatory Mandatory Mandatory discretionary or mandatory Discretionary Mandatory

21 Existence of step up or other incentive No No No No No to redeem 22 Noncumulative or cumulative Non-cumulative Cumulative Cumulative Cumulative Cumulative 23 Convertible or non-convertible NA Non-convertible Non-convertible Non-convertible Non-convertible 24 If convertible, conversion trigger(s) NA NA NA NA NA 25 If convertible, fully or partially NA NA NA NA NA 26 If convertible, conversion rate NA NA NA NA NA 27 If convertible, mandatory or optional NA NA NA NA NA conversion 28 If convertible, specify instrument type NA NA NA NA NA convertible into 29 If convertible, specify issuer of NA NA NA NA NA instrument it converts into 30 Write-down feature No No No No No 31 If write-down, write-down trigger(s) NA NA NA NA NA 32 If write-down, full or partial NA NA NA NA NA 33 If write-down, permanent or temporary NA NA NA NA NA 34 If temporary write-down, description of NA NA NA NA NA write-up mechanism 35 Position in subordination hierarchy in NA All Depositors and All Depositors and All Depositors and All Depositors and liquidation (specify instrument type other Creditor of other Creditor of other Creditor of other Creditor of immediately senior to instrument) the Bank the Bank the Bank the Bank 36 Non-compliant transitioned features ---- 37 If yes, specify non-compliant features ----

80 ANNUAL REPORT 2018 - 2019

Table DF - 14 Full Terms and Conditions of Regulatory Capital Instruments

Details of Tier II Capital (Banks - Regulatory Capital instruments) raised by the Bank and the position as on 31.03.2019 Instruments Series - VII (B) Series-VIII Series - IX Series - X Date of Allotment 10.02.2012 24.03.2014 30.09.2015 09.06.2017 Date of Redemption 10.02.2022 24.03.2024 30.09.2025 09.06.2024 Rate of Interest 11.40% 11.80% 11.50% 10.70% Amount (` in lakhs ) 5050.00 7810.00 14010.00 10000.00 Bonds in Bonds in nature Bonds in nature Bonds in nature nature of of of of Nature of Instrument Debentures Debentures Debentures Debentures (Bonds) (Bonds) (Bonds) (Bonds) Amount Subscribed 5050.00 7810.00 14010.00 10000.00 (` in lakhs ) Lakhs Lakhs Lakhs Lakhs Face Value of the Bond 10.00 lakhs 10.00 lakhs 5.00 lakhs 5.00 lakhs Issuance, Trading and Listing NSE NSE NSE NSE

Leverage Ratio (Solo) (` in lakhs)

Table DF - 18 Leverage Ratio Common Disclosure Template Item Leverage ratio framework On-Balance Sheet Exposure 1 1 On-balance sheet items (excluding derivatives and SFTs, but including collateral) 3304616.29 2 (Asset amounts deducted in determining Basel III Tier 1 capital) 4925.94 3 Total on-balance sheet exposures (excluding derivatives and SFTs) (sum of lines 1 and 2) 3299690.35 Derivative Exposure Replacement cost associated with all derivatives transactions (i.e. net of eligible cash variation 4 margin) Add-on amounts for PFE associated with all derivatives 5 9135.53 transactions Gross-up for derivatives collateral provided where deducted from the balance sheet assets 6 pursuant to the operative accountingframework (Deductions of receivables assets for cash variation margin 7 provided in derivatives transactions) 8 (Exempted CCP leg of client-cleared trade exposures) 9 Adjusted effective notional amount of written credit derivatives (Adjusted effective notional offsets and add-on deductions for 10 written credit derivatives) 11 Total derivative exposures (sum of lines 4 to 10) 9135.53 Securities Financing Transaction Exposures Gross SFT assets (with no recognition of netting), after adjusting for sale accounting 12 transactions 13 (Netted amounts of cash payables and cash receivables of gross SFT assets) 14 CCR exposure for SFT assets 15 Agent transaction exposures 16 Total securities ﬁ nancing transaction exposures (sum of lines 12 to 15)

81 ANNUAL REPORT 2018 - 2019

Item Leverage ratio framework Other off-balance sheet exposures 17 Off-balance sheet exposure at gross notional amount 188215.69 18 (Adjustments for conversion to credit equivalent amounts) 80509.14 19 Off-balance sheet items (sum of lines 17 and 18)` 107706.55 Capital and total exposures 20 Tier 1 Capital 102705.37 21 Total exposures (sum of lines 3,11,16 and 19) 3416532.43 Leverage Ratio 22 Basel III leverage ratio (%) 3.01%

Liquidity Coverage Ratio (` in lakhs)

2018-2019 Total Unweighted Total Weighted Value (Average) Value (Average) High Quality Liquid Assets 1. Total High Quality Liquid Assets (HQLA) - 639975.80 Cash Outfl ows 2 Retail deposits and deposits from small business customers, of which 1788222.80 162060.63 (i) Stable Deposits 335232.91 16761.65 (ii) Less stable Deposits 1452989.88 145298.99 3 Unsecured wholesale funding, of which: 513947.66 168522.20 (i) Operational deposits (all counterparties) 0.00 0.00 (ii) Non-operational deposits (all counterparties) 513947.66 168522.20 (iii) Unsecured debt 0.00 0.00 4. Secured Wholesale funding 118988.84 1951.61 5. Additional requirements, of which 1594699.91 114087.47 (i) Outfl ows related to derivative exposures and other collateral requirements 1663.30 1663.30 (ii) Outfl ows related to loss of funding on debt products 0.00 0.00 (iii) Credit and Liquidity facilities 1642.41 592.22 6. Other contractual funding obligations 38372.30 38372.30 7. Other contingent funding obligations 1553021.91 73459.65 8. Total Cash Outfl ows 4015859.20 446621.92 Cash Infl ows 9. Secured lending (e.g. reverse repos) 9902.89 0.00 10. Infl ows from fully performing exposures 110270.52 55135.26 11. Other cash infl ows 5347.85 5347.85 12. Total Cash Infl ows 125521.26 60483.11 Total Adjusted Value 21 TOTAL HQLA 639975.80 22 Total Net Cash Outfl ows 386009.77 23 Liquidity Coverage Ratio (%) 165.79

82 ANNUAL REPORT 2018 - 2019

CERTIFICATE ON CORPORATE GOVERNANCE

To, The Members The Lakshmi Vilas Bank Limited Karur

We have examined the compliance of conditions of Corporate Governance by M/s. The Lakshmi Vilas Bank Limited for the year ended 31st March, 2019 as stipulated under Schedule V (E) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.

The compliance of the conditions of Corporate Governance is the responsibility of the management. My examination was limited to procedures and implementation thereof, adopted by the Bank for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the ﬁ nancial statements of the Bank.

In my opinion and to the best of my information and according to the explanations given to me, I certify that the Bank has compiled with the conditions of Corporate Governance as stipulated in the above-mentioned SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.

I state that no investor grievance is pending for a period exceeding one month against the Bank and as per the records maintained by the Stakeholders Relationship Committee.

I further state that such compliance is neither an assurance as to the future viability of the Bank nor the efﬁ ciency or effectiveness with which the management has conducted the affairs of the Bank.

K. MUTHUSAMY Place : Coimbatore Company Secretary in Practice Date : 22.05.2019 M No: F 5865; CP: 3176

Auditor’s Certiﬁ cate on ESOS

This is to certify that M/s. The Lakshmi Vilas Bank Ltd, Chennai has implemented the Employees Stock Option Scheme 2010 (ESOS – 2010) in accordance with resolution passed by the Shareholders on 04th August 2010 and as per the Securities and Exchange Board of India Regulations.

For M/s. P CHANDRASEKAR LLP Chartered Accountants FRN: 000580S/S200066

(LAKSHMY CHANDRASEKARAN) Place : Bangalore Partner Date : 28th May 2019 M. No. 028508

83 ANNUAL REPORT 2018 - 2019

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS (pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015) To The Members of Lakshmi Vilas Bank Limited, Salem Road, Kathaparai, Karur – 639006. I have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Lakshmi Vilas Bank Limited having CIN L65110TN1926PLC001377 and having registered offi ce at Salem Road, Kathaparai, Karur – 639006 (hereinafter referred to as ‘the Bank’), produced before me by the Bank for the purpose of issuing this Certifi cate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. In my opinion and to the best of my information and according to the verifi cations (including Directors Identifi cation Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to me by the Bank & its offi cers, I hereby certify that none of the Directors on the Board of the Bank as stated below for the Financial Year ending on 31st March, 2019 have been debarred or disqualifi ed from being appointed or continuing as Directors of companies / Bank by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.

Sr. No. Name of Director DIN Date of appointment in the Bank 1 Bodavaram Krishnasetty Manjunath 00319891 06.06.2017 2 Parthasarathi Mukherjee 02446180 25.01.2016 3 Yapamakala Narayanasety Lakshminarayamurthy 07534836 10.06.2016 4 Kusuma Ramakrishna Setty Muniraju 02111974 01.07.2016 5 Anuradha Pradeep 00291763 21.03.2017 6 Sudhakara Gupta Gunneswaran 00005150 27.09.2017 7 Upendra Hosdurg Sundar Kamath 02648119 20.04.2018 8 Narayanan Saiprasad 00137910 30.03.2019 9 Suvendu Pati 07452701 12.02.2016 10 Rajnish Kumar 07833241 17.05.2017

Ensuring the eligibility of for the appointment / continuity of every Director on the Board is the responsibility of the management of the Bank. Our responsibility is to express an opinion on these based on our verifi cation. This certifi cate is neither an assurance as to the future viability of the Bank nor of the effi ciency or effectiveness with which the management has conducted the affairs of the Bank.

Place: Coimbatore K Muthusamy Date : 22.05.2019 Company Secretary in Practice M. No:5865 CP: 3176

84 ANNUAL REPORT 2018 - 2019

Annexure - A MANAGEMENT DISCUSSIONS AND ANALYSIS

Industry Developments: Key investments and developments in India’s banking industry include: • As of September 2018, the Government of India launched India Post Payments Bank (IPPB) and has opened branches across 650 districts to achieve the objective of fi nancial inclusion. • Moody’s Investor Service expects India’s fi scal defi cit to reach 3.40% of GDP in FY 19 as against the government’s budgeted target at 3.30% of GDP. • RBI constituted a High-Level Committee on deepening of digital payments under the Chairmanship of Shri Nandan Nilekani to encourage digitization of payments and enhance fi nancial inclusion. • RBI introduced the Voluntary Retention Route for Investments by Foreign Portfolio Investors (FPIs). • RBI has allowed another six months for completion of the KYC process of Prepaid Payment Instruments (PPIs). • RBI introduced Ombudsman Scheme for digital transactions. • On January 01, 2018, new norms for restructuring of existing loans to Micro, Small and Medium enterprises (MSMEs) have been released by the Reserve Bank of India (RBI). • RBI has published the Payment Systems Vision 2021, which has been formalised based on inputs from various stakeholders and guidance of the Board for Payment and Settlement Systems (BPSS). It envisages to achieve a ‘highly digital’ and ‘cash-lite’ society through the goal posts of Competition, Cost effectiveness, Convenience and Confi dence (4Cs)

Opportunities and Threats: Opportunities Growth and Development Limiters for India Despite optimism for India’s prospects for economic growth and development, there are certain obstacles which needs to be concentrated for growth and development thus offering enough opportunities to enhance business - • Poor infrastructure - notably in transport and power networks • Low productivity and weak human capital. A high percentage of workers are low-skilled and work in small businesses • High infl ation and a persistent trade defi cit • Low national savings as a share of GDP, low share of capital investment • Relatively closed economy - India is a net importer of primary products • Development of rural economy: The vast area of rural economy in India largelly unbanked or under banked should afford great opportunities to expand branch network and business including fi nancial inclusion supplementing Governmental efforts with huge budget allocation for various development schemes in rural areas.

Expanding the Use of Data and Analytics The combination of new technologies and the ability to access and leverage real-time data allows fi nancial institutions the opportunity to create personalization for each individual at the right time and with the right message. Consumers no longer shop for a new fi nancial institution by visiting branches, collecting product brochures and sitting down with a platform employee. Today, the vast majority of consumers do their shopping for alternative fi nancial providers online, either on a computer or a mobile device.

85 ANNUAL REPORT 2018 - 2019

Retail and services segments to continue to grow at a strong pace Retail segment is expected to continue to grow at a strong pace (19% CAGR over FY19-20) led by strong consumer demand and increase in penetration by banks. Within retail, non-housing retail segment will continue to see relatively strong growth, whereas housing credit growth is expected to grow at a steady pace over next two years.

AI Use in Finance Industry experts believe that Artifi cial Intelligence (AI) will transform nearly every aspect of the fi nancial service industry. Automated wealth management, customer verifi cation, and open banking all provide opportunities for AI solution providers. Powerful advances in deep learning technology are paving the way for AI. Tapping into social media, consumer databases and even news feeds can help banks better serve their customers, while better protecting their own interests. Fortunately, data analytics solutions are emerging with the potential to transform asset management, trading, risk management and other fi nancial services towards better customer experience.

Threats 1. Cybercrime In Finance India has witnessed a 457% rise in cybercrime incidents reported under the Information Technology (IT) Act, 2000 during the period 2011 to 2016 as per the recent ASSOCHAM-NEC joint study. With increasing dependence on the use of digital ﬁ les, data breaches have been making headlines in recent years worldwide constantly. Banks need to constantly evolve their systems and procedures to keep these risks at bay.

2. Regulatory Compliance in Financial Service Industry The ever-changing regulatory environment poses a constant challenge for ﬁ nancial institutions of all types. Automated reporting, automated audits and process streamlining are only a few of the tools helping the industry to face these challenges. Big data provides both opportunities and obstacles demanding improvements for ﬁ nancial service providers.

3. Fintech Disruption of the Financial Service Industry Fintech companies are booming and eating into the banking space. The typical operational model involves low OPEX cost with well- deﬁ ned IT Processes. The TAT and delivery are much faster when compared to the traditional Banks. Realizing that partnering with these tech-savvy startups might be more prudent than opposing them, most of the ﬁ nancial service leaders are partnering with these FinTechs.

4. Customer Retention in the Financial Services Industry Competition for ﬁ nancial servicing of clients has never been ﬁ ercer. While brand loyalty may not be in its prime, most customers are focused on greater personalization, more automated services and easier access to services. Institutions that can deliver all three together will capture better market share.

5. Crossing the digital divide in Financial Services Marketing Success in the era of digital banking means more than having a mobile app. Big data and AI will help to locate potential customers and to deliver customized offers in real time working in line with the feeder extracted from the social media to ensure quality customer

Segmentwise / Productwise Performance Details of Segmentwise / Productwise Performance has been discussed elsewhere in the report.

Outlook of the Bank: • The bank has been consistently designing new products keeping in mind the needs of its customers. The most recent product in line has been focused on MSME business named ‘Just a Dollar’ account to encourage remittances. This provides the MSME customer the opportunity to transact through our bank accounts any amount of foreign payments for one US dollar only. • Our new age core banking and proﬁ t monitoring platform is up for deployment by the next quarter end. This shall support accurate KRA monitoring for business and data management powers to the Bank.

86 ANNUAL REPORT 2018 - 2019

• The key pillars for the long-term strategy now will be capital optimization, maintaining optimal credit cost and intensive customer engagement. • Our main areas of focus shall be to increase productivity, lessening operating expenses and use more technology, wherever possible. Some of the Bank’s substantive actions that have been taken include closing down / relocation of non-profi t making ATMs. The Bank plans to move to an “OPEX Model” for handling its ATMs. It is expected that this will lead to greater utilisation of the network. • The Bank has been trying to conserve capital. This has been undertaken in three ways, by reducing asset size from its book, by focusing on increased group funded limits and by adding capital free accounts thereby rebalancing its book. • The Bank has re-organized the organizational structure by merger of certain regions and restructuring the existing 11 regional offi ces into 7 regional offi ces, supported by cluster heads for better governance and drive of business. • The Bank benchmarks its operating standards continuously with the best practices in the banking industry, so as to ensure that our customers always receive services with high level of satisfaction. • The Bank is implementing a state-of-the-art fi nancial solutions system which will lead to- . Reconciled fi nance data & analytical results of their operations in one single repository. . Ability to perform enterprise stress testing and move towards effi cient liquidity management. . Measurement of Profi tability at Branch, Product, Region and Segment level after streamlined method of transfer pricing allocation. . Identifying, Monitoring, Investigating and reporting incidents of fraud. . A few modules have gone live and the rest of the modules will be operational during the current year.

Risk & Concern: During the year the Bank has taken steps to strengthen its risk management framework in order to keep pace with requirements in terms of RBI guidelines and Basel prescriptions. Towards this end, the Bank has strengthened the risk management team during the year through induction of senior and experienced professionals. During the year there have been several meetings of executive level risk committees headed by the MD & CEO. A number of steps have been taken under their aegis to improve the control environment. The Bank has also conducted studies in the area of IT Risk and steps are being taken to improve the Bank’s capabilities in the IT area from twin perspectives of business partnership and control environment. A comprehensive project to upgrade the risk management framework and practice and align to the advanced approach of Basel has been taken up during the year. This will improve the Bank’s maturity level in the domain of risk. The risk management framework has been interlinked with process improvements to bring about lasting impact on the Bank’s operations. For the year ended March 31, 2019 the Bank maintained a Capital Adequacy Ratio of 7.72% as against the regulatory required threshold of 10.875%. It may be noted that the Bank raised Tier I (through QIP) capital of ` 448 crores (net of expenses in connection with the issue) and appropriated to the Bank’s book in Q4 of FY19. CRAR of 7.72% comprises of Tier I capital level at 5.72% and Tier II capital at 2.00%. In order to meet regulatory requirements and business requirements, the Bank is working on raising further capital, subject to requisite approval of shareholders and regulators.

Internal Control Systems: The Bank has put in place well-articulated internal control measures in tune with the complexity of business operations, organization’s size and supervisory compliance standards. Dual control on transactions and assets, control returns review of controlling offi ces, periodic visit and review of branches by executives of controlling offi ces are a few major control mechanisms in place. There is continuous review of the effi cacy of the systems and the following audit & inspections are carried out: • Risk based internal audit to measure the risk in branches and work out mitigation. • Credit Audit (Post Disbursement), Stock & Receivable Audit and Legal Audit. • Revenue Audit / Income leakage audit and various snap audits to review specifi c areas of operation including compliance to inspection observation. • Concurrent Audit is carried out by empanelled Chartered Accountant fi rms. • Information System Audit is carried out by information system auditors and qualifi ed external auditors. • Statutory Audit of branches and controlling offi ces by Chartered Accountant fi rms in terms of guidelines of the Reserve Bank of India. • Management Audit of controlling offi ces/ departments at Corporate Offi ce by trained internal inspectors of branches.

87 ANNUAL REPORT 2018 - 2019

Software application has been implemented to enhance the efﬁ ciency and effectiveness of risk based internal audit and to have robust MIS on the risks and controls. Compliance function is strengthened through an independent compliance department and implementation of application software for monitoring statutory, regulatory and internal compliance. An executive level committee consisting of top executives, reviews every inspection report and the minutes of the said committee meetings are reviewed by Audit Committee of the Board. The Audit Committee of the Board oversees the entire audit function of the Bank and the compliance thereof.

Discussion on Financial Parameters with respect to Performance: Business Segmentation:

Deposit ` in crores % Advances (Net) ` in crores % Demand Deposit 1966.97 6.72 Bills purchased & discounted 232.24 1.15 Savings Deposit 5552.26 18.96 Cash Credits, overdrafts & loans repayable on demand 8963.51 44.59 Term Deposit 21760.21 74.32 Term Loan 10907.51 54.26 Total 29279.44 100.00 Total 20103.26 100.00

• Business mix reduced by ` 9,078.62 crores (-15.05%) from ` 60,314.02 crores to ` 51,235.40 crores Y-o-Y. • CASA portfolio has grown by ` 499.73 crores from ` 7,015.03 crores to ` 7,514.76 crores CASA % increased from 21.06% to 25.67%. • NIM for 2018-19 stood at 1.65% (PY 2.38%). • Operating Loss stood at ` 11.97 crores for FY 2018-19 as against Operating Proﬁ t of ` 355.38 crores for FY 2017-18. • Net Loss of ` 894.10 crores for 2018-19 as against the net loss of ` 584.87 crores for 2017-18 • Cost to Income ratio increased to 101.48% (PY 68.67%) • Asset quality - Gross NPA 15.30% (PY 9.98%) and Net NPA 7.49% (PY 5.66%) • Provision Coverage Ratio improved to 62.08% (PY 55.07%) • Capital Adequacy Ratio (Basel III) stood at 7.72% (PY 9.81%) • ROA and ROE stood at (-) 2.32% (PY (-) 1.57%) and (-) 46.19% (PY (-) 28.34%)

STAFF / INDUSTRIAL RELATIONS: The Bank’s staff strength was 4557 at the end of the fi nancial year 2018-19. Specialist Offi cers / Executives in Credit, Law, IT, Treasury, MSME & Transaction Banking and other business and functional areas, were recruited during the year. Manpower requirements were continuously assessed. The Bank maintains cordial relationship with the Employees’ Union and Offi cers’ Association which will pave way for fast-tracking the growth of the Bank and augment the productivity among peer levels. Training is commensurate with the necessities of updating knowledge so as to equip human resources to meet the emerging challenges and newer forms of risk that are technology driven. Credit skills enhancement, NPA management, Risk Management, KYC compliance, IT & Cyber Security and Enhanced Customer Service are being emphasized by nominating the staff members to reputed external training institutions. To focus on internal talent pool development a well-defi ned succession planning programme has been put in place which may be summarized as follows: I. Identifi cation of Resources  Based on the selection criteria

II. Training & Mentoring of Successor  Training need identiﬁ cation for grooming  Short term additional assignment

88 ANNUAL REPORT 2018 - 2019

Key Financial Ratios Key Financial Ratios & details of signifi cant changes (i.e. change of 25% or more as compared to the immediately previous fi nancial year) in key fi nancial ratios, along with detailed explanations therefor, or sector-specifi c equivalent ratios, as applicable are provided herein below: Sr. No. Particulars FY 2018-19 FY 2017-18 i CRAR 7.72% 9.81% ii Tier I Capital 5.72% 8.05% iii Tier II Capital 2.00% 1.76% iv Gross NPA 15.30% 9.98% v Net NPA 7.49% 5.66% vi ROA -2.32% -1.57% vii NIM 1.65% 2.38% viii Interest Income as a % to working funds 7.41% 8.15% ix Operating Profi t as a % to working funds -0.03% 0.95% x Leverage Ratio 3.01% 4.58% xi Book Value Per Share (`)* 53.48 84.39 xii Earning Per Share (`) -34.66 -28.29

* Book value adjusted for DTA / intangible assets is ` 25.08 (31.03.2019) ` 64.18 (31.03.2018).

The Bank’s Gross Non Performing Loans (GNPA) have increased from ` 2,694.21 crores as on 31.03.2018 to ` 3,358.99 crores as on 31.03.2019 due to general stress in the economy coupled with few loan accounts in the stressed sectors falling in to the NPA category. The Net NPA (NNPA) is marginally higher from ` 1,457.89 crores an on 31.03.2018 to ` 1,506.29 crores as on 31.03.2019. Further the Bank’s loan book had to be narrowed for want of suffi cient capital support. These happenings have affected the interest margins and earnings of the Bank. Added to this, depreciation on the Bank’s investments also increased due to unrelenting rise in the market yield of Bonds. Consequent upon the above factors, the Bank’s operating margins, net profi t, NPA levels and capital adequacy ratios were impacted and the ratios representing GNPA, NNPA, CRAR, ROA, NIM, Operating Profi t, Leverage Ratio and Book Value per Share at the end of March 2019 were lower/adverse by more than 25% when compared to the position as on 31.03.2018.

Detals of change in Networth Return on Networth for the year 2018-19 was (-) 46.19% as compared to (-) 28.34% for the year 2017-18, due to increase in Net Loss of ` 309.23 crores.

Disclosure of Accounting Treatment The fi nancial statements are prepared following the going concern concept, on historical cost basis and confi rm to the Generally Accepted Accounting Principles (GAAP) in India which encompasses applicable statutory provisions, regulatory norms prescribed by Reserve Bank of India (RBI) from time to time, notifi ed Accounting Standards (AS) issued under Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 to the extent applicable to Banks and current practices prevailing in the banking industry in India. Income and Expenditure are generally accounted on accrual basis, unless otherwise stated and comply with requirements as per RBI guidelines and the provisions of Banking Regulation Act, 1949. Accounting Policies adopted in the preparation of fi nancial statements are consistent with those followed in the previous year.

89 ANNUAL REPORT 2018 - 2019

Annexure - B

BOARD OF DIRECTORS AND COMMITTEES

The composition of the Board of Directors is governed by the provisions of the Companies Act, 2013, Banking Regulation Act, 1949, Listing Agreement entered with National Stock Exchange of India Limited, Mumbai and BSE Limited, Mumbai and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended to the extent applicable. The Board has 10 Directors as on 31.03.2019, of which 1 Director is an Executive Director (MD&CEO), 3 Directors are Non-Executive and Non-Independent Directors, 4 Directors are Non-Executive and Independent Directors including the Non-executive Chairman and 2 Directors are RBI Nominees. None of the Directors are related to each other. The members of the Board are eminent persons with considerable professional expertise and experience in Banking, Law, Accountancy, Agriculture and Business. During the year under review, seventeen (17) Board Meetings were held. The Meetings were held on 20.04.2018, 25.05.2018, 26.06.2018, 26.07.2018, 07.08.2018, 08.08.2018, 30.08.2018, 08.09.2018, 24.10.2018, 03.11.2018, 29.11.2018, 21.12.2018, 11.01.2019, 23.01.2019, 04.02.2019, 08.03.2019 and 30.03.2019.

Committees of Directors: The Board has constituted various Committees of Board to deal with matters, which need special and continued focus and timely monitoring of the activities falling within the terms of reference of the Committees and in compliance with the various regulatory requirements. The details pertaining to the Directors, Composition of the Board Committees, the details of the Chairman and Members and the details of the Meetings held and that of the attendance during the year under review, are provided in Annexure C. The details of such specialized Board Committees as on 31.03.2019 are as under:

Audit Committee: Audit Committee of the Board, is chaired by Shri B.K.Manjunath (Non-Executive Chairman) an Independent Director. The Audit Committee provides direction and oversees the operation of total audit function of the Bank as per RBI guidelines. The terms of reference of Audit Committee are in accordance with RBI guidelines, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 and include the following: • Overseeing the Bank's fi nancial reporting process and the disclosure of its fi nancial information to ensure correct, adequate and credible disclosure of fi nancial information. • Recommending appointment, terms of appointment including remuneration and reviewing the performance of auditors including statutory auditors. • Reviewing with management the annual fi nancial statements before submission to the Board with special emphasis on accounting policies and practices, compliance with accounting standards and other legal requirements concerning fi nancial statements. • Reviewing the adequacy of the Audit and Compliance function, including their policies, procedures, techniques and other regulatory requirements. During the year, thirteen (13) meetings were held. The Meetings were held on 20.04.2018, 24.05.2018, 25.06.2018, 26.07.2018, 07.08.2018, 31.08.2018, 08.09.2018, 23 & 24.10.2018, 20.12.2018, 23 & 24.01.2019, 04.02.2019, 11.03.2019 and 29.03.2019.

Nomination, Remuneration and Compensation Committee: The Nomination, Remuneration and Compensation Committee was chaired by Shri Kusuma R Muniraju, Non-Executive-Independent Director, as on 31.03.2019. However, as on date, the Committee is chaired by Shri Y.N. Lakshminarayana Murthy, Non-Executive- Independent Director. The Committee is constituted as per the legal and regulatory requirements under the Banking Regulation Act, the SEBI Regulations and the Companies Act, 2013.

The scope of the Committee includes the following: 1. Scrutiny of the declarations submitted by the Directors and for carrying out the due diligence process for the appointment of directors as per RBI Circular DBOD.No.BC.104/08.139.001/2003-04 dated 25.06.2004. 2. Overseeing the framing, review and implementation of compensation policy of the Bank on behalf of the Board as laid down in the Reserve Bank of India circular pertaining to the guidelines issued on the compensation of Whole Time Directors / Chief Executive Ofﬁ cers / Risk takers and Control function staff, etc.

90 ANNUAL REPORT 2018 - 2019

3. Formulation of the criteria for determining qualifi cations, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees; 4. Formulation of criteria for evaluation of performance of Independent Directors and the Board; 5. Devising a policy on Board diversity; 6. Identifying persons who are qualifi ed to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal. 7. Framing of detailed terms and conditions of the ESOS as per Securities and Exchange Board of India (Share Based Employee Benefi ts) Regulations, 2014, besides the administration and superintendence of the ESOS scheme and further to ensure that there is no violation of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, by any employee or the Bank in this regard. The scope and role of the Committee shall also include such other assignments as is and as may be assigned by the regulatory / statutory authorities from time to time. The details pertaining to the criteria for performance evaluation for Independent Directors is mentioned in the Directors' Report. During the year, fi ve (5) meetings were held. The meetings were held on 20.04.2018, 19.06.2018, 03.11.2018, 04.02.2019 and 25.03.2019.

Stakeholders Relationship Committee: The Stakeholders Relationship Committee is chaired by Smt. Anuradha Pradeep, a Non-Executive Non-Independent Director. The Stakeholders Relationship Committee speciﬁ cally looks into the redressal of grievances of shareholders and other security holders including complaints related to transfer of shares, non-receipt of annual report and non-receipt of declared dividends. Details of name of the Chairman & members of the Committee, Compliance Ofﬁ cer, meetings and attendance during the year are provided in another part of this Annual Report. The terms of reference of Stakeholders Relationship Committee are in accordance with SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, as amended. During the year, four (4) meetings were held. The Meetings were held on 19.06.2018, 08.08.2018, 20.12.2018 and 12.03.2019.

Risk Management Committee: The Risk Management Committee, constituted as per RBI guidelines, formulates Bank's credit and Market risk policies and reviews the Assets and Liabilities of the Bank based on periodical structural liquidity and dynamic liquidity statements on outﬂ ows and inﬂ ows and also analyses the interest rate sensitivity of assets and liabilities. During the year, four (4) meetings were held. The Meetings were held on 18.06.2018, 26.09.2018, 20.11.2018 and 12.03.2019.

Fraud Monitoring Committee & Review Committee on Non-cooperative borrowers: Pursuant to the Directions of the Reserve Bank of India, the Bank has constituted a Fraud Monitoring Committee, exclusively dedicated to the monitoring and following up of cases of fraud involving amounts of Rs.1.00 crore and above. The objective of this Committee is the effective detection of frauds and ensuring prompt reporting thereof to regulatory and enforcement agencies. This Committee also functions as the Review Committee on Non-cooperative borrowers. During the year, three (3) meetings were held. The Meetings were held on 19.06.2018, 25.09.2018 and 12.03.2019.

Customer Service Committee: Pursuant to the Directions of the Reserve Bank of India, the Bank has constituted a Customer Service Committee exclusively dedicated to bring about improvement in the quality of customer service provided by the bank. During the year, two (2) meetings were held. The Meetings were held on 26.09.2018 and 12.03.2019.

Management Committee: Pursuant to the Directions of the Reserve Bank of India, the Bank has constituted a Management Committee of the Board which is vested with full powers for sanction / ratiﬁ cation of all kinds of loans and advances normally falling within the purview of the lending policies framed by the Board from time to time and full powers for approving compromise proposals in respect of loans and advances normally falling within the purview of the compromise policy framed by the Bank from time to time and approval of capital and revenue

91 ANNUAL REPORT 2018 - 2019

expenditure, ﬁ ling suits / appeals, premises approval, infrastructure improvement, investments and any other matter referred to / delegated to the Committee by the Board. During the year, twelve (12) meetings were held. The Meetings were held on 21.04.2018, 24.05.2018, 19.06.2018, 25.07.2018, 07.08.2018, 30.08.2018, 25.09.2018, 03.11.2018, 28.11.2018, 10.01.2019, 20.02.2019 and 25.03.2019.

IT Strategy Committee: Pursuant to the Directions of the Reserve Bank of India, the Bank has constituted an IT Strategy Committee of the Board and the roles and responsibilities of this Committee includes oversight of the IT strategy and policy documents, measuring the contribution of IT to business and ensuring that the IT organizational structure complements the business model. The Committee also exercises the powers to approve the requisite proposals and their related expenditure pertaining to Information Technology and Alternate Channels & ATMs. During the year, four (4) meetings were held. The Meetings were held on 18.06.2018, 21.07.2018, 20.11.2018 and 20.02.2019.

HR Committee: The role of the HR Committee of Board includes powers for framing policies for recruitment, compensation, incentives, training, promotion, transfer, service conditions, disciplinary proceedings, performance appraisal, etc. During the year, a meeting of the Committee was held on 21.11.2018.

CSR Committee: Formulated as per Section 135 and Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules 2014, the Committee exercises such powers as laid down under the applicable provisions of the Act and the Rules thereto. During the year, a meeting of the Committee was held on 30.08.2018.

Committee of Directors for Capital Raising: The Board has constituted a Committee for Capital Raising, which deals with capital raising plans and such relevant scope as the Board may authorize from time to time. During the year, ﬁ ve (5) meetings were held. The Meetings were held on 20.02.2019, 07.03.2019, 15.03.2019, 16.03.2019 and 25.03.2019.

Meeting of Independent Directors: In accordance with Section 149(7) and Schedule IV of the Companies Act, 2013 an exclusive meeting of the Independent Directors of the Bank was held on 12.03.2019.

Wilful Defaulters Review Committee: This Committee has been formulated in line with the RBI Master Circular on Wilful Defaulter dated 01st July 2014 and 07th January 2015. No meeting was held during the year.

Details of Sitting Fees Paid to Directors: All the Non-Executive Directors were paid remuneration only by way of sitting fees for each Board / Committee Meetings. No stock options were granted to any of the Non-Executive Directors. The Non-Executive Directors were paid ` 35,000/- as sitting fees which is within the limits prescribed under the Companies Act, 2013.

Additional Information pertaining to Directors' Retiring by Rotation: At this 92nd AGM, Shri G Sudhakara Gupta, Director is retiring by rotation and being eligible, offers himself for re-appointment and the additional information to be provided to the Shareholders pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 about the retiring director seeking re-election is furnished in the Notice to the members.

92 ANNUAL REPORT 2018 - 2019 Nil Nil Nil Other of any Limited in which M/s.Kisan Mouldings Chairman he/she is a Committee Companies a listed entity as on 31.03.2019 Name of the Other Companies in

which he/she is a Director & category of his Directorship, if the director is in M/s.Kisan Mouldings Limited - Listed Entity - Independent Director M/s. Amaryllis Properties Private Limited M/s. Magenta RE Asset Private Limited M/s. Holzwerk Interior Private Limited M/s. Jacaranda Properties Private Limited M/s. Pristine Propservices Private Limited M/s. Pranava Electronics Pvt Ltd., M/s. Kare Electronics and Development Pvt Ltd. M/s. Kare Investments Pvt Ltd., M/s.Bhramaputra Power Pvt. Ltd. M/s.Ram Ratna Wires Limited - Listed Entity - Independent Director M/s.Green Bridge Capital Advisory Private Limited M/s.Online PSB Loans Limited

held as on 31.03.2019 on as held

No. of Other Directorships Directorships Other of No. 4 5 3 1 Nil Nil Nil Nil Nil Nil NA NA NA Annual General Meeting General Annual

No Yes Yes Yes Yes 1 M/s.Kanya Investments Private Limited Nil Yes Nil Nil Nil Yes NA NA NA Yes Yes Nil Nil Nil

(5 meetings) (5

COD on Capital Raising Capital on COD

Director (1 meeting) (1 Director

Meeting of Independent Independent of Meeting

(CSRC) (1 meeting) (1 (CSRC)

Responsibility Committee Committee Responsibility Corporate Social Social Corporate

Meeting and directorship held from 01.04.2018 to 31.03.2019

(5 meetings) (5

Committee (NRCC) Committee

& Compensation Compensation &

Nomination, Remuneration Remuneration Nomination,

(HRC) (1 meeting) (1 (HRC)

HR Committee of the Board Board the of Committee HR

(4 meetings) (4

the Board (ITSC) (ITSC) Board the

IT Strategy Committee of of Committee Strategy IT

(FMC) (3 meetings) (3 (FMC)

Cooperative Borrowers Borrowers Cooperative

Committee on Non- on Committee

Committee and Review Review and Committee

Fraud Monitoring Monitoring Fraud

(2 meetings) (2

Committee (CSC) (CSC) Committee

Customer Service Service Customer

ANNEXURE - C meetings) (4

Committee (RMC) (RMC) Committee

Risk Management Management Risk

(12 meetings) (12

the Board ( MCB) MCB) ( Board the

Management Committee of of Committee Management

meetings)

Committee (SRC) (4 (4 (SRC) Committee

Stakeholders Relationship Relationship Stakeholders

(13 meetings) (13

Audit Committee (ACB) (ACB) Committee Audit

(17 meetings) (17

Board Board 16 12 NA 11 4 NA NA NA 1 NA NA 1 NA 17 13 1 NA 4 2 NA 4 NA NA NA NA NA 11 NA NA 6 4 NA NA 2 NA NA NA 1 NA 17 NA 4 NA 4 2 1 4 1 5 1 NA 5 14 11 NA 8 NA NA 2 NA Nil 4 Nil 1 3 17 NA 4 NA NA 2 3 NA NA 5 NA 1 NA 13 NA 3 10 NA 1 2 NA NA NA NA NA NA 17 13 NA NA NA NA NA NA NA NA NA NA NA NO 17 12 NA NA NA NA NA NA NA NA NA NA NA NO 17 13 NA17 NA 12 NA NA 12 NA 4 3 2 4 3 1 4 5 1 1 NA 1 5 1 NA 5 Nil NA NA NA NA NA NA NA NA NA NA NA NA NA Nil Nil Nil

(LODR) Regulations (LODR) Category as per SEBI SEBI per as Category

Non-Executive - Independent Director Promoter Group - Non-Executive - Non-Independent Director Non-Executive - Independent Director Non-Executive - Non-Independent Director - Independent Director Non-Executive - Independent Director Promoter - Non- Executive - Non- Independent Director Nominee Director Nominee Director Non-Executive - Independent Director Executive Director Promoter Group -Non-Executive - Non-Independent Director

Banking Regulation Act Regulation Banking Representation as per per as Representation

Majority - Banking (Practical Experience) and Small Scale Industry (Special Knowledge) Minority - Business Majority - Banking Majority - Agriculature and Rural Economy Minority - Business RBI Nominee Non-Executive - RBI Nominee Non-Executive - Minority - Accountancy Majority - Banking Minority - Business

31.03.2019

/ Committee as on on as Committee / Chairman of the Board Board the of Chairman CSRC NRCC Majority - Law Non-Executive WDRC Capital COD for Raising & MCB, HRC, RMC, FMC, SRC & CSC Minority - Law Promoter Group - ACB, ITSC & Composition of the Board Directors together with attendance at meetings Board, its Committees and Annual General Name of the Director, them as on 31.03.2019 DIN & No. of Shares held by Shri H S Upendra Kamath DIN 02648119 (No.of Shares: Nil ) (From 20.04.2018) Shri G.Sudhakara Gupta DIN 00005150 (No. of Shares: 2666) Shri Hemant Kaul DIN 00551588 (Till 27.03.2019) Smt.Anuradha Pradeep DIN 00291763 (No. of Shares: 8288) Shri Kusuma R Muniraju DIN 02111974 (No. of Shares: 76126) Shri Y.N.Lakshminarayana Murthy DIN 07534836 (No. of Shares: l626) Shri N.Malayalaramamirtham DIN 06846587 (Till 14.01.2019) Shri Rajnish Kumar (DIN 07833241) (No. of Shares: Nil) Shri Parthasarathi Mukherjee Shri Parthasarathi Mukherjee Managing Director & CEO DIN 02446180 (No. of Shares: 480000) (Re-appointed on 25.01.2019) (Till 31.08.2019) Shri Suvendu Pati DIN 07452701 (No.of Shares: Nil ) Shri B.K.Manjunath Non-Executive Chairman DIN 00319891 (No. of Shares: 212839) Shri N.Saiprasad DIN 00137910 (No.of Shares: 134865) (From 30.03.2019)

93 ANNUAL REPORT 2018 - 2019

ATTENDANCE AT AUDIT COMMITTEE MEETINGS FOR THE FY 2018-2019 Meeting details Name of the Committee Whether Held during the Members Category of Director % of attended last tenure of director / Attended (Sarvashree) total AGM (Y/N) invitee B.K.Manjunath Non Executive Chairman / Independent 13 13 100% YES Kusuma R Muniraju Non - Executive Director / Independent 13 11 85% YES G.Sudhakara Gupta Non - Executive Director / Non Independent 13 13 100% YES H.S.Upendra Kamath Non - Executive Director / Independent 12 12 100% YES (From 20.04.2018) Suvendu Pati - RBI Nominee Non - Executive - Nominee 13 12 92% NO Rajnish Kumar - RBI Nominee Non - Executive - Nominee 13 13 100% NO

ATTENDANCE AT NOMINATION, REMUNERATION & COMPENSATION COMMITTEE MEETINGS FOR THE FY 2018-2019 Name of the Committee Meeting details Members Category of Director Held during the Attended % of total tenure of director / (Sarvashree / Smt.) invitee B.K.Manjunath Non Executive Chairman / Independent 5 5 100% Y.N.Lakshminarayanamurthy Non Executive Director / Independent 5 5 100% Kusuma R Muniraju Non Executive Director / Independent 5 4 80% Anuradha Pradeep Non Executive Director / Non -Independent 5 5 100%

STAKEHOLDER'S RELATIONSHIP COMMITTEE FOR THE FY 2018-2019 Name of the Non Executive Director heading the Committee Smt.Anuradha Pradeep Non Executive Director / Non Independent Name and designation of Compliance Ofﬁ cer Shri N.Ramanathan Company Secretary & Compliance Ofﬁ cer Number of shareholders' complaints received so far 1 Number not solved to the satisfaction of shareholders Nil Number of pending complaints Nil

INFORMATION ABOUT SHARE TRANSFER WORK TO A DELEGATED AUTHORITY Description of Telephone Full Address of delegated authority Fax Numbers E-Mail ID delegated authority Numbers Name and designation Shri N.Ramanathan 044 - 22205306 044 -22205317 [email protected] of offi cer Company Secretary / Compliance Offi cer of the Company The Lakshmi Vilas Bank Limited Corporate Offi ce, "LVB House" No.4, Sardar Patel Road, Guindy, Chennai - 600 032 Name of Board Stakeholders Relationship Committee 044 - 22205306 044 -22205317 [email protected] Committee Smt.Anuradha Pradeep and Chairman's Name The Lakshmi Vilas Bank Limited Corporate Offi ce, "LVB House" No.4, Sardar Patel Road, Guindy, Chennai - 600 032 The Registrar and M/s.Integrated Registry Management 044 - 28140801 044- 28142479 [email protected] Share Services Private Limited, 28140802 28143378 Transfer Agents II Floor, "Kences Towers" 28140803 No.1, Ramakrishna Street, North Usman Road, T.Nagar, Chennai - 600 017

94 ANNUAL REPORT 2018 - 2019

Annexure - D GENERAL SHAREHOLDERS’ INFORMATION

Means of Communication: The Bank published its quarterly and annual ﬁ nancial results in English language in "Business Standard" (All India Edition) newspaper and in vernacular language in "Dinamani" (Trichy Edition) newspaper. The results are displayed on the Bank's website at www.lvbank.com. The ofﬁ cial news releases and the presentations made to the institutional investors or to the analysts are also displayed in the website. Management discussions and analysis forms part of the Annual Report, which has been sent to the shareholders of the Bank.

Financial Year - 1st April, 2018 to 31st March, 2019 92nd Annual General Meeting: Date & Time: 27th September, 2019 at 10.00 a.m. Venue: Registered Ofﬁ ce, Salem Road, Kathaparai, Karur - 639 006, Tamilnadu.

Details of last three Annual General Meetings held and Special Resolutions passed thereat are as below: S.No. of Financial Day, Date , Time & Special Resolutions passed in the previous three AGM Year Venue Annual General Meetings 89 2015-2016 Friday, 10th June, 2016 • Item No.07 – Adoption of fresh Articles of Association in line with the at 10.00 a.m at Companies Act, 2013. Registered Offi ce, • Item No. 10 – Raising of capital through QIP, GDR, ADR etc. Karur. • Item No.11 - Approval for borrowing / raising funds in Indian / foreign currency by issue of debt securities upto Rs. 200.00 crores to eligible investors on private placement basis. 90 2016-2017 Tuesday, 18th July, 2017 • Item No.12 – Raising of capital through QIP, GDR, ADR etc. at 10.00 a.m at • Item No.13 – Approval for borrowing / raising funds in Indian / foreign Registered Offi ce, currency by issue of debt securities upto Rs.250.00 crores to eligible Karur. investors on private placement basis. • Item No. 14 – ESOP 2017 scheme approval. 91 2017-2018 Wednesday, • Item No. 07 – Raising of capital through QIP, GDR, ADR etc. th 8 August, 2018 • Item No. 08 – Approval for borrowing / raising funds in Indian / foreign at 10.00 a.m at currency by issue of debt securities to eligible investors on private Registered Offi ce, placement basis. Karur.

Postal Ballot During the last ﬁ nancial year ending 31.03.2019, no postal ballot was conducted. As on date, there is no proposal requiring approval of the members through special resolution to be passed through postal ballot.

Annual General Meeting for FY 2019-20 will be held on or before 30th September, 2020 in line with the provisions under the Companies Act. Board Meetings: Results for the quarter ending June 2019 - On or before 14th August, 2019 Results for the quarter ending September 2019 - On or before 14th November, 2019. Results for the quarter ending December 2019 - On or before 14th February, 2020. Results for the quarter ending March 2020 - On or before 30th May, 2020.

95 ANNUAL REPORT 2018 - 2019

Compliance with Regulation 34(3) & Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: Name, Address and Stock Code of the Stock Exchanges where the securities of the Lakshmi Vilas Bank Limited are listed are as below:

NAME AND ADDRESS OF THE STOCK EXCHANGE STOCK CODE The National Stock Exchange of India Limited (Equity Shares and Tier II Bonds) Exchange Plaza, 5th Floor, LAKSHVILAS Plot No. C/1, G Block, Bandra - Kurla Complex, Bandra (E), Mumbai - 400 051 The BSE Limited (Equity Shares) Floor 25, PJ Towers, Dalal Street, Mumbai - 400 001 534690

Bank conﬁ rms that the applicable Annual Listing Fees has been paid to the above mentioned stock exchanges.

Stock Market Data

Listed with NSE on 21.06.2000 Month High Low No. of Shares Traded April 2018 99.80 88.10 1,03,71,335 May 2018 106.55 89.90 1,62,84,721 June 2018 121.90 99.10 3,13,24,965 July 2018 107.45 95.00 1,06,82,755 August 2018 104.80 90.35 1,26,34,744 September 2018 101.40 71.15 14,859,928 October 2018 95.80 67.50 2,84,75,392 November 2018 95.00 86.65 1,31,26,426 December 2018 92.00 85.70 1,10,10,513 January 2019 87.45 64.75 1,12,07,448 February 2019 69.75 54.70 2,23,25,469 March 2019 85.00 62.55 5,74,88,714

Listed with BSE on 24.09.2012 Month High Low No. of Shares Traded April 2018 99.60 88.20 17,64,710 May 2018 106.50 90.00 13,08,550 June 2018 121.75 99.50 1,84,30,120 July 2018 109.00 95.00 29,77,024 August 2018 104.40 90.35 22,57,978 September 2018 100.90 70.90 25,41,616 October 2018 95.55 67.95 74,56,711 November 2018 95.00 86.40 22,02,125 December 2018 92.00 85.95 2,71,779 January 2019 87.45 64.85 11,12,906 February 2019 71.00 54.80 38,92,725 March 2019 84.90 62.50 1,58,90,600

96 ANNUAL REPORT 2018 - 2019

Performance of the Equity Shares relating to NSE Nifty Index during the year 2018-19

Performance of the Equity Shares relating to BSE Index during the year 2018-19

The Registrar and Share Transfer Agent is M/s. Integrated Registry Management Services Private Limited.

Share Transfer Process: All requests pertaining to shares held in physical form are processed by the Registrar and Share Transfer Agent of the Bank - M/s. Integrated Registry Management Services Private Limited and approved by the Company Secretary, being vested with the authority by the Board of Directors of the Bank and the certiﬁ cates are dispatched to the transferees within a maximum period of 15 days from

97 ANNUAL REPORT 2018 - 2019

the date of receipt of the transfer documents by M/s. Integrated Registry Management Services Private Limited, provided if the share documents are valid in all respects. Share transfers, dividend payments, demat requests and all other investor related activities are attended to and processed at the offi ce of our Registrar and Share Transfer Agent. In compliance with Regulation 40 (9) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a half-yearly compliance certifi cate from a Company Secretary in Practice is obtained, which is also fi led with the Stock Exchanges. Further, the shareholders may note that SEBI vide its circular dated April 20, 2018 and notifi cation dated June 08, 2018 had emphasized on dematerialized shares, in cases where shares of a listed entity, have been held in physical mode. Therefore, for their own safety and interests, the shareholders who hold shares in physical form are requested to get their physical shares dematerialised by making an application to depository participants.

Shareholders' Correspondence should be addressed to: M/s. Integrated Registry Management Services Private Limited II Floor, "Kences Towers", No.1 Ramakrishna Street North Usman Road, T. Nagar, Chennai - 600 017 Ph: 044-28140801/2/3 Fax: 044-28142479 Email: [email protected]

Contact details of Debenture Trustees of the Bank for Tier-II Bonds (Debentures): The Bank has raised capital by way of Tier II Bonds (debentures) through various Series during certain ﬁ nancial years and the same are listed with the WDM segment of the NSE. The details of the debenture trustee for all the series of Tier II Bonds is as below: IDBI Trusteeship Services Limited Regd. Ofﬁ ce: Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai - 400 001. Phone: 022-40807012 | Fax: 022-66311776 | E-mail: [email protected]

Details of Credit Rating assigned by Rating Agencies and any revision thereto for the Unsecured Redeemable Non-Convertible Subordinated Lower Tier-II Bonds in the nature of Debentures issued by the Bank: Outstanding Series Current Rating Rating Revisions during the year 2018-2019 & ISIN Series – VII B Brickwork Rating: BWR BBB - • Revised from BWR A- (Outlook: Stable) to BWR BBB + (Outlook: INE694C08047 (BWR Triple B Minus (Credit watch Stable) on 23.07.2018. with Developing Implications). • Revised from BWR BBB + (Outlook: Stable) to “BWR BBB - CARE Rating: CARE BBB (CARE (Outlook : Credit Watch with Developing Implications) on 21.02.2019. Triple B) Outlook: Credit Watch • Revised from CARE A- (Single A Minus) (Outlook: Stable) to CARE with developing implications. BBB+; Negative (Triple B Plus ; Outlook: Negative) on 01.06.2018. • Revised from CARE BBB+; Negative (Triple B Plus; Outlook: Negative) to “CARE BBB” Negative (Triple B; Outlook: Negative) on 01.10.2018. • Revised from “CARE BBB” Negative (Triple B; Outlook: Negative) to “CARE BBB” (Triple B; Credit Watch with negative implications) on 02.11.2018 Series – VIII CARE Rating: CARE BBB (CARE • Revised from CARE A- (Single A Minus) (Outlook: Stable) to CARE INE694C08054 Triple B) Outlook: Credit Watch BBB+; Negative (Triple B Plus ; Outlook: Negative) on 01.06.2018. with developing implications. • Revised from CARE BBB+; Negative (Triple B Plus; Outlook: Series – IX Negative) to “CARE BBB” Negative (Triple B; Outlook: Negative) INE694C08062 on 01.10.2018. Series – X • Revised from “CARE BBB” Negative (Triple B; Outlook: Negative) INE694C08070 to “CARE BBB” (Triple B; Credit Watch with negative implications) on 02.11.2018

98 ANNUAL REPORT 2018 - 2019

Compliance with Regulation 6 (2) (d) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: SEBI has advised the listed companies to designate an exclusive email ID for redressal of Investor Complaints under Regulation 6(2)(d) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, an exclusive and separate e-mail id “[email protected]” has been designated for redressal of investors' complaints and the Compliance Ofﬁ cer monitors the same.

Distribution of Shareholding under different category as on 31.03.2019 is given below: Category Number of Records % Number of Shares % Upto 500 56568 64.96 8402538 2.63 501 - 1000 14163 16.26 10920822 3.41 1001 - 2000 7843 9.01 11200923 3.50 2001 - 3000 2848 3.27 7084739 2.21 3001 - 4000 1341 1.54 4671147 1.46 4001 - 5000 911 1.05 4146821 1.30 5001 - 10000 1811 2.08 12830378 4.01 ABOVE 10001 1598 1.84 260645862 81.48 TOTAL 87083 100.00 319903230 100.00

Dematerialization: Bank has 87083 shareholders as on 31.03.2019, being fully paid shares of Rs.10/- each. Of this 72872 folios representing 31,26,48,634 (97.73%) shares are held in Demat Form. Bank's Equity shares ISIN: INE694C01018 The shares of the Bank are admitted under demat mode with both the depositories viz., National Securities Depository Limited and Central Depository Services (India) Limited.

Nomination Facility: Shareholders who hold shares in physical form may avail of the Nomination Facility at any time by submitting Nomination Form in Form No.SH – 13 as prescribed under Section 72 of the Companies Act, 2013. While the Form is available in the MCA website, the form may also be obtained from our Registrar & Share Transfer Agent M/s. Integrated Registry Management Services Private Limited. The duly ﬁ lled in form should be submitted to our Registrar & Share Transfer Agent for registering the nomination. Shareholders holding shares in electronic form are requested to contact their Depository Participants directly for recording their nomination.

Bank Account Details: In order to avoid fraudulent encashment of dividend warrants, the members holding shares in physical form are requested to provide their Bank Account details to our Registrar and Share Transfer Agent in order to credit the applicable dividend to their concerned account.

Unclaimed Dividend / Refund: As per Section 124(5) read with Section 125 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), as amended, the dividends which were unclaimed for a period of seven years or more have to be transferred to "Investor Education and Protection Fund" ('IEPF Fund') maintained with Central Government. In compliance with the same, the Bank had transferred the unclaimed dividend amount pertaining to the year 2010-11 amounting to ` 33,18,135 to the Investors Education and Protection Fund and the unclaimed dividend pertaining to the year 2011-12 will be transferred to the IEPF Fund after the due date i.e., 13.10.2019. As per Section 124 (6), read with the IEPF Rules, the Bank is also required to transfer the related equity shares in respect of which dividends are not claimed for the last 7 consecutive years for credit to IEPF Suspense account in Dematerialized form. In line with the applicable proviso, during the year, the Bank has already transferred 100,131 shares pertaining to the unclaimed dividend for the years 2010-2011 to the IEPF Authority. The details of the unclaimed dividend are uploaded in the website of Investor Education and Protection Fund and in the website of the Bank and the shareholders may verify their details from the said websites and approach us for claim.

99 ANNUAL REPORT 2018 - 2019

As per the IEPF Rules, any person whose shares, unclaimed dividend, unclaimed refund has been transferred to the IEPF fund, may claim the shares under Section 124(6) or apply for refund under Section 125(3) (a), to the authority by submitting an online application in Form IEPF 5 available on the website www.iepf.gov.in. The Bank has also appointed a nodal offi cer for the purpose of coordination with IEPF authority. The contact information of the nodal offi cer is as below and the same also been made available online as per the IEPF Rules and can be accessed at https://www.lvbank.com/shareholder-info.aspx. M.RAMESH, Sr. Manager, Secretarial Department, The Lakshmi Vilas Bank Ltd., Corporate Offi ce, LVB House, No.4, Sardar Patel Road, Guindy, Chennai - 600 032 Ph. No. 044-22205306; Mobile: +91 98427 34513; Email ID: [email protected]

Disclosure under INVESTOR EDUCATION AND PROTECTION FUND (IEPF) Details of the transfer/s to the IEPF made during the year as mentioned below: Amount of unclaimed/unpaid dividend and the corresponding shares; Details given elsewhere in the report Redemption amount of preference shares; Not Applicable Amount of matured deposits, for companies other than banking companies, along Not Applicable with interest accrued thereon Amount of matured debentures along with interest accrued thereon Not Applicable Application money received for allotment of any securities and due for refund along Not Applicable with interest accrued; Sale proceeds of fractional shares arising out of issuance of bonus shares, merger Not Applicable and amalgamation; Details of the resultant beneﬁ ts arising out of shares already transferred to the IEPF Not Applicable The amount of donation, if any, given by the company to the IEPF Nil Such other amounts transferred to the IEPF, if any, during the year Nil

Information in respect of Unclaimed Dividend & Refund and last date for making claim is given below: Unclaimed Dividend: Amount as on Financial Year Date of Declaration Number of Shares Last date for claim 31.03.2019 in ` 2011-12 14.09.2012 4682405 1337830 13.10.2019 2012-13 06.08.2013 4795434 1598478 04.09.2020 2013-14 26.09.2014 1942728 1942728 25.10.2021 2014-15 03.09.2015 4051182 2025591 02.10.2022 2015-16 10.06.2016 5883009 1961003 09.07.2023 2016-17 18.07.2017 5442336 2015680 16.08.2024 2017-18 08.08.2018 Dividend was not declared for the year

Unclaimed Refund: Amount Rights Issue Year Date of Refund Last date for claim as on 31.03.2019 in ` 2014-15 02.09.2014 1,07,700 01.09.2021 2017-18 04.01.2018 4,40,176 03.01.2025

Shares lying in Unclaimed Suspense Account: Records / No. of Particulars Shares shareholders Opening Balance as on April 1, 2018 18 12235 Add: Transfer during the year 2018-19 0 0 Less: Claims received and shares transferred * 0 0 Less: Shares transferred to IEPF account 0 0 Closing Balance as on March 31, 2019 ** 18 12235 * Number of shareholders who approached the Bank for the transfer of shares from the suspense account. ** Voting rights on these shares shall remain frozen till the rightful owners of such shares claim these shares.

100 ANNUAL REPORT 2018 - 2019

Shares held in Electronic form: All instructions regarding bank account details, which the shareholders wish to be incorporated in their dividend warrant will have to be submitted to their depository participants. Instructions already given by them in respect of shares held in physical form will not be automatically applicable to the dividend paid on shares held in electronic form and the Bank or Share Transfer Agent (STA) will not entertain any request for deletion / change of Bank details already printed on dividend warrants. Only those Bank account details as per information received from the depositories will be considered. All instructions regarding change of address, nomination, power of attorney etc., shall be given directly to their depository participants and the Bank or STA will not entertain any such requests at their end. Shareholders having their shareholdings partly in demat form and partly in physical form, should follow the steps narrated above separately.

Other Disclosures: Certiﬁ cate on Corporate Governance: The Bank has complied with conditions of corporate governance prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A Certiﬁ cate to this effect from Practising Company Secretary is available in another part in this Annual report.

Mandatory requirements and adoption of non–mandatory requirements: The Bank complies with all the mandatory requirements with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and amendments thereon. With respect to compliance with Discretionary Requirements as mentioned in Part E of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Bank is in compliance with the following; 1. Being a banking entity, as mandated by Reserve Bank of India's directive, the Bank appoints separate persons to the post of Chairperson and Managing Director & CEO. 2. Apart from internal direct reporting to the appropriate authority, the Internal Auditor also has a lateral reporting line to Audit Committee of the Board.

Certifi cate under Regulation 34 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: Certifi cate from Practicing Company Secretary pursuant to Regulation 34 (3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 that none of the directors on the Board of the company have been debarred or disqualifi ed from being appointed or continuing as directors of companies by the Board / Ministry of Corporate Affairs or any such statutory authority is available in another part in this Annual report.

Disclosures on materially signifi cant Related Party Transactions: During the fi nancial year, the Bank did not enter into any materially signifi cant related party transaction which could have a potential confl ict of interest with its promoters, directors, management or relatives etc., except the transactions entered into in the normal course of banking business.

The Bank's policy on dealing with related party transaction is provided in the website of the Bank and can be viewed at: https://www.lvbank.com/policies.aspx.

Commodity Price Risk or Foreign Exchange Risk and Hedging Activities The details with respect to commodity price risk in terms of SEBI circular no EBI /HO /CFD/CMD1/CIR/P/2018/0000000141 dated 15th November 2018 is as follows: 1) Risk management policy with respect to commodities including through hedging: As the Bank is not exposed to XAU (Gold) and XAG (Silver) price risk, the Bank does not have a Risk Management Policy for commodity price risk.

2) Exposure of the Bank to commodity and commodity risks faced by the Bank during the year is given below: a) Exposure of the listed entity to various commodities: Not Applicable. b) Commodity risks faced by the listed entity during the year and how they have been managed: The Bank did not run any trading positions in XAU (Gold) or XAG (Silver) and does not have exposure to any other commodity.

101 ANNUAL REPORT 2018 - 2019

Penalties or Strictures imposed on matters related to capital markets: There are no penalties or strictures imposed on the Bank by Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets, during the last three years. There were no signiﬁ cant and material orders passed by the regulators, courts, tribunals impacting the going concern status and Bank's operations in future. The Bank has not issued any ADR or GDR during tahe FY of the Annual Report or any earlier FYs. The bank’s equity shares or debt securities have not been suspended from trading by any of the Stock Exchanges.

Fees paid to Statutory Auditors: The total fees for all services paid by the Bank to the Statutory Auditor (no other entities related to the Bank) is provided herein below: Amount in ` Particulars (inclusive of GST) Quarterly review of accounts 7,08,000 Annual Central Audit fee 16,52,000 LFAR Fee 1,18,000 Tax Audit Fee 2,36,000 Fee for branches allotted 13,58,180 QIP certiﬁ cation 8,96,800 Out of pocket 8,54,560 Total 58,23,540

Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013: Details of the number of complaints received, disposed and pending during the year 2018-19 pertaining to sexual harassment of women at workplace, are provided in this report in another part.

Details of utilization of funds raised through preferential allotment or qualifi ed institutions placement as specifi ed under Regulation 32 (7A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: The Bank has utilized the funds raised through qualifi ed institutions placement during FY 2018-19 for the purposes as mentioned in the notice of the Annual General Meeting held on August 08, 2018, wherein the shareholders had approved the raising of funds. There was no Preferential Allotment made during the year under review.

Whistle Blower Policy: The Bank has laid down a Whistle Blower Policy, in line with the regulatory requirements which is available in our Bank’s website at https://www.lvbank.com/policies.aspx. During the year, no person has been denied access to the Audit Committee of the Board.

CEO / CFO Certifi cation: The Compliance certifi cate under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 furnished by the Chief Executive Offi cer and Chief Financial Offi cer has been duly submitted to the Board.

Code of Conduct: The Board of Directors at its meeting held on 15.04.2005, approved the Code of Conduct for all the Directors and Senior Management Personnel, which is available in our Bank’s website at https://www.lvbank.com/code-of-conduct.aspx. This Annual Report contains a declaration signed by the CEO afﬁ rming compliance to the Code of Conduct by Directors and Senior Management Personnel.

DECLARATION BY MD & CEO: The Board of Directors and the Senior Management Personnel of the Bank have afﬁ rmed conﬁ rming to the Code of Conduct of the Bank for the year ended 31.03.2019.

Parthasarathi Mukherjee Managing Director & CEO

102 ANNUAL REPORT 2018 - 2019

Annexure - E ANNUAL REPORT ON CSR ACTIVITIES

In India, the concept of CSR is governed by Section 135 of the Companies Act, 2013. The Ministry of Corporate Affairs has notiﬁ ed Section 135 and Schedule VII of the Companies Act, 2013 as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 to come into effect from April 1, 2014. The Act deﬁ nes CSR as activities that promote poverty reduction, education, health, environmental sustainability, gender equality and vocational skills development.

Vision & Mission Through the CSR projects, our bank intends to contribute in its own small way to the social and economic upliftment of needy individuals / areas, mostly in the places in which it operates.

Scope CSR policy will apply to all projects / programs undertaken as part of the Bank’s Corporate Social Responsibility activities. It will be developed, reviewed and updated by reference to relevant codes of Corporate Governance and International standards (or) best practices while keeping it always in line with the CSR Rules (Sec. 135 of Companies Act, 2013)

Preferred CSR intervention areas The CSR intervention areas will be as prescribed under Section 135 of the Companies Act as amended from time to time with the preferred scope being as below: a) Promoting Education b) Promoting Rural Sports c) Setting up old age homes d) Catering to needs of needy and downtrodden section of society e) Participation in “Swachh Bharat Abhiyan” of Government of India f) Focus on the developmental needs of Girl Children g) Meeting infrastructural requirements of needy Government / Semi-Government educational institutions h) Any other area approved by CSR committee

The Bank’s CSR policy is available on the website https://www.lvbank.com/policies.aspx

Composition of CSR Committee The Bank has a Board-Level CSR committee that provides oversight of CSR policy execution. Our CSR committee comprises:

 Shri B K Manjunath, Chairman

 Shri Parthasarathi Mukherjee, MD & CEO, Member

 Shri Kusuma R Muniraju, Member

 Smt Anuradha Pradeep, Member

103 ANNUAL REPORT 2018 - 2019

Financial details Section 135 of the Companies Act, 2013 and Rules made thereunder prescribe that every company having a net worth of ` 500 crore or more, or turnover of ` 1,000 crore or more or a net profi t of ` 5 crore or more during any fi nancial year shall ensure that the company spends, in every fi nancial year, at least 2% of the average net profi ts made during the three immediately preceding fi nancial years, in pursuance of its Corporate Social Responsibility Policy. The fi nancial details as sought by the Companies Act, 2013 are as follows: Amount unspent in the fi nancial year upto (2017-18) ` 983.54 Lakhs Prescribed CSR expenditure (2% of Average Net profi t) for FY 2018-19 ` 406.87 Lakhs Amount to be spent for FY (18-19) ` 1390.41 Lakhs Amount Spent for FY (18-19) ` 29.97 Lakhs Amount unspent for FY (18- 19) ` 1360.44 Lakhs

CSR activities undertaken by your Bank are as under (Amount in Lakhs)

(1) (2) (3) (4) (5) (6) (7) (8) S. CSR project (or) Sector in Projects or programs Amount Amount spent on Cumulative Amount No. activity identiﬁ ed which the (1) Local area or outlay the projects or expenditure spent: Direct project is other (2) Specify (budget) programs upto to the or through covered the state and district projects or Sub-heads reporting implementing where projects or programs (1) Direct period agency* programs were wise expenditure undertaken. on projects or programs (2) Overheads (inclusive of taxes) 1. Focusing on Catering to Karur, Salem, 6.61 + app. 6.61 6.61 Implementing downtrodden the needs of Bangalore taxes Agency – 5.61 segments needy and Direct – 1.00 downtrodden sections of society 2. Promoting Promotion of Bangalore 10.00 + 10.00 10.00 Direct – 10.00 Education Education app. taxes 3. Health Care Health Care Karur 5.00 + app. 5.00 5.00 Direct – 5.00 taxes 4. Swachh Bharat Swachh Southern Kerala, 8.36 + app. 8.36 8.36 Implementing Abhiyan Bharat Karur, Trichy taxes agency – 1.00 Abhiyan Direct – 7.36 Amount Spent (`) 29.97

* Details of the implementing agencies are listed below:

Swachh Bharat Abhiyan: Kanyakumari District Revenue offi ce Focusing on downtrodden segments: District Revenue offi ce – Trichy & District Revenue offi ce - Salem Bank has done all the preliminary work like identifi cation of priority areas, checking the due diligence etc. so that amount can be spent on CSR activities as per statutory requirements. Further, the bank has decided to set up a foundation named as “LVB Foundation” for carrying out the CSR related activities in a full-fl edged manner. The Bank is well poised to spend the balance amount during the current FY.

Our CSR responsibilities We hereby afﬁ rm that the CSR policy, as approved by the Board, has been implemented and the CSR committee monitors the implementation of the CSR projects and activities in compliance with our CSR objectives.

Parthasarathi Mukherjee B K Manjunath MD&CEO Chairperson, CSR committee

104 ANNUAL REPORT 2018 - 2019

Annexure - F

Particulars pursuant to Section 197(12) of the Companies Act, 2013 and Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Sl. Particulars Disclosure No

1. The ratio of remuneration of each director to MD&CEO : MEDIAN 1.6:1 the median employees remuneration of the Company for the ﬁ nancial year (FY)1

2. The percentage increase in remuneration Mr.Parthasarathi Mukherjee, of each Director, Chief Financial Officer, MD & CEO: NIL Chief Executive ofﬁ cer, Company Secretary Mr.Sundar.S, CFO: NA in the FY Mr.N.Ramanathan, CS: NIL

3. The percentage increase in the median 10.82% remuneration of employees in the ﬁ nancial year

4. The number of permanent employees on the 4557 rolls of company

5. Average percentile increase already made The average percentage increase made in the in the salaries of employees other than the salaries of total employees excluding Managerial managerial personnel in the last financial Personnel for the FY 2018-19 is around 3.54% year and its comparison with the percentile and the average percentage increased in the increase in the managerial remuneration and remuneration of the Managerial Personnel is justiﬁ cation thereof. around -577.16%.

6. Afﬁ rmation that the remuneration is as per the The remuneration paid is as per the remuneration remuneration policy of the Bank policy of the bank

Note: 1 Sitting Fees paid to Non-Executive Directors (` 35,000/- per meeting for the FY 2018-19) has not been considered.

105 ANNUAL REPORT 2018 - 2019 or manager: manager of the of any director or Whether any such company and if so, name of such director employee is a relative s, 2014: Nil No Nil No Nil No Nil No 5753 No 1500 No 6300 No 4050 No 1333 No (2) above meaning of The percentage of company within the the employee in equity shares held by clause (iii) of sub-rule joining the Bank by such employee before The last employment held Vice President & Cluster Vice President & Cluster Head, Royal Bank of Scotland Standard Charted Bank Branch, Bangalore & Branch, Bangalore & Chennai, Axis Bank Mauritius Regional Corporate Head- Transaction Banking, Axis Bank Banker - The Royal Bank of Scotland Corporate Coverage Group, Axis Bank Services, Janalakshmi Financial Service Bank of such The age employee Date of ment of 02.05.2015 53 08.10.2014 45 Senior Associate Director - 27.04.2018 6319.01.2017 Advisor, City Union Bank 57 Head – Corporate Banking Nil No 30.01.2014 5914.09.2016 Treasurer, Bank One Ltd., 57 14.05.2014 4419.01.2018 Vice President & Sr. Private 52 Regional Head – North 05.02.2018 56 CEO – Enterprise Financial 29.09.2014 61 General Manager, Canara commence- employment - fi of and Com, Com, Quali cations employee experience 31 years M.B.A 25 years CA, CAIIB 40 years ICWA, CAIIB 37 years CAIIB 27 years 32 years 22 years 23 years M.Com, CAIIB 31 Years 36 years whether Top ten employees in terms of remuneration drawn Nature of otherwise Employment contractual or received 46,20,333.33 Contractual B.Com, 41,81,311.38 Regular B.Sc 43,10,870.93 Regular B . B . M , 43,69,824.00 Regular B . 52,13,208.00 Regular 49,21,934.42 M.COM, Regular M.Com 55,07,380.07 Regular 52,86,937.11 B.Sc Regular B.A. 58,88,460.00 Regular B.Com, 55,24,838.69 Contractual B.E, CAIIB Remuneration cer fi cer fi Relationship Head - Relationship Head - Karnataka, Corporate Banking Senior Vice President & Head - Operations and Principal Nodal Of - Commercial Banking - Commercial Banking Operations President & Chief Financial Of Head-Treasury Head - Transaction Banking, RMG MSME Head - Retail Banking (Corporate Credit) MSME and Transaction Banking Stressed Assets Name Designation of Employee Mr. Adithya BSMs Neena Anand Regional & President Vice Mr Nachiappan N Sr. Vice President & Head Mr. Sundar.S Mr Gurumurthy R.KMr Manmadha Rao Boyina Sr. Vice President & Sr. Vice President & Mr Peeush JainMr. Sanjay Kumar Rai Sr. Vice President & Senior Vice President Mr Narayanan P President & Head - Mr Meenakshi Sundaram R M President & Head - 7. Information required under Sub Rule (2) of 5 Companies (Appointment and Remuneration managerial personnel)

106 ANNUAL REPORT 2018 - 2019 or manager: Month / Gross manager of the of any director or Whether any such company and if so, name of such director employee is a relative and holds by himself or along manager: Whether any company and if so, name of is a relative of any director or such employee (2) above manager of the such director or meaning of The percentage of company within the the employee in equity shares held by clause (iii) of sub-rule (2) above meaning of The percentage of company within the the employee in equity shares held by clause (iii) of sub-rule joining the Bank by such employee before The last employment held of such The age employee joining the Bank by such employee before The last employment held Date of ment of commence- employment NIL NIL of such The age employee - fi of and Quali cations employee experience Date of ment of commence- employment - fi nancial year or part thereof, was in receipt of remuneration that which, the aggregate, as nancial year and was in receipt of remuneration for that which, fi whether fi Nature of otherwise of and Employment contractual or Quali cations employee experience nancial year and was in receipt of remuneration for any part of that year, at a rate which, in the nancial year and was in receipt of remuneration for any part that year, fi fty thousand rupees per month: fi received whether Remuneration Nature of otherwise Employment contractual or received Remuneration Designation of Employee Employee Designation of Name (Sarvashree) the case may be, at a rate which, in aggregate, is excess of that drawn by Managing Director or Whole Time with his spouse and dependent children not less than two percent of the equity shares Company: aggregate, was not less eight lakh and in the aggregate, was not less than one crore and two lakh rupees: Name (Sarvashree) 9. 9. Employees who were employed part of the

NIL 8. Employees who were employed throughout the 10. Details of every employee, if employed throughout the

107 ANNUAL REPORT 2018 - 2019

Annexure - G Employee Stock Option Schemes (ESOSs) Disclosure Pursuant to the Securities and Exchange Board of India (Share Based Employee Beneﬁ ts) Regulations, 2014 A. Relevant Disclosures in terms of the ‘Guidance Note on accounting for employee share-based payments’ issued by ICAI has been made in Notes to Accounts attached to the Annual Report. B. Diluted EPS on issue of shares pursuant to the Schemes

Diluted earnings per share pursuant to the issue of share on Diluted earnings per share of the company calculated after exercise of options calculated in accordance with AS - 20, considering the effect of potential equity shares arising on account "Earnings Per Share" of exercise of options is ` (34.59)

The details of stock options as on 31st March 2019 under the Employee Stock Option Scheme 2010 and Employee Stock Option Scheme 2017 (“ESOS 2010 & ESOS 2017”):

Scheme Speciﬁ c Disclosures i) General Disclosures: Description of each ESOS that existed at any time during the year, including the general terms and conditions of each ESOS – Sr. Particulars ESOS 2010 ESOS 2017 No. 1 General Information The Employee Stock Option Scheme of The Employee Stock Option Scheme of the Bank known as LVB ESOS 2010 was the Bank known as LVB ESOS 2017 was formulated as per Securities and Exchange formulated as per The Securities and Board of India (Employees Stock Option Exchange Board of India (Share Based Scheme and Employees Stock Purchase Employee Beneﬁ ts) Regulations, 2014. The Scheme) Guidelines, 1999. The scheme scheme was approved by the shareholders was approved by the shareholders to to create, issue, grant / allot to the eligible create, issue, grant / allot to the eligible present and future employees including present and future employees including Directors of the Bank which entitles the Directors of the Bank which entitles the option holders to subscribe to 1 (one) option holders to subscribe to 1 (one) equity equity share of the Bank of ` 10/- each share of the Bank of ` 10/- each and in and in aggregate 5,000,000 equity shares aggregate 5,000,000 equity shares of the of the face value of ` 10/- at such price, face value of ` 10/- at such price, in such in such manner, during such period and manner, during such period and on such on such terms and conditions and in the terms and conditions and in the manner as manner as may be determined by the may be determined by the Board. Board in accordance with the provisions of the applicable laws and the provisions of ESOS 2017. 2 Date of shareholder’s approval August 04, 2010 July 18, 2017 3 Total number of options approved 5,000,000 5,000,000 under ESOS 4 Vesting requirements Options granted under LVB ESOS 2010 Options granted under LVB ESOS 2017 would vest not less than one year and not would vest not less than one year and not more than three years from the date of more than three years from the date of grant of such options grant of such options 5 Exercise price or pricing formula The exercise price shall be the Market The exercise price shall be the Market price of the equity shares discounted price of the equity shares discounted by such percentage not exceeding by such percentage not exceeding 50% as determined by the Nomination, 50% as determined by the Nomination, Remuneration and Compensation Remuneration and Compensation Committee of the Board. Committee of the Board 6 Maximum term of options granted 5 years from the date of vesting 5 years from the date of vesting

108 ANNUAL REPORT 2018 - 2019

Sr. Particulars ESOS 2010 ESOS 2017 No. 7 Source of shares (primary, secondary Primary Primary or combination) 8 Variation in terms of options No options granted during the year No options granted during the year 2018-19 and no variation in terms of 2018-19 and no variation in terms of options options 9 Method used for accounting of ESOS Intrinsic Value method Intrinsic Value method (Intrinsic or fair value) 10 Weighted average exercise price of the No options granted during the year No options granted during the year options whose: 2018-19 2018-19 .exercise price equals market price .exercise price exceeds market price .exercise price is less than market price 11 Weighted average fair value of the No options granted during the year No options granted during the year options whose: 2018-19 2018-19 .exercise price equals market price .exercise price exceeds market price .exercise price is less than market price

A The stock-based compensation cost calculated as per the intrinsic value method for the ﬁ nancial year 2018-19 is ` (19,297,561). If the stock-based compensation cost was calculated as per the fair value method, the total cost to be recognised in the ﬁ nancial statements for the year 2018-19 would be ` 14,742,010. The effect of adopting the fair value method on the net income and earnings per share is presented below:

B Pro Forma Adjusted Net Income and Earning Per Share

Particulars ` Net Income As Reported (8,940,971,228) Add: Intrinsic Value Compensation Cost (19,297,561) Less: Fair Value Compensation Cost 14,742,010 Adjusted Pro Forma Net Income (8,975,010,798) Earning Per Share: Basic As Reported (34.66) Adjusted Pro Forma (34.79) Earning Per Share: Diluted As Reported (34.59) Adjusted Pro Forma (34.72)

109 ANNUAL REPORT 2018 - 2019

C Option Movement during the year 2018-19 Sr. Wt. Avg Remaining Particulars Numbers No. Exercise price Contratual life 1 Options outstanding at the beginning of the year 2,219,431 57.76 5.47 2 Number of options granted during the year - - 3 Options Forfeited / Surrendered during the year 274,779 69.82 4 Options Vested during the year 831,604 50.68 5 Options Exercised during the year 78,149 72.00 6 Options Lapsed during the year 2,625 72.00 7 Total number of shares arising as a result of exercise of options 78,149 - 8 Money realised by exercise of options (` In Lakhs) 56.27 - 9 Options outstanding at the end of the year 1,863,878 55.36 4.53 10 Options exercisable at the end of the year 1,433,261 50.34 4.25

Option Movement during the year 2017-18 Sr. Wt. Avg Remaining Particulars Numbers No Exercise price Contratual life 1 Options outstanding at the beginning of the year 3,100,058 76.61 2 Number of options granted during the year 32,500 74.00 3 Options Forfeited / Surrendered during the year 353,127 74.34 4 Options Vested during the year 908,117 51.32 5 Options Exercised during the year 560,000 63.93 6 Options Lapsed during the year - - 7 Total number of shares arising as a result of exercise of options 560,000 - 8 Money realised by exercise of options (` In Lakhs) 358.00 - 9 Options outstanding at the end of the year 2,219,431 57.76 5.47 10 Options exercisable at the end of the year 708,117 53.19 4.67

The weighted average market price of options exercised during the year 109.48

D Weighted average exercise price of options granted during 2018-19 whose

(a) Exercise price equals market price (`) Nil (b) Exercise price is greater than market price Nil (c) Exercise price is less than market price Nil

Weighted average fair value of options granted during 2018-19 whose (a) Exercise price equals market price (`) Nil (b) Exercise price is greater than market price Nil (c) Exercise price is less than market price Nil

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E Employee-wise details of options granted during the ﬁ nancial year 2018-19 to: (i) Senior managerial personnel

Name Exercise Price (`) No of Options Granted No Options Granted during the year (ii) Employees who were granted, during any one year, options amounting to 5% or more of the options granted during the year % to total options granted during the Name No. of options granted year No Options Granted during the year (iii) Identiﬁ ed employees who were granted option, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant.

Name No. of options granted % to total options granted No Options Granted during the year

F Method and Assumptions used to estimate the fair value of options granted during the year: The fair value has been calculated using the Black Scholes Option Pricing model The Assumptions used in the model are as follows:

Variables Weighted Avg 1. Risk Free Interest Rate 2. Expected Life 3. Expected Volatility No Options Granted During the year 4. Dividend Yield 5. Price of the underlying share in market at the time of the option grant. (`)

Assumptions: Stock Price: Closing price on National Stock Exchange on the date of grant has been considered Volatility: The historical volatility over the expected life has been considered to calculate the fair value. Risk-free rate of return: The risk-free interest rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero-coupon yield curve for Government Securities. Exercise Price: Exercise Price of each specifi c grant has been considered. Time to Maturity: Time to Maturity / Expected Life of options is the period for which the Company expects the options to be live. Expected divided yield: Expected dividend yield has been calculated as an average of dividend yields for fi ve fi nancial years.

Rationale and Assumptions We have reviewed the information made available to us for overall consistency and have not carried out any detailed tests in the nature of audit to establish the accuracy of such information. Accordingly, we assume no responsibility and make no representations with respect to the accuracy or completeness of any information provided by and on behalf of the Company.

111 ANNUAL REPORT 2018 - 2019

Annexure - H Form No. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31st March 2019 [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To The Members Lakshmi Vilas Bank Limited Karur

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s. Lakshmi Vilas Bank Limited (hereinafter called the Bank). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verifi cation of the bank’s books, papers, minute books, forms and returns fi led and other records maintained by the Bank and also the information provided by the Bank, its offi cers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Bank has, during the audit period covering the fi nancial year ended on 31st March 2019, complied with the statutory provisions listed hereunder and also that the Bank has proper Board-processes and compliance- mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns fi led and other records maintained by the Bank for the fi nancial year ended on 31st March 2019 according to the provisions of: i. The Companies Act, 2013 (‘the Act’) and the rules made there under; ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under; iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under; iv. Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) as amended from time to time:- a) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 b) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; c) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; d) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; e) The Securities and Exchange Board of India(Share based Employee Benefi ts) Regulations, 2014; f) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; g) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client, which does not apply to the bank; h) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, which is not applicable as there was no delisting during the year; and i) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998, which is not applicable to the company as there was no buyback during the year; vi. The following laws applicable to the banking companies: a) Bankers’ Books Evidence Act 1891; b) Reserve Bank of India Act 1934; c) Banking Regulation Act 1949;

112 ANNUAL REPORT 2018 - 2019

d) Banking Companies Rules 1949; e) Reserve Bank of India (Amendment and Misc. Provisions) Act 1953; f) Banking companies (Period of preservation of Records) rules 1985; g) Securitization and Reconstruction of Financial Assets and Enforcement of security Interest (SARFAESI) Act 2002; h) Prevention of Money Laundering Act (PMLA) 2002; i) Prevention of Money Laundering (Maintenance of Records, etc) Rules 2005; j) Banking Ombudsman Scheme 2006;

I have also examined compliance with the applicable clauses of the Secretarial Standard 1 and 2 issued by The Institute of Company Secretaries of India. As the bank has not declared dividend during the year, Secretarial Standard 3 is not applicable.

During the period under review the Bank has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

I further report that The Board of Directors of the Bank is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act / SEBI Regulations /RBI directives.

Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent adequately in advance, and a system exists for seeking and obtaining further information and clariﬁ cations on the agenda items before the meeting and for meaningful participation at the meeting. The Minutes of the meetings have recorded the discussions, observations, directions and resolutions of the Board/Board Committees.

I further report that there are adequate systems and processes in the Bank commensurate with the size and operations of the Bank to monitor and ensure compliance with other applicable laws, rules, regulations and guidelines.

I further report that during the Audit Period the Bank had raised ` 459.59 crores through issue and allotment of 6,38,31,328 equity shares of ` 10/- each through Qualiﬁ ed Institutional Placement (QIP) for increasing the capital adequacy ratio in line with RBI norms. The issue and allotment of shares under QIP are in compliance with the applicable regulatory requirements.

I further report that during the period under review, the Bank had allotted 78149 equity shares to eligible employees who had exercised their options under LVB ESOS 2010 scheme. The allotment of shares under LVB ESOS 2010 Scheme are in compliance with the applicable regulatory requirements.

K. MUTHUSAMY Company Secretary in Practice Place : Coimbatore M No: F 5865; CP: 3176 Date : 29.04.2019

113 ANNUAL REPORT 2018 - 2019

Annexure - I DIVIDEND DISTRIBUTION POLICY I. Introduction: The Lakshmi Vilas Bank Limited (“LVB”) is a listed private sector bank incorporated under the provisions of Companies Act and operating under the provisions of the Banking Regulation Act, 1949. As on 31st March, 2017, the equity shares of the Bank are listed and traded in the National Stock Exchange of India Limited (“NSE”) and BSE Limited (“BSE”).

II. Purpose: Being a Banking entity, the Bank is required to ensure compliance with the provisions of the Banking Regulation Act, 1949, guidelines and circulars issued by the Reserve Bank of India on declaration and payment of dividend. Besides the same, being a public limited company listed with NSE and BSE as on 31st March 2019, the Bank is also required to ensure compliance with the provisions of Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, to the extent applicable to Banking Companies in terms of a policy with regard to Dividend Distribution. Accordingly, this policy is framed under Regulation 43 A of the SEBI Listing Regulations, approved and adopted by the Board of Directors of the Bank.

III. Policy: The Policy will be called as `Lakshmi Vilas Bank Dividend Distribution Policy’ and shall be effective from the Financial Year 2016-17.

IV. Criteria for recommending Dividend: The intent of the Bank is to reward the shareholders of the Bank by sharing a portion of the profi ts, whilst also ensuring that suffi cient funds are retained for growth of the Bank. The Bank shall declare and pay dividend only in compliance with the provisions of the Banking Regulation Act, regulatory guidelines/ directions issued by the Reserve bank of India on declaration and payment of dividend by Banks from time to time, the provisions of the Companies Act and SEBI Listing Regulations to the extent applicable to Banking Companies. The term Dividend includes both Interim and Final Dividend. a) Circumstances under which the shareholders may or may not expect dividend: The recommendation of dividend by the Board is dependent on various factors including eligibility criteria imposed by the regulators for recommendation & declaration of dividend, capital and reserve position of the Bank and other key fi nancial parameters. Based on the applicable regulatory framework and fi nancial position, the Board of directors may or may not decide to recommend dividend.

b) Financial and other parameters: The Board of directors would consider the following fi nancial parameters along with the statutory restrictions and directions applicable to Banks before recommending dividend to shareholders: • Profi tability and Key Financial Metrics. • Any interim dividends paid. • Auditors' qualifi cations pertaining to the statement of accounts, if any; • Bank's capital position and requirements as per Internal Capital Adequacy Assessment Process (ICAAP) projections and other regulatory norms. • Any other parameters as may be imposed by the regulators from time to time.

c) Internal and External factors: The Board of Directors of the Bank would take into account both internal and external factors as may be applicable at the time of considering the proposal on the declaration of the dividend. Some of the major aspects are as under: • The state of the economy of the country; • Statutory and regulatory provisions/restrictions;

114 ANNUAL REPORT 2018 - 2019

• Tax regulations including the treatment of deferred tax assets; • Capital market conditions; • Expectation of shareholders; • Business Growth plan of the bank; • Future Capital requirement; • Cost of Raising funds; • Replacement of Capital Assets; • Ability to make timely coupon payments/redemption towards debt instruments issued by the Bank; • Such other factors and material events which the Board may consider as relevant.

d) Utilization of Retained Earnings: The Bank may utilize its retained earnings in the manner beneﬁ cial to the interest of the Bank and its stakeholders. The Bank would utilise the retained earnings for general corporate purposes, including organic growth. The Board may decide to employ the retained earnings in ensuring maintenance of an optimal level of capital adequacy, meeting the Bank's future growth/expansion plans, other strategic purposes and/or distribution to shareholders, subject to applicable regulations.

e) Parameters that shall be adopted with regard to various classes of shares: Since the Bank has only one class of shareholders and does not have any other class of shares (including shares with differential voting rights), the dividend declared will be distributed among the shareholders, based on their shareholding on the record date ﬁ xed for ascertaining the dividend entitlement.

V. Quantum of Dividend payable: The Quantum of dividend payable would be subject to the Bank fulﬁ lling the eligibility criteria set out by the relevant Acts and the Reserve Bank of India and the same shall be decided by the Board of Directors from time to time.

VI. Amendments and Review:- This policy will be reviewed annually by the Board of Directors of the Bank and this Policy will be in force till the time it is not amended or revoked by the Board.

VII. Disclosure:- The policy will be made available in the Bank’s website – www.lvbank.com and will also be disclosed in the Annual Report as required under the SEBI Listing Regulations.

115 ANNUAL REPORT 2018 - 2019

Annexure - J Form No. MGT-9 EXTRACT OF ANNUAL RETURN as on the ﬁ nancial year ended on 31/03/2019 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS: (i) CIN : L65110TN1926PLC001377

(ii) Registration Date : 03/11/1926

(iii) Name of the Company : LAKSHMI VILAS BANK LIMITED

(iv) Category / Sub-Category of the Company : COMPANY LIMITED BY SHARES / INDIAN NON-GOVERNMENT COMPANY

(v) Address of the Registered ofﬁ ce and : SALEM ROAD, KATHAPARAI, contact details KARUR – 639006 TAMIL NADU Tel: 04324 - 258501 Email: [email protected] Website: www.lvbank.com

(vi) Whether listed company : YES (The National Stock Exchange of India Ltd & BSE Ltd)

(vii) Name, Address and Contact details of : INTEGRATED REGISTRY MANAGEMENT SERVICES PRIVATE LIMITED Registrar and Transfer Agent, if any II Floor, ‘Kences Towers’ No.1, Ramakrishna Street, North Usman Road, T.Nagar Chennai – 600 017 Tel: +91 44 28140801/2/3 Fax: +91 44 28142479 Website: www.intergratedindia.in Email: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY: All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sl. Name and Description of NIC Code of the % to total turnover of the No. main products / services Product / service company

1 BANKING 64191 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

Sl. Name and Address of the CIN/ Holding/ Subsidiary/ % of shares Applicable No Company GLN Associate held Section

Not Applicable

116 ANNUAL REPORT 2018 - 2019

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) (i) Category-wise Share Holding:

NO. OF SHARES HELD AT THE BEGINNING NO. OF SHARES HELD AT THE END OF THE YEAR OF THE YEAR % CHANGE CAT DURING CODE CATEGORY OF SHAREHOLDERS % OF % OF DEMAT PHYSICAL TOTAL TOTAL DEMAT PHYSICAL TOTAL TOTAL THE YEAR SHARES SHARES SHAREHOLDING OF PROMOTER A AND PROMOTER GROUP (1) Indian a Individual/Hindu Undivided Family 7182574 0 7182574 2.81 7353121 0 7353121 2.30 -0.51 b Central Government 0 0 0 0 0 0 0 0 0.00 c State Government 0 0 0 0 0 0 0 0 0.00 d Bodies Corporate 15839379 0 15839379 6.19 15385011 0 15385011 4.81 -1.38 e Financial Institutions/Banks 0 0 0 0.00 0 0 0 0 0.00 f Any other(specify) 0 0 0 0.00 0 0 0 0 0.00 SUB TOTAL A(1) 23021953 0 23021953 8.99 22738132 0 22738132 7.11 -1.88 (2) Foreign a Individual(Non resident/foreign) 0 0 0 0.00 0 0 0 0.00 0.00 b Bodies corporate 0 0 0 0.00 0 0 0 0.00 0.00 c Institutions 0 0 0 0.00 0 0 0 0.00 0.00 d Qualiﬁ ed Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00 e Any other(specify) 0 0 0 0.00 0 0 0 0.00 0.00 SUB TOTAL A(2) 0 0 0 0.00 0 0 0 0.00 0.00 Total Shareholding of promoter and 23021953 0 23021953 8.99 22738132 0 22738132 7.11 -1.88 Promoter Group(A)=A(1)+A(2) B Public Shareholding (1) Institutions a Mutual funds/UTI 178000 0 178000 0.07 142 0 142 0.00 -0.07 b Financial Institutions/Banks 8642812 0 8642812 3.38 9209732 0 9209732 2.88 -0.50 c Central Government 418763 0 418763 0.16 518894 0 518894 0.16 0.00 d State Government(s) 0 0 0 0.00 0 0 0 0.00 0.00 e Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00 f Insurance Companies 591904 0 591904 0.23 591904 0 591904 0.19 -0.04 g Foreign Institutional Investors 0 10200 10200 0.00 0 10200 10200 0.00 0.00 h Foreign Venture Capital Investors 0 0 0 0.00 0 0 0 0.00 0.00 i Qualiﬁ ed Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00 Any other (Foreign Portfolio Investor j 17611802 0 17611802 6.88 53593180 0 53593180 16.75 9.87 - Corporate) SUB TOTAL B(1) 27443281 10200 27453481 10.72 63913852 10200 63924052 19.98 9.26 (2) Non-Institutions a Bodies Corporate(Indian/foreign/ 83602920 14251 83617171 32.66 105681430 7451 105688881 33.04 0.38 Overseas) b Individuals(Resident/NRI/Foreign 0 0 0 0.00 0 0 0 0.00 0.00 National) (i) Individual shareholders holding 49806957 8490591 58297548 22.77 50544484 6598747 57143231 17.86 -4.91 Nominal share Capital upto Rs.1 Lakh (ii) Individual shareholders holding 59678314 1042001 60720315 23.72 57542098 638198 58180296 18.19 -5.53 Nominal share Capital above Rs.1 Lakh c Any other (Clearing Member, Corporate Body – Limited Liability Partnership, Corporate CM/TM - Client Margin A/c, Corporate CM/TM-Collateral Account, 2883285 0 2883285 1.13 12228638 0 12228638 3.82 2.69 Corporate CM/TM-Proprietary Account, Limited Liability Partnership, LLP-PMS, Trust-PMS, Trusts) SUB TOTAL B(2) 195971476 9546843 205518319 80.28 225996650 7244396 233241046 72.91 -7.37 Total Public Share Holding 223414757 9557043 232971800 91.01 289910502 7254596 297165098 92.89 1.88 (B)=B(1)+B(2) TOTAL (A)+(B) 246436710 9557043 255993753 100.00 312648634 7254596 319903230 100.00 0.00 C Shares held by Custodians and against which Depository Receipts 0 0 0 0.00 0 0 0 0.00 0.00 have been issued GRAND TOTAL (A)+(B)+(C) 246436710 9557043 255993753 100.00 312648634 7254596 319903230 100.00 0.00

117 ANNUAL REPORT 2018 - 2019

(ii) Shareholding of promoters:

Shareholding at the beginning Shareholding at the end of the year of the year % change in % of shares % of shares Sl. % of total % of total shareholding Shareholder’s Name Pledged / Pledged / No. No. of shares No. of shares during the encumbered encumbered shares of the shares of the year to total to total company company shares shares 1 K R Pradeep 6220378 2.43 0.00 6420378 2.01 0.00 -0.42 2 Anuradha Pradeep 8288 0.00 0.00 8288 0.00 0.00 0.00 3 Kare Electronics and Development Private 1679425 0.66 0.00 1679425 0.53 0.00 -0.13 Limited 4 Pranava Electronics P Ltd 4549952 1.78 0.00 4549952 1.42 0.00 -0.36 5 S G Prabhakaran 5338 0.00 0.00 5338 0.00 0.00 0.00 6 Usha R Prabhakaran 153674 0.06 0.00 153674 0.05 0.00 -0.01 7 G P Prajnesh 18933 0.01 0.00 18933 0.01 0.00 0.00 8 G Sudhakara Gupta 2666 0.00 0.00 2666 0.00 0.00 0.00 9 Sasikaladhevi M R 666 0.00 0.00 0 0.00 NA 0.00 10 Ariston Capital Asset Holdings Private 2463411 0.96 0.96 2463411 0.77 0.64 -0.19 Limited 11 Tangerine Capital Asset Holdings LLP 3149677 1.23 1.23 2694881 0.84 0.84 -0.39 12 XS Real Properties Private Limited 18677 0.01 0.00 18677 0.01 0.00 0.00 13 M P Shyam 180829 0.07 0.00 180829 0.06 0.00 -0.01 14 M S Sharmila 159826 0.06 0.06 159826 0.05 0.05 -0.01 15 M K Panduranga Setty 2761 0.00 0.00 2761 0.00 0.00 0.00 16 P Vasantha 18906 0.01 0.00 21619 0.01 0.00 0.00 17 M S Nivedita 13333 0.01 0.00 13333 0.00 0.00 -0.01 18 Advaith Motors Pvt Ltd 2630020 1.03 0.77 2630020 0.82 0.62 -0.21 19 Cauvery Motors Pvt Ltd 1346345 0.53 0.39 1348645 0.42 0.31 -0.11 20 N Malayalaramamirtham 79634 0.03 0.01 79634 0.03 0.00 0.00 21 M Geetha 20522 0.01 0.00 17522 0.01 0.00 0.00 22 M Balasubramanian 8707 0.00 0.00 8707 0.00 0.00 0.00 23 N Susila 11965 0.00 0.00 11965 0.00 0.00 0.00 24 N Saiprasad 163365 0.06 0.00 134865 0.04 0.00 -0.02 25 N Dwarakanathan 1753 0.00 0.00 753 0.00 0.00 0.00 26 N Sivakumar 76777 0.03 0.00 76777 0.02 0.00 -0.01 27 M Shalini 7633 0.00 0.00 8633 0.00 0.00 0.00 28 V N Jayaprakash 26620 0.01 0.00 26620 0.01 0.00 0.00 29 Shri Gayathri & Co 1872 0.00 0.00 0 0.00 NA 0.00 30 Anirudh P Kare 0 0.00 NA 0 0.00 NA 0.00 31 Parinita P Kare 0 0.00 NA 0 0.00 NA 0.00 32 K R Nagesh 0 0.00 NA 0 0.00 NA 0.00 33 K R Satish 0 0.00 NA 0 0.00 NA 0.00 34 G. Chandralakshmi 0 0.00 NA 0 0.00 NA 0.00 35 M P Vikram Setty 0 0.00 NA 0 0.00 NA 0.00 36 Kare Power Resources Private Limited 0 0.00 NA 0 0.00 NA 0.00 37 Kare Investments Private Limited 0 0.00 NA 0 0.00 NA 0.00 38 Brindavan Hydropower Pvt Ltd 0 0.00 NA 0 0.00 NA 0.00 Innovaneer Realtors Pvt. Ltd. (formerly 39 0 0.00 NA 0 0.00 NA 0.00 Greenbanyan Power Pvt Ltd.) 40 MPrime Premises Pvt Ltd 0 0.00 NA 0 0.00 NA 0.00 41 ILMS Projects Pvt Ltd 0 0.00 NA 0 0.00 NA 0.00 42 ILMS Builders Pvt Ltd 0 0.00 NA 0 0.00 NA 0.00 43 Milestone Plot Developers Pvt Ltd 0 0.00 NA 0 0.00 NA 0.00 44 Pranava DMCC 0 0.00 NA 0 0.00 NA 0.00 45 Pranava City Complex Pvt Ltd 0 0.00 NA 0 0.00 NA 0.00 46 Holzwerk Interior Private Limited 0 0.00 NA 0 0.00 NA 0.00

118 ANNUAL REPORT 2018 - 2019

(ii) Shareholding of promoters: (contd.)

Shareholding at the beginning Shareholding at the end of the year of the year % change in % of shares % of shares Sl. % of total % of total shareholding Shareholder’s Name Pledged / Pledged / No. No. of shares No. of shares during the encumbered encumbered shares of the shares of the year to total to total company company shares shares 47 Alpine Holdings LLP 0 0.00 NA 0 0.00 NA 0.00 48 Chrysalis Play-School LLP 0 0.00 NA 0 0.00 NA 0.00 49 Scotwood Estate LLP 0 0.00 NA 0 0.00 NA 0.00 50 Tangerine Stock Estate LLP 0 0.00 NA 0 0.00 NA 0.00 51 XS Real Properties Service LLP 0 0.00 NA 0 0.00 NA 0.00 52 Acestar Properties Private Limited 0 0.00 NA 0 0.00 NA 0.00 53 Helios Estate Private Limited 0 0.00 NA 0 0.00 NA 0.00 54 Amaryllis Properties Private Limited 0 0.00 NA 0 0.00 NA 0.00 55 Magenta Ceramik Systems Private Limited 0 0.00 NA 0 0.00 NA 0.00 56 Enveedu Properties LLP 0 0.00 NA 0 0.00 NA 0.00 57 Magenta Re Asset Private Limited 0 0.00 NA 0 0.00 NA 0.00 58 Pallava Estate LLP 0 0.00 NA 0 0.00 NA 0.00 59 Holzwerk Jardins Interior LLP 0 0.00 NA 0 0.00 NA 0.00 60 Jacaranda Properties Pvt Ltd 0 0.00 NA 0 0.00 NA 0.00 61 Allbless Tracon Private Limited 0 0.00 NA 0 0.00 NA 0.00 62 Dotmark Vinimay Private Limited 0 0.00 NA 0 0.00 NA 0.00 63 Alllike Marketing Private Limited 0 0.00 NA 0 0.00 NA 0.00 64 Akshara Motors Private Limited 0 0.00 NA 0 0.00 NA 0.00 65 Ananya Software Private Limited 0 0.00 NA 0 0.00 NA 0.00 66 Advaith Spares & Accessories Private 0 0.00 NA 0 0.00 NA 0.00 Limited 67 Advaith Automation Private Limited 0 0.00 NA 0 0.00 NA 0.00 68 Mysore Snack Foods Limited 0 0.00 NA 0 0.00 NA 0.00 69 Mysore Vegetable Oil Products Limited 0 0.00 NA 0 0.00 NA 0.00 70 Advaith Marketing Private Limited 0 0.00 NA 0 0.00 NA 0.00 71 Lathangi Motors Private Limited 0 0.00 NA 0 0.00 NA 0.00 72 Lathangi Automobiles Private Limited 0 0.00 NA 0 0.00 NA 0.00 73 Wilworth Earth Movers Private Limited 0 0.00 NA 0 0.00 NA 0.00 74 Lathangi Cycle And Carriage Private Limited 0 0.00 NA 0 0.00 NA 0.00 75 Wilway Engineering And Constructions 0 0.00 NA 0 0.00 NA 0.00 Private Limited 76 Lathangi Equipments Private Limited 0 0.00 NA 0 0.00 NA 0.00 77 Yashaswini Motors Private Limited 0 0.00 NA 0 0.00 NA 0.00 78 Krishna Industries Private Limited 0 0.00 NA 0 0.00 NA 0.00 79 Venkateshwara Exports 0 0.00 NA 0 0.00 NA 0.00 80 K.V.N Finance 0 0.00 NA 0 0.00 NA 0.00 81 Shri Gayathiri Credit Co 0 0.00 NA 0 0.00 NA 0.00 82 Shri Gayathiri Financiers 0 0.00 NA 0 0.00 NA 0.00 83 Shri Gayathiri Chits 0 0.00 NA 0 0.00 NA 0.00 84 K.N.Viswanatha Chettiyar & Co 0 0.00 NA 0 0.00 NA 0.00 85 Susila Leasings 0 0.00 NA 0 0.00 NA 0.00 86 Gayathiri Finance Corporations 0 0.00 NA 0 0.00 NA 0.00 87 Shri Gayathri Finance & Investments 0 0.00 NA 0 0.00 NA 0.00 88 Dhanesh Chits 0 0.00 NA 0 0.00 NA 0.00 89 Gayathiri Associates 0 0.00 NA 0 0.00 NA 0.00 90 Gayathiri Leasings 0 0.00 NA 0 0.00 NA 0.00 91 Gayathiri Credits 0 0.00 NA 0 0.00 NA 0.00 TOTAL 23021953 8.99 3.43 22738132 7.11 2.46 -1.88

119 ANNUAL REPORT 2018 - 2019

(iii) Change in Promoters’ Shareholding (please specify, if there is no change):

Shareholding at the Cumulative Shareholding Increase / Decrease beginning of the year during the year Sl. NAME % of total % of total % of total No. No. of No. of No. of shares of the shares of the shares of the Shares shares Shares Company Company Company 1 K R Pradeep Opening Balance as on 01/04/2018 6220378 2.43 01/10/2018 Market Purchase 200000 0.08 6420378 2.51 Closing Balance as on 31/03/2019 6420378 2.01 2 Anuradha Pradeep Opening Balance as on 01/04/2018 8288 0.00 No Change Closing Balance as on 31/03/2019 8288 0.00 3 Kare Electronics and Development Private Limited Opening Balance as on 01/04/2018 1679425 0.66 No Change Closing Balance as on 31/03/2019 1679425 0.53 4 Pranava Electronics Pvt Ltd Opening Balance as on 01/04/2018 4549952 1.78 No Change Closing Balance as on 31/03/2019 4549952 1.42 5 S G Prabhakharan Opening Balance as on 01/04/2018 5338 0.00 No Change Closing Balance as on 31/03/2019 5338 0.00 6 Usha R Prabakaran Opening Balance as on 01/04/2018 153674 0.06 No Change Closing Balance as on 31/03/2019 153674 0.05 7 G P Prajnesh Opening Balance as on 01/04/2018 18933 0.01 No Change Closing Balance as on 31/03/2019 18933 0.01 8 G Sudhakara Gupta Opening Balance as on 01/04/2018 2666 0.00 No Change Closing Balance as on 31/03/2019 2666 0.00 9 Sasikaladhevi M R Opening Balance as on 01/04/2018 666 0.00 29/05/2018 Market Sale -666 -0.00 0 0.00 Closing Balance as on 31/03/2019 0 0.00 10 Ariston Capital Asset Holdings Private Limited Opening Balance as on 01/04/2018 2463411 0.96 No Change Closing Balance as on 31/03/2019 2463411 0.77 11 Tangerine Capital Asset Holdings LLP Opening Balance as on 01/04/2018 3149677 1.23 28/09/2018 Off-Market Sale -454796 -0.18 2694881 1.05 Closing Balance as on 31/03/2019 2694881 0.84 12 XS Real Properties Private Limited Opening Balance as on 01/04/2018 18677 0.01 No Change Closing Balance as on 31/03/2019 18677 0.01

120 ANNUAL REPORT 2018 - 2019

21 M Geetha Opening Balance as on 01/04/2018 20522 0.01 09/05/2018 Market Sale -2000 -0.00 18522 0.01 10/05/2018 Market Sale -1000 -0.00 17522 0.01 Closing Balance as on 31/03/2019 17522 0.01 22 M Balasubramanian Opening Balance as on 01/04/2018 8707 0.00 No Change Closing Balance as on 31/03/2019 8707 0.00 23 N Susila Opening Balance as on 01/04/2018 11965 0.00 No Change Closing Balance as on 31/03/2019 11965 0.00 24 N Saiprasad Opening Balance as on 01/04/2018 163365 0.06 14/06/2018 Off-Market Sale -28500 -0.01 134865 0.05 Closing Balance as on 31/03/2019 134865 0.04

121 ANNUAL REPORT 2018 - 2019

(iii) Change in Promoters’ Shareholding (please specify, if there is no change): (contd.) Shareholding at the Cumulative Shareholding Increase / Decrease beginning of the year during the year Sl. NAME % of total % of total % of total No. No. of No. of No. of shares of the shares of the shares of the Shares shares Shares Company Company Company 25 N Dwarakanathan Opening Balance as on 01/04/2018 1753 0.00 31/05/2018 Market Sale -1000 -0.00 753 0.00 Closing Balance as on 31/03/2019 753 0.00 26 N Sivakumar Opening Balance as on 01/04/2018 76777 0.03 No Change Closing Balance as on 31/03/2019 76777 0.02 27 M Shalini Opening Balance as on 01/04/2018 7633 0.00 09/04/2018 Market Purchase 1000 0.00 8633 0.00 Closing Balance as on 31/03/2019 8633 0.00 28 V N Jayaprakash Opening Balance as on 01/04/2018 26620 0.01 No Change Closing Balance as on 31/03/2019 26620 0.01 29 Shri Gayathri & Co Opening Balance as on 01/04/2018 1872 0.00 29/05/2018 Market Sale -1872 -0.00 0 0.00 Closing Balance as on 31/03/2019 0 0.00 30 Anirudh P Kare 0.00 0.00 No Change 0.00 0.00 31 Parinita P Kare 0.00 0.00 No Change 0.00 0.00 32 K R Nagesh 0.00 0.00 No Change 0.00 0.00 33 K R Satish 0.00 0.00 No Change 0.00 0.00 34 G. Chandralakshmi 0.00 0.00 No Change 0.00 0.00 35 M. P. Vikram Setty 0.00 0.00 No Change 0.00 0.00 36 Kare Power Resources Private Limited 0.00 0.00 No Change 0.00 0.00 37 Kare Investments Private Limited 0.00 0.00 No Change 0.00 0.00 38 Brindavan Hydropower Pvt Ltd 0.00 0.00 No Change 0.00 0.00 39 Innovaneer Realtors Pvt. Ltd. (formerly Greenbanyan Power 0.00 0.00 No Change 0.00 0.00 Pvt Ltd.) 40 Mprime Premises Pvt Ltd 0.00 0.00 No Change 0.00 0.00 41 ILMS Projects Pvt Ltd 0.00 0.00 No Change 0.00 0.00 42 ILMS Builders Pvt Ltd 0.00 0.00 No Change 0.00 0.00 43 Milestone Plot Developers Pvt Ltd 0.00 0.00 No Change 0.00 0.00 44 Pranava DMCC 0.00 0.00 No Change 0.00 0.00 45 Pranava City Complex Pvt Ltd 0.00 0.00 No Change 0.00 0.00 46 Holzwerk Interior Private Limited 0.00 0.00 No Change 0.00 0.00 47 Alpine Holdings LLP 0.00 0.00 No Change 0.00 0.00 48 Chrysalis Play-School LLP 0.00 0.00 No Change 0.00 0.00 49 Scotwood Estate LLP 0.00 0.00 No Change 0.00 0.00 50 Tangerine Stock Estate LLP 0.00 0.00 No Change 0.00 0.00 51 XS Real Properties Service LLP 0.00 0.00 No Change 0.00 0.00

122 ANNUAL REPORT 2018 - 2019

(iii) Change in Promoters’ Shareholding (please specify, if there is no change): (contd.) Shareholding at the Cumulative Shareholding Increase / Decrease beginning of the year during the year Sl. NAME % of total % of total % of total No. No. of No. of No. of shares of the shares of the shares of the Shares shares Shares Company Company Company 52 Acestar Properties Private Limited 0.00 0.00 No Change 0.00 0.00 53 Helios Estate Private Limited 0.00 0.00 No Change 0.00 0.00 54 Amaryllis Properties Private Limited 0.00 0.00 No Change 0.00 0.00 55 Magenta Ceramik Systems Private Limited 0.00 0.00 No Change 0.00 0.00 56 Enveedu Properties LLP 0.00 0.00 No Change 0.00 0.00 57 Magenta Re Asset Private Limited 0.00 0.00 No Change 0.00 0.00 58 Pallava Estate LLP 0.00 0.00 No Change 0.00 0.00 59 Holzwerk Jardins Interior LLP 0.00 0.00 No Change 0.00 0.00 60 Jacaranda Properties Pvt Ltd 0.00 0.00 No Change 0.00 0.00 61 Allbless Tracon Private Limited 0.00 0.00 No Change 0.00 0.00 62 Dotmark Vinimay Private Limited 0.00 0.00 No Change 0.00 0.00 63 Alllike Marketing Private Limited 0.00 0.00 No Change 0.00 0.00 64 Akshara Motors Private Limited 0.00 0.00 No Change 0.00 0.00 65 Ananya Software Private Limited 0.00 0.00 No Change 0.00 0.00 66 Advaith Spares & Accessories Private Limited 0.00 0.00 No Change 0.00 0.00 67 Advaith Automation Private Limited 0.00 0.00 No Change 0.00 0.00 68 Mysore Snack Foods Limited 0.00 0.00 No Change 0.00 0.00 69 Mysore Vegetable Oil Products Limited 0.00 0.00 No Change 0.00 0.00 70 Advaith Marketing Private Limited 0.00 0.00 No Change 0.00 0.00 71 Lathangi Motors Private Limited 0.00 0.00 No Change 0.00 0.00 72 Lathangi Automobiles Private Limited 0.00 0.00 No Change 0.00 0.00 73 Wilworth Earth Movers Private Limited 0.00 0.00 No Change 0.00 0.00 74 Lathangi Cycle And Carriage Private Limited 0.00 0.00 No Change 0.00 0.00 75 Wilway Engineering And Constructions Private Limited 0.00 0.00 No Change 0.00 0.00 76 Lathangi Equipments Private Limited 0.00 0.00 No Change 0.00 0.00 77 Yashaswini Motors Private Limited 0.00 0.00 No Change 0.00 0.00 78 Krishna Industries Private Limited 0.00 0.00 No Change 0.00 0.00 79 Venkateshwara Exports 0.00 0.00 No Change 0.00 0.00 80 K.V.N Finance 0.00 0.00 No Change 0.00 0.00 81 Shri Gayathiri Credit Co 0.00 0.00 No Change 0.00 0.00 82 Shri Gayathiri Financiers 0.00 0.00 No Change 0.00 0.00 83 Shri Gayathiri Chits 0.00 0.00 No Change 0.00 0.00 84 K.N.Viswanatha Chettiyar & Co 0.00 0.00 No Change 0.00 0.00 85 Susila Leasings 0.00 0.00 No Change 0.00 0.00 86 Gayathiri Finance Corporations 0.00 0.00 No Change 0.00 0.00 87 Shri Gayathri Finance & Investments 0.00 0.00 No Change 0.00 0.00 88 Dhanesh Chits 0.00 0.00 No Change 0.00 0.00 89 Gayathiri Associates 0.00 0.00 No Change 0.00 0.00 90 Gayathiri Leasings 0.00 0.00 No Change 0.00 0.00 91 Gayathiri Credits 0.00 0.00 No Change 0.00 0.00

123 ANNUAL REPORT 2018 - 2019

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Cumulative Shareholding at the Increase / Decrease Shareholding during the beginning of the year Sl. year NAME % of total % of total % of total No. No. of No. of No. of Shares of the Shares of the Shares of the Shares Shares Shares Company Company Company 1 Belgrave Investment Fund Opening Balance as on 01/04/2018 0 0.00 20/03/2019 QIP 14043100 4.39 14043100 4.39 Closing Balance as on 31/03/2019 14043100 4.39 2 Max Life Insurance Co Ltd Opening Balance as on 01/04/2018 11878179 4.64 06/04/2018 Market Purchase 300000 0.12 12178179 4.76 18/05/2018 Market Sale -250000 -0.10 11928179 4.66 01/06/2018 Market Sale -500000 -0.20 11428179 4.46 08/06/2018 Market Sale -200000 -0.08 11228179 4.39 24/08/2018 Market Purchase 304268 0.12 11532447 4.50 14/09/2018 Market Purchase 100000 0.04 11632447 4.54 05/10/2018 Market Purchase 200000 0.08 11832447 4.62 26/10/2018 Market Sale -200000 -0.08 11632447 4.54 Closing Balance as on 31/03/2019 11632447 3.64 3 DHFL Pramerica Life Insurance Co. Ltd Opening Balance as on 01/04/2018 9186915 3.59 No Change Closing Balance as on 31/03/2019 9186915 2.87 4 Aviator Global Investment Fund Opening Balance as on 01/04/2018 0 0.00 20/03/2019 QIP 8378378 2.62 8378378 2.62 Closing Balance as on 31/03/2019 8378378 2.62 5 M N DASTUR and Co Private Limited Opening Balance as on 01/04/2018 8996133 3.51 06/04/2018 Market Purchase 347004 0.14 9343137 3.65 13/04/2018 Market Purchase 107597 0.04 9450734 3.69 27/04/2018 Market Purchase 69634 0.03 9520368 3.72 01/06/2018 Market Purchase 445477 0.17 9965845 3.89 08/06/2018 Market Sale -2477069 -0.97 7488776 2.93 15/06/2018 Market Purchase 400000 0.16 7888776 3.08 22/06/2018 Market Sale -50000 -0.02 7838776 3.06 29/06/2018 Market Purchase 683230 0.27 8522006 3.33 06/07/2018 Market Purchase 509738 0.20 9031744 3.53 24/08/2018 Market Purchase 38738 0.02 9070482 3.54 05/10/2018 Market Sale -545000 -0.21 8525482 3.33 12/10/2018 Market Sale -65000 -0.03 8460482 3.30 26/10/2018 Market Sale -50000 -0.02 8410482 3.28 01/03/2019 Market Sale -275000 -0.11 8135482 3.18 08/03/2019 Market Sale -125000 -0.05 8010482 3.13 Closing Balance as on 31/03/2019 8010482 2.50

124 ANNUAL REPORT 2018 - 2019

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): (contd.) Cumulative Shareholding at the Increase / Decrease Shareholding during the beginning of the year Sl. year NAME % of total % of total % of total No. No. of No. of No. of Shares of the Shares of the Shares of the Shares Shares Shares Company Company Company 6 Nomura Singapore Limited Opening Balance as on 01/04/2018 4459248 1.74 22/06/2018 Market Sale -33 0.00 4459215 1.74 28/09/2018 Market Sale -100000 -0.04 4359215 1.70 05/10/2018 Market Sale -2005676 -0.78 2353539 0.92 26/10/2018 Market Purchase 135000 0.05 2488539 0.97 08/02/2019 Market Sale -20630 -0.01 2467909 0.96 01/03/2019 Market Sale -114370 -0.04 2353539 0.92 20/03/2019 QIP 5580000 1.74 7933539 2.48 Closing Balance as on 31/03/2019 7933539 2.48 7 Karvy Stock Broking Ltd Opening Balance as on 01/04/2018 11200464 4.38 06/04/2018 Market Purchase 6675 0.00 11207139 4.38 13/04/2018 Market Purchase 10943 0.00 11218082 4.38 20/04/2018 Market Sale -6784 0.00 11211298 4.38 27/04/2018 Market Sale -493 0.00 11210805 4.38 04/05/2018 Market Sale -14409 -0.01 11196396 4.37 11/05/2018 Market Sale -14594 -0.01 11181802 4.37 18/05/2018 Market Sale -3412 0.00 11178390 4.37 25/05/2018 Market Sale -25124 -0.01 11153266 4.36 01/06/2018 Market Sale -13156 -0.01 11140110 4.35 08/06/2018 Market Sale -1099977 -0.43 10040133 3.92 15/06/2018 Market Sale -522626 -0.20 9517507 3.72 22/06/2018 Market Sale -7985 0.00 9509522 3.71 29/06/2018 Market Sale -10649 0.00 9498873 3.71 30/06/2018 Market Purchase 68 0.00 9498941 3.71 06/07/2018 Market Purchase 105025 0.04 9603966 3.75 13/07/2018 Market Purchase 13007 0.01 9616973 3.76 20/07/2018 Market Purchase 9600 0.00 9626573 3.76 27/07/2018 Market Purchase 99983 0.04 9726556 3.80 03/08/2018 Market Sale -12719 0.00 9713837 3.79 10/08/2018 Market Purchase 14670 0.01 9728507 3.80 17/08/2018 Market Purchase 12529 0.00 9741036 3.80 24/08/2018 Market Sale -18748 -0.01 9722288 3.80 31/08/2018 Market Purchase 4131 0.00 9726419 3.80 07/09/2018 Market Purchase 7849 0.00 9734268 3.80 14/09/2018 Market Sale -1717 0.00 9732551 3.80 21/09/2018 Market Purchase 2425 0.00 9734976 3.80 28/09/2018 Market Sale -19049 -0.01 9715927 3.79 05/10/2018 Market Purchase 142216 0.06 9858143 3.85

125 ANNUAL REPORT 2018 - 2019

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): (contd.) Cumulative Shareholding at the Increase / Decrease Shareholding during the beginning of the year Sl. year NAME % of total % of total % of total No. No. of No. of No. of Shares of the Shares of the Shares of the Shares Shares Shares Company Company Company 12/10/2018 Market Sale -10625 -0.00 9847518 3.85 19/10/2018 Market Purchase 9904 0.00 9857422 3.85 26/10/2018 Market Sale -600145 -0.23 9257277 3.62 02/11/2018 Market Sale -134633 -0.05 9122644 3.56 09/11/2018 Market Sale -43806 -0.02 9078838 3.55 16/11/2018 Market Sale -312 -0.00 9078526 3.55 23/11/2018 Market Sale -2807 -0.00 9075719 3.54 30/11/2018 Market Sale -2885 -0.00 9072834 3.54 07/12/2018 Market Purchase 340 0.00 9073174 3.54 14/12/2018 Market Purchase 11236 0.00 9084410 3.55 21/12/2018 Market Purchase 693 0.00 9085103 3.55 28/12/2018 Market Purchase 598416 0.23 9683519 3.78 31/12/2018 Market Purchase 200165 0.08 9883684 3.86 04/01/2019 Market Sale -4605 -0.00 9879079 3.86 11/01/2019 Market Purchase 352095 0.14 10231174 4.00 18/01/2019 Market Purchase 41334 0.02 10272508 4.01 25/01/2019 Market Purchase 60699 0.02 10333207 4.04 01/02/2019 Market Purchase 379433 0.15 10712640 4.18 08/02/2019 Market Purchase 126059 0.05 10838699 4.23 15/02/2019 Market Purchase 15260 0.01 10853959 4.24 22/02/2019 Market Purchase 17402 0.01 10871361 4.25 01/03/2019 Market Sale -11321 -0.00 10860040 4.24 08/03/2019 Market Sale -52611 -0.02 10807429 4.22 15/03/2019 Market Purchase 985738 0.38 11793167 4.61 22/03/2019 Market Purchase 174487 0.05 11967654 3.74 29/03/2019 Market Sale -4758368 -1.49 7209286 2.25 30/03/2019 Market Purchase 402808 0.13 7612094 2.38 Closing Balance as on 31/03/2019 7612094 2.38 India Opportunities Growth Fund Ltd - Pinewood 8 Strategy Opening Balance as on 01/04/2018 0 0.00 20/03/2019 QIP 7000000 2.19 7000000 2.19 Closing Balance as on 31/03/2019 7000000 2.19 9 Eriska Investment Fund Ltd Opening Balance as on 01/04/2018 0 0.00 20/03/2019 QIP 6500000 2.03 6500000 2.03

126 ANNUAL REPORT 2018 - 2019

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): (contd.) Cumulative Shareholding at the Increase / Decrease Shareholding during the beginning of the year Sl. year NAME % of total % of total % of total No. No. of No. of No. of Shares of the Shares of the Shares of the Shares Shares Shares Company Company Company Closing Balance as on 31/03/2019 6500000 2.03 10. Aditya Birla Sun Life Insurance Company Limited Opening Balance as on 01/04/2018 5710657 2.23 25/05/2018 Market Purchase 62094 0.02 5772751 2.26 01/06/2018 Market Purchase 12173 0.00 5784924 2.26 15/06/2018 Market Purchase 200000 0.08 5984924 2.34 Closing Balance as on 31/03/2019 5984924 1.87 11 Plaza Agencies (P) Ltd Opening Balance as on 01/04/2018 5753500 2.25 08/06/2018 Market Sale -1000000 -0.39 4753500 1.86 24/08/2018 Market Sale -50000 -0.02 4703500 1.84 31/08/2018 Market Sale -50000 -0.02 4653500 1.82 07/09/2018 Market Sale -100000 -0.04 4553500 1.78 21/09/2018 Market Sale -50000 -0.02 4503500 1.76 28/09/2018 Market Sale -350000 -0.14 4153500 1.62 28/12/2018 Market Sale -100000 -0.04 4053500 1.58 01/02/2019 Market Sale -150000 -0.06 3903500 1.52 08/02/2019 Market Sale -957046 -0.37 2946454 1.15 15/02/2019 Market Sale -514453 -0.20 2432001 0.95 22/02/2019 Market Sale -325000 -0.13 2107001 0.82 Closing Balance as on 31/03/2019 2107001 0.66 12 Life Insurance Corporation Of India Opening Balance as on 01/04/2018 5471004 2.14 No Change Closing Balance as on 31/03/2019 5471004 1.71 13 Yunus Zia Opening Balance as on 01/04/2018 5242742 2.05 02/11/2018 Market Purchase 5000 0.00 5247742 2.05 17/12/2018 Market Sale -5242742 -2.05 5000 0.00 21/12/2018 Market Purchase 5242742 2.05 5247742 2.05 15/03/2019 Market Sale -5000 -0.00 5242742 2.05 Closing Balance as on 31/03/2019 5242742 1.64 14 EQ Assets Opening Balance as on 01/04/2018 4576050 1.79 29/06/2018 Market Purchase 38425 0.02 4614475 1.80 25/01/2019 Market Sale -200000 -0.08 4414475 1.72 01/02/2019 Market Sale -112000 -0.04 4302475 1.68 Closing Balance as on 31/03/2019 4302475 1.34

127 ANNUAL REPORT 2018 - 2019

(v) Shareholding of Directors and Key Managerial Personnel:

Shareholding at the Cumulative shareholding Increase / Decrease beginning of the year during the year Sl. Name % of total % of total % of total No. No. of No. of No. of Shares of the Shares of the Shares of the Shares Shares Shares Company Company Company 1 B.K. Manjunath Non-Executive Chairman Opening Balance as on 01/04/2018 212839 0.08 No Change Closing Balance as on 31/03/2019 212839 0.07 2 Parthasarathi Mukherjee Managing Director & CEO Opening Balance as on 01/04/2018 480000 0.19 No Change Closing Balance as on 31/03/2019 480000 0.15 3 Y N Lakshminarayana Murthy. Opening Balance as on 01/04/2018 1626 0.00 No Change Closing Balance as on 31/03/2019 1626 0.00 4 Kusuma R Muniraju Opening Balance as on 01/04/2018 410126 0.16 06/04/2018 Market Sale -50000 -0.02 360126 0.14 27/03/2019 Market Sale -104000 -0.03 256126 0.08 28/03/2019 Market Sale -130000 -0.04 126126 0.04 29/03/2019 Market Sale -50000 -0.02 76126 0.02 Closing Balance as on 31/03/2019 76126 0.02 5 Anuradha Pradeep Opening Balance as on 01/04/2018 8288 0.00 No Change Closing Balance as on 31/03/2019 8288 0.00 6 G Sudhakara Gupta Opening Balance as on 01/04/2018 2666 0.00 No Change Closing Balance as on 31/03/2019 2666 0.00 7 H S Upendra Kamath 0.00 0.00 No Change 0.00 0.00 8 N Saiprasad Opening Balance as on 01/04/2018 163365 0.06 14/06/2018 Off-Market Sale -28500 -0.01 134865 0.05 Closing Balance as on 31/03/2019 134865 0.04 9 Suvendu Pati – RBI Nominee 0.00 0.00 No Change 0.00 0.00 10 Rajnish Kumar – RBI Nominee 0.00 0.00 No Change 0.00 0.00 11 S Sundar – Chief Financial Offi cer 0.00 0.00 No Change 0.00 0.00 12 N Ramanathan – Company Secretary 0.00 0.00 No Change 0.00 0.00 13 N Malayalaramamirtham (till 14-01-2019) Opening Balance as on 01/04/2018 79634 0.03 No Change Closing Balance as on 31/03/2019 79634 0.03 14 Hemant Kaul (till 27-03-2019) 0.00 0.00 No Change 0.00 0.00 Note: 1. Wherever the exact dates of Market purchase/sale are not available with us, we have considered the dates on which the statements of benefi cial ownerships are received by us from the depositories through Registrar. 2. Wherever there is change in the percentage but not shares, the same is on account of allotment of shares under Employee Stock Option Scheme and Qualifi ed Institutional Placement during the year 2018-19.

128 ANNUAL REPORT 2018 - 2019

V. INDEBTEDNESS: Indebtedness of the Bank including interest outstanding/accrued but not due for payment. (` in crore)

Secured Loans Unsecured Total excluding Deposits* Loans indebtedness deposits Indebtedness at the beginning of the fi nancial year i) Principal Amount - 4,012.78 - 4,012.78 ii) Interest due but not paid - - - - iii) Interest accrued but not due - 3.61 - 3.61 Total (i+ii+iii) - 4,016.39 - 4,016.39 Change in Indebtedness during the fi nancial year • Addition - 43.23 - 43.23 • Reduction - -3,119.18 - -3,119.18 Net Change - -3,075.95 - -3,075.95 Indebtedness at the end of the fi nancial year i) Principal Amount - 921.26 - 921.26 ii) Interest due but not paid - - - - iii) Interest accrued but not due - 19.18 - 19.18 Total (i+ii+iii) - 940.44 - 940.44

* Since deposits accepted are in ordinary course of banking business, this disclosure is not applicable to the Bank.

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL: A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

Shri Parthasarathi Sl. Total Amount Particulars of Remuneration Mukherjee No. (In `) MD & CEO* 1 Gross Salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 - - (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 7,20,000.00 7,20,000.00 (c) Proﬁ ts in lieu of salary under section 17(3) Income-tax Act, 1961 - - 2 Stock Option - - 3 Sweat Equity - - Commission 4 - as % of proﬁ t - - - others, specify… 5 Others (Entertainment Expenditure, Petrol Expenses & Insurance Premium Payment) 1,27,026.49 1,27,026.49 Total (A) 8,47,026.49 8,47,026.49 Being a banking company regulated by the Reserve Bank of India, the remuneration paid to whole-time directors are subject to prior Ceiling as per the Act approval of RBI. However, the remuneration paid are well within the overall ceiling as per the Companies Act, 2013.

** Salary for MD for the period from April-2018 to March-2019 has been waived by himself.

129 ANNUAL REPORT 2018 - 2019

B. Remuneration to other Directors:

Sl. Name of Director Total Amount Particulars of Remuneration No. (Shri /Smt.) (in `) 1. Honorarium Paid to Part-Time Chairman 12,00,000.00 B K Manjunath Fee for attending Board/Committee Meetings 21,70,000.00 2. Independent Directors • Fee for attending Board/Committee Meetings Y.N.Lakshminarayana Murthy 12,95,000.00 Kusuma R Muniraju 14,70,000.00 Hemant Kaul* 8,05,000.00 H.S.Upendra Kamath 15,40,000.00 • Commission NIL • Others, please specify NIL Total (1) 84,80,000.00 3. Other Non-Executive Directors • Fee for attending Board/Committee Meetings N.Malayalaramamirtham** 11,20,000.00 Anuradha Pradeep 16,80,000.00 G Sudhakara Gupta 16,80,000.00 N Saiprasad*** NIL • Commission NIL • Others, please specify NIL Total (2) 44,80,000.00 Total (B)= (1+2) 1,29,60,000.00 Total Managerial Remuneration (A) + (B) 1,38,07,026.49 Overall Ceiling as per the Act Being a banking company regulated by the Reserve Bank of India, the remuneration paid to whole- time directors or part time chairman or any other directors are subject to prior approval of RBI. The remuneration paid to the MD & honorarium paid to part-time chairman are well within the overall ceiling as per the Companies Act, 2013. No other directors are paid any remuneration.

* Resigned from the Board on 27.03.2019 ** Attained Superannuation on 14.01.2019 *** Appointed to the Board on 30.03.2019

130 ANNUAL REPORT 2018 - 2019

C. Remuneration to Key Managerial Personnel other than MD/MANAGER/WTD:

Key Managerial Personnel Sl. Mr.Sundar S Mr. N.Ramanathan Particulars of Remuneration Total No. Chief Financial Offi cer Company Secretary (In `) (In `) (In `) (a) Salary as per provisions contained in section 17(1) of the Income- 46,20,333.33 24,10,862.50 70,31,195.83 tax Act, 1961 1. (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - - - (c) Profi ts in lieu of salary under section 17(3) Income-tax Act, 1961 - - - 2. Stock Option --- 3. Sweat Equity --- 4. Commission - as % of profi t --- - others, specify… 5. Others (Employers’ Contribution to Provident Fund, Petrol - 1,87,658.50 1,87,658.50 Expenses, Entertainment Expenditure, Medical, Other taxable) Total 46,20,333.33 25,98,521.00 72,18,854.33

VI. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Section of Details of Authority the Brief Penalty / Punishment / [RD / Appeal made, if any Type Companies Description Compounding fees NCLT/ (give Details) Act imposed COURT]

A. COMPANY No penalty was levied under the Companies Act by any Authorities as prescribed. However, the Bank had been levied the following penalties by Reserve Bank of India at separate instances, which are given below:  The Bank was imposed a penalty of Rs.47,800/- on account of defi ciency observed in Specifi ed Bank Notes (SBN) Penalty currency remittances made to RBI by our Branches.  The Bank was imposed a penalty of Rs.20,650/- on account of defi ciency observed in functioning of Currency Chests like mutilated currencies observed in cash remittances to RBI etc., Punishment NIL Compounding B. DIRECTORS Penalty Punishment NIL Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment NIL Compounding

131 ANNUAL REPORT 2018 - 2019

TREASURY DEPARTMENT TECHNOLOGY CENTER The Ruby Towers – 6th ﬂ oor, Navin’s WSS Tower, 8th Floor, Senapati Bapat Marg, Tulsi Pipe Road, No.1, Langs Garden Road (Adithanar Salai), Dadar West, Mumbai 400 028 Pudupet, Email: [email protected] Chennai – 600 002. Phone:022-40925100 Email : [email protected] Phone : 044-66881201 Our Swift Code - LAVBINBB

REGIONAL OFFICES:

BENGALURU CHENNAI No. 93, 2nd Floor, T.K.N. Mansion, K.H. Road Plot No.136, (Double Road), Opp. to KSRTC Head Ofﬁ ce, 2nd Floor, Bengaluru - 560 027. P.M.Towers, Greams Road, Karnataka Chennai - 600 006 Tamil Nadu Email : [email protected] Email : [email protected] Phone : 080-46766300 Phone : 044-40064159

COIMBATORE DELHI LVB Platinum Jubilee Building, Flat. No. 29, Road No. 35, 68, Oppanakara Street, IInd Floor, First Floor, West Punjabi Bagh, Coimbatore - 641 001 Near Shivaji Park Metro Station, Tamil Nadu New Delhi-110 026.. Email : [email protected] Email : [email protected] Phone : 0422-2385800 / 2384001 Phone : 011-45753408 / 45753416

HYDERABAD KARUR No. 2B & 2C, Ground Floor, Aditya Trade Centre, Registered Ofﬁ ce Building, Lane Adjacent to Huda Mythrivanam, 2nd Floor, Ameerpet, Hyderabad - 500 038 Salem Main Road, Kathaparai, Andhra Pradesh Karur - 639 006 Email : [email protected] Email : [email protected] Phone : 040-23759224 / 23759211 Phone : 04324-258501 / 258555

MUMBAI The Lakshmi Vilas Bank Ltd., Regional Ofﬁ ce, The Ruby Towers – 6th ﬂ oor,(A-WING) Senapati Bapat Marg, Tulsi Pipe Road, Dadar West, Mumbai 400 028. Maharashtra. Email : [email protected] Phone : 022-40925000 / 40925050

132 ANNUAL REPORT 2018 - 2019

BRANCH OFFICES ANDHRA PRADESH 67 Vinukonda 124 Kanakapura Main Road (Bengaluru) 1 Addanki - Vijayawada 68 Vishakapatnam 125 Karwar - Bengaluru 2 Adoni 69 Vizianagaram 126 Kengeri (Bengaluru) 3 Amalapuram 127 Kollegal 4 Anakapalle CHATTISGARH 128 Koramangala (Bengaluru) 5 Ananthapur 70 Dhamtari 129 Langford Town (Personal Banking 6 Ananthavarappadu 71 Durg Branch- Bengaluru) 7 Angalakuduru 72 Mahasamund 130 Malleshwaram (Bengaluru) 8 Annamayya Circle (Tirupathi) 73 Raipur 131 Mandya 9 Bhavanipuram 132 Mangaluru 10 Bhimavaram GUJARAT 133 Mudbidri 11 C.Kothapeta 74 Ahmedabad 134 Mysuru 12 Chittoor 75 Anand 135 Puttur 13 Cuddapah 76 Bharuch 136 Raichur 14 Doddavaram 77 Gandhidham 137 Rajarajeshwari nagar (Bengaluru) 15 Dommaranandyala 78 Gandhinagar 138 Ranebennur 16 Dondapadu 79 Jamnagar 139 RT Nagar (Bengaluru) 17 Eluru 80 Navasari 140 Shivamogga 18 Gajuwaka- Hyderabad 81 Rajkot 141 Sirsi 19 Gopalpatnam (Vizag) 82 Sanand (Mumbai) 142 Thippasandra (Bengaluru) 20 Governorpet ( Vijayawada) 83 Surat I 143 Tumakuru 21 Guntur 84 Surat II 144 Udupi - Bengaluru 22 Gurunanak Colony - Vijayawada 85 Vadodara 145 Ulaibettu 23 Jaggaiahpet - Vijayawada 86 Vapi 146 Halasuru 24 Kadiam 147 Vijayanagar (Mysuru) 25 Kakinada HARYANA 148 Vijayapura - Bengaluru 26 Kapavaram 87 Faridabad 149 Vishveswarapura (Bengaluru) 27 Kovvur 88 Gurgaon 150 Yadgir 28 Krishnapatnam 89 Karnal 151 Yelahanka (Bengaluru) 29 Kurnool 90 Panipat 30 Lakshmipuram - Guntur KERALA 31 Lam JHARKHAND 152 Alappuzha 32 Machilipattinam - Vijayawada 91 Jamshedpur 153 Calicut 33 Mangalagiri 92 Ranchi 154 Chalakudy 34 Marichetlapalem 155 Ernakulam (Cochin) 35 Markapur KARNATAKA 156 Guruvayoor 36 MVP Colony (Vishakapatnam) 93 Ballari 157 Kollam 37 Nandigama 94 Bagalkot - Bengaluru 158 Kottayam 38 Nandiyal 95 Banashankari (Bengaluru) 159 Malapuram 39 Narasaraopet 96 Bengaluru-Main 160 Palakkad 40 Narasipatnam - Vijayawada 97 Bangarpet 161 Perumbavoor 41 Nellore 98 Bannerghatta Road – (Bengaluru) 162 Thiruvananthapuram 42 Ongole 99 Basavanagudi (Bengaluru) 163 Thrissur 43 Palasa - Kassibugga 100 Basaveshwaranagar (Bengaluru) 164 Vavvakavu 44 Parvathipuram - Vijayawada 101 Belagavi 45 Pedapulipaka 102 Bellandur (Bengaluru) MADHYA PRADESH 46 Peddapuram - Vijayawada 103 Bommanahalli (Bengaluru) 165 Ashta 47 Piduguralla 104 BTM Layout (Bengaluru) 166 Bhopal 48 Ponnur 105 Byadgi (Bengaluru) 167 Indore 49 Prodattur 106 Cantonment (Bengaluru) 168 Jabalpur 50 Rajamundri 107 Channarayapatna 51 Ramachandrapuram-East Godavari 108 Chikballapur MAHARASHTRA 52 Ravulapalem - Vijayawada 109 Chitradurga 169 Andheri (Mumbai) 53 Ring Road - Vijayawada 110 City market (Bengaluru) 170 Boisar 54 Salur - Vijayawada 111 Davangere 171 Borivili (Mumbai) 55 Sattenapalle - Vijayawada 112 Devanahalli (Bengaluru) 172 Chembur (Mumbai) 56 Sivakodu 113 Dharwad 173 Dombivali -East (Mumbai) 57 Srikakulam 114 Gadag 174 Fort (Mumbai) 58 Sulthanagaram 115 Hassan 175 Ghatkopar (Mumbai) 59 Tadepalli 116 HBR – Layout – (Bengaluru) 176 Kalyan (Mumbai) 60 Tadepalligudam 117 Honnasandra 177 Kandivali east (Mumbai) 61 Tanuku 118 Hosapete 178 Khar 62 Tenali 119 HSR Layout (Bengaluru) 179 Kharghar (Mumbai) 63 Thimmapuram 120 Hubballi 180 Kolhapur 64 Thurputallu 121 Jalahalli (Bengaluru) 181 Malad(west) (Mumbai) 65 Tirupathi 122 Jayanagar (Bengaluru) 182 Matunga (Mumbai) 66 Vijayawada 123 Kalaburagi 183 Mulund West (Mumbai) 184 Nagpur

133 ANNUAL REPORT 2018 - 2019

185 Nasik 243 Bhuvanagiri 312 Kaveripattinam 186 Nerul (Mumbai) 244 Bibikulam (Madurai) 313 KK Pudur (Coimbatore) 187 Panvel (Mumbai) 245 Bodinayakanur 314 Kodambakkam (Chennai) 188 Pune 246 Bye Pass Road, Madurai 315 Kolappakam (Chennai) 189 Thane (Mumbai) 247 C. Pudupatti 316 Kolathur (Chennai) 190 Vasai (Mumbai) 248 C.K.Street (Salem) 317 Kombai 191 Vashi (Mumbai) 249 Cantonment (Trichy) 318 Kondalampatti (Salem) 250 Cathedral Road (Chennai) 319 Kondamanaickenpatty NEW DELHI 251 Chellapillaikuttai (Salem) 320 Kondikulam 192 Ashok vihar (New Delhi ) 252 Chengalpattu 321 Koodalnagar (Madurai) 193 Chandigarh (New Delhi) 253 Chennai-Main 322 Kottivakkam (Chennai) 194 Jamukoli 254 Cheyyar (Chennai) 323 Koundampalayam (Coimbatore) 195 Janpath (New Delhi) 255 Chidambaram 324 Kovaipudur (Coimbatore) 196 Kalkaji (New Delhi) 256 Chinna Salem 325 Kovilpatti 197 Karolbagh (New Delhi) 257 Chinnadharapuram 326 Krishnagiri 198 Krishnanagar (New Delhi) 258 Chinthalavadi 327 Kulithalai 199 Ludhiana 259 Chittode 328 Kumbakonam 200 Mahavir Nagar (New Delhi) 260 Chrompet (Chennai) 329 Kuniyur 201 Rohini (New Delhi) 261 Coimbatore - MAIN 330 Kurumbapatti 202 Shalimar Bagh (New Delhi) 262 Cuddalore 331 La Gudalur 263 Cumbum 332 Lakkapuram ODISHA 264 Denkanikottai (Salem) 333 Lalgudi 203 Bhubaneshwar 265 Devakottai (Madurai) 334 M.N.Palayam 204 Cuttack 266 Dharapuram 335 M.Puthur 205 Jharsuguda (Delhi) 267 Dharmapuri 336 Madipakkam (Chennai) 206 Majhihara 268 Dindigul 337 Madukkur North 269 Eachanari(Coimbatore) 338 Madurai Main PUDUCHERY 270 Erode 339 Mahadhanapuram 207 Ambagarathur 271 Four road ( Kumbakonam) - Karur 340 Manamedu 208 Karaikal 272 G.N.Street (Chennai) 341 Manapparai 209 Lawspet (Puduchery) 273 Ganapathy (Coimbatore) 342 Mangarai 210 Puducherry 274 Gandhigramam (Karur) 343 Mannargudi 211 Reddiyarpalyam (Puduchery) 275 Gandhimanagar (Coimbatore) 344 Marakkottai 276 Gandhipuram (Coimbatore) 345 Marandahalli RAJASTHAN 277 Gingee 346 Markkampatti 212 Bhilwara 278 Gobichettipalayam 347 Mathur (Erode) 213 Jaipur 279 Gopalapatti 348 Mathur (Krishnagiri) 280 Guduvancheri (Chennai) 349 Mayiladuthurai TAMILNADU 281 Gugai (Salem) 350 Mecheri 214 Abhiramapuram(Personal Banking 282 Hastampatti (Salem) 351 Melur Branch- Chennai) 283 Hosur 352 Mettupalayam 215 Adambakkam (Chennai) 284 Idayakottai 353 Mettur Dam 216 Adyar (chennai) 285 Iyyampalayam 354 Michalpatti 217 Alathur 286 J.Veeranam 355 Mogappair (Chennai) 218 Ambasamudram 287 Jalakandapuram 356 Mohanur 219 Ambattur (Chennai) 288 Jegadabi 357 Moolangudi 220 Ambilikai 289 K K Nagar (Chennai) 358 Moolapalayam(Erode) 221 Ambur 290 K.Vadamadurai (Coimbatore) 359 Mount Road (Chennai) 222 Ammapet (Salem) 291 Kachirapalayam 360 Mowlivakkam(Chennai) 223 Anaindaperumal Nadanur (Madurai) 292 Kadalangudi 361 Mudhugampatti 224 Anbil 293 Kadambuliyur 362 Muthugapatty 225 Anna Nagar (Chennai) 294 Kalangani 363 Muthupet 226 Anna Nagar (Madurai) 295 Kallakurichi 364 Muthur 227 Annur 296 Kallalangudy 365 Mylambadi 228 Arakandanallur 297 Kambarasampettai 366 Mylapore (Chennai) 229 Arakonam (Chennai) 298 Kancheepuram 367 Nagankulam (Madurai) 230 Arantangi 299 Kandili 368 Nagapattinam 231 Arasappapillaipatti 300 Kangayam 369 Nagercoil 232 Arcot (chennai) 301 Kangayam Road -TUP (Coimbatore) 370 NaickerNew Street ( Madurai) 233 Ariyalur 302 Kanjampatti 371 Namakkal 234 Arni 303 Kanmai Soorangudi 372 Nathakadaiyur 235 Aruppukkottai 304 Karaikudi 373 Nathamedu 236 Attur 305 Karanodai 374 Nedumpuli 237 Avadi (Chennai) 306 Karur Main (Karur) 375 Neelagiri (Thanjavur) - Karur 238 Avalpoondurai 307 Karur West (Karur) 376 Nerinjipettai 239 Ayothiapattinam (Salem) 308 Kathaparai (Karur) 377 Neyveli 240 Balasamudram 309 Kattugudalur 378 Nidur 241 Bargur 310 Kattuputhur 379 Nungambakkam (Chennai) 242 Batlagundu 311 Kavaraipettai (Chennai) 380 Oddanchathram

134 ANNUAL REPORT 2018 - 2019

381 Olapalayam 450 Thillai Nagar (Trichy) 517 Hyderabad Main 382 Ondipudur (Coimbatore) 451 Thimmanandal 518 Jadcherla 383 Othakadai(Madurai) 452 Thindal 519 Jagtial 384 P.Ayeepalayam 453 Thirukattupalli 520 Jammikunta (Hyderabad) 385 Palacode 454 Thirumangalam 521 Jangaon 386 Palani 455 Thiruvaiyaru 522 Karim Nagar 387 Palayamkottai 456 Thiruvallur(Chennai) 523 Karmanghat (Hyderabad) 388 Pallipalayam 457 Thiruvarur 524 Kesamudram (Hyderabad) 389 Panruti 458 Thiruvidaikazhi 525 Khammam 390 Papanad 459 Thittagudi 526 Kompally 391 Papanasam 460 Thokkavadi 527 Kothapeta (Hyderabad) 392 Pattukottai 461 Thorapakkam (Chennai) 528 Kukatpally (Hyderabad) 393 Peelamedu (Coimbatore) 462 Thottiyam 529 Luxettipet (Hyderabad) 394 Pennagaram 463 Tindivanam 530 Madhapur (Hyderabad) 395 Perambalur 464 Tirpur 531 Malipuram (Hyderabad) 396 Perambur(Chennai) 465 Tiruchengode 532 Malkajgiri (Hyderabad) 397 Peravurani 466 Tirukadaiyur 533 Mallemadugu 398 Periyakulam 467 Tirukoilur 534 Mancherial 399 Perungalathur(Chennai) 468 Tirunelveli Town 535 Mehabubnagar 400 Podakudy 469 Tiruthuraipoondi 536 Mehdipatnam (Hyderabad) 401 Pollachi 470 Tiruvannamalai 537 Miryalguda 402 Pothuravuthanpatty (Karur) 471 Tiruvottriyur (Chennai) 538 Nalgonda 403 Pudukkottai 472 Trichy (Main) 539 Navandgi 404 Pugalur 473 Triplicane (Chennai) 540 New Gaddianaram (Hyderabad) 405 Puliyakulam(Coimbatore) 474 Turaiyur 541 Nizamabad 406 Punavasal East 475 Tuticorin 542 Peruvancha 407 Purasawalkam (Chennai) 476 Udayamarthandapuram 543 PG Road (Hyderabad) 408 R S Puram(Coimbatore) 477 Udumalpet 544 Ponnal 409 R.Pudupatti 478 Ulipuram 545 Punjagutta(Hyderabad) 410 Rajapalayam 479 Unjalur 546 Ramachandrapuram (Hyderabad) 411 Rajendram 480 Upilipalayam (Coimbatore) 547 Sadasivet (Hyderabad) 412 Ramanathapuram 481 Uranganpatti 548 Secundrabad (Hyderabad) 413 Ramanathapuram (Coimbatore) 482 Uttamarkoil(Trichy) 549 Seethaphalmandi (Hyderabad) 414 Ramapuram(Chennai) 483 Vadavalli(Coimbatore) 550 Sircilla(Hyderabad) 415 Rasipuram 484 Vadugapalayam 551 Suryapet 416 Rayakotta 485 Valasarawalkam (Chennai) 552 Vanasthalipuram 417 Royapuram (Chennai) 486 Velacherry (Chennai) 553 Vikarabad(Hyderabad) 418 Saidapet(Chennai) 487 Vellakoil 554 Vikrampuri (Hyderabad) 419 Salem Town 488 Velliyani 555 Warangal 420 Saligramam (Chennai) 489 Vellore (NA) 556 West Maredpally (Hyderabad) 421 Sambankulam 490 Velur (Namakkal) 422 Sankarapuram 491 Vengaivasal(Chennai) UTTAR PRADESH 423 Sankari 492 Vengamedu (Karur) 557 Ghaziabad 424 Sathyamangalam 493 Venjuvancheri(Chennai) 558 Noida 425 Sattur 494 Venkatakrishnapuram 426 Seevalaperi (Satellite branch) 495 Vettavalam WEST BENGAL 427 Selaiyur (Chennai) 496 Vichoor (Chennai) 559 Garia 428 Sendarapatti 497 Vilangudi 560 Kolkata 429 Senthamangalam (Salem) 498 Villapuram (Madurai) 561 Kolkata - New Alipur 430 Shevapet (Salem) 499 Villivakkam (Chennai) 562 Salt Lake-Kolkata 431 Siddhapudur (Coimbatore) 500 Villupuram 432 Sikkal 501 Virudhunagar COMMERCIAL BANKING BRANCHES 433 Sindalapatti 502 Vridhachalam 563 Bengaluru - Langford Town 434 Sirumayangudi 503 West Mambalam (Chennai) 564 Chennai - Cenotaph Road 435 Sivakasi 504 West Tambaram (Chennai) 565 Coimbatore - Avinash Road 436 South Masi Street(Madurai) 505 Yethapur 566 Delhi - Karol Bagh 437 Sriperumbudur(Chennai) 567 Hyderabad - Srinagar Colony 438 Srirangam (Trichy) TELANGANA 568 Karur - Kathaparai, Salem Main Road 439 Srivilliputhur 506 A.S Rao Nagar (Hyderabad) 569 Mumbai - Fort Mumbai 440 Sundarapandiam 507 Adilabad 441 Suramangalam (Salem) 508 Alwal - Secundrabad 442 Surandai (Madurai) 509 Ameerpet (Hyderabad) 443 Swarnapuri (Salem) 510 Asifabad 444 T.Nagar (Chennai) 511 Atevelle 445 Tanjore 512 Banjara Hills (Hyderabad) 446 Tenkasi 513 Bhupalpalle (Hyderabad) 447 Thallakulam (Madurai) 514 Boduppal 448 Thayanur 515 Habsiguda (Hyderabad) 449 Theni 516 Hanumakonda

135 ANNUAL REPORT 2018 - 2019

A DECADE OF PROGRESS (Amount given in Lacs)

Year 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Paid-up Capital 9750.87 9752.58 9752.58 9754.07 9756.07 17916.67 17946.16 19144.67 25599.38 31990.32

Reserve & Surplus 64148.86 79490.91 86083.93 91680.38 95603.85 137697.60 158413.25 194489.50 207167.45 157267.31

Deposits 907537.77 1114951.07 1411414.00 1561897.79 1857288.21 2196421.22 2543096.15 3055335.35 3330948.29 2927944.08

Advances 627749.52 809442.28 1018867.97 1170279.56 1288918.96 1635201.90 1964373.90 2372891.14 2576820.17 2010325.93

Investments 298322.23 351885.03 439511.80 432454.68 568867.76 605115.62 654540.46 865173.03 1076774.83 843016.53

Net Proﬁ t / Loss 3066.80 10113.68 10702.22 9157.45 5965.55 13228.59 18023.58 25607.21 -58486.61 -89409.71

Number of 271 274 290 291 361 400 460 Branches 481 548 569

Staff Position 2655 2626 3054 3149 3292 3459 3565 4043 4623 4557

Earning Per Share 4.95 10.37 10.97 9.39 6.11 9.16 10.05 14.07 -28.29 -34.66 (`)

Book Value (`) 75.79 83.23 90.14 92.88 100.16 82.48 88.70 102.74 84.39* 53.48*

Market Price 79.21 98.00 85.05 81.35 71.15 101.60 81.15 166.40 98.50 71.00

Dividend Per 0.60 2.50 3.50 3.00 1.00 2.00 3.00 2.70 Nil Nil Share (`)

* Book value, adjusted for DTA / intangible assets, stood at ` 64.18 (31.03.2018) and ` 25.08 (31.03.2019).

136