Schedule -17

NOTES ON ACCOUNTS FORMING PART OF BALANCE SHEET & PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2022

I . SIGNIFICANT ACCOUNTING POLICES :

1. GENERAL : The financial statements are prepared under historical cost convention and in accordance with the generally accepted accounting principles.

   
   

2. FIXED ASSETS : Fixed assets are accounted on historical cost basis and depreciation is provided on WDV method as per the rates specified under the Income Tax Rules 1962.

   
   

3. INVESTMENTS : Investments under “held to maturity” category are shown at cost. The excess cost of acquisition, if any, is amortised over the remaining period of maturity and the premium shown under the assets side of balance sheet represents premium net of amortisation. As per RBI guidelines, Investments under HFT & AFS categories are “marked to market”.

   
   

4. INCOME AND EXPENDITURE : All income and expenditure items having material bearing on the financial statements are accounted for on accrual basis except ;

   1. Commission, Exchange

   2. Interest on N.P.A.

      
      

5. ADVANCES : Advances are classified as Performing and Non Performing Assets and provisions are made in accordance with prudential norms prescribed by R.B.I.

   
   

6. RETIREMENT BENEFITS :

1. GRATUITY : Bank’s liability towards gratuity is covered by a group gratuity scheme with LIC of India and the actual premium is being paid out of provision made annually on accrual basis.

2. PROVIDENT FUND : Contributions are accounted for on accrual basis.

3. LEAVE ENCASHMENT : Provision for leave encashment is accounted for on accrual basis.

1. NOTES ON ACCOUNTS :

   1. PRIOR PERIOD ITEMS : (Accounting Standard 5 )

      There were no prior period items of Income / Expenditure of any material amount during the year, requiring disclosures.

   2. REVENUE RECOGNITION : (Accounting Standard 9 )

      Certain items of income are recognized on cash basis (refer Accounting Policy (d) above)

   3. Interest payable on deposits includes an amount of Rs. 20,74,373 representing earlier years interest on term deposits matured but not renewed.

   4. Though some of the advances in respect of which moratorium has been granted in accordance with RBI circular DOR.No. BP.BC.47/21-04-048/2019-20 dated 27.03.2020 (Residuary Package), have slipped into NPA, regular NPA provision in respect of the same has been made thereby keeping intact the General Provision of 10% made in this regard.

   5. DEFERRED TAX ASSETS & LIABILITES : (Accounting Standard- 22 )

      The Bank has on opening net DTA of Rs 71,54,692/- as on 01.04.2021. Whereas net DTA of Rs 7,79,232 has been increased by crediting to Profit and Loss account as on 31.03.2022.

      Major components of deferred tax assets and liabilities are as under :

      Particulars Deferred Tax Assets Deferred Tax Liabilities

      
      

      W D V of fixed assets	-----	12,07,924
      Gratuity Fund	29,70,679	-----
      Employees Privilege-
      Leave Fund	61,71,169	----
      	--------------	--------------
      	91,41,848	12,07,924

      
      

   6. IMPAIRMENT OF ASSETS : (Accounting Standard 28 )

      In the opinion of the Management, there is no impairment of the assets of the bank as on 31.03.2022 to a material extent requiring disclosure.

      
      

   7. CONTINGENT LIABILITIES : 2021-22      2020-21

Cont..2

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III DISCLOSURE OF OTHER INFORMATION (As per Cir. March 25,2014 has been Issued By

Reserve Bank Of India)

1. Capital to Risk Weight Asset Ratio (CRAR) : 14.64%

   
   

2. Movement of CRAR : 31.03.2022 : 14.64%

   31.03.2021 : 13.38%

3. Investments: Book Value Face Value

   1. Book value and face value of investments : Rs. 248,00,66,826 247,78,60,000

   2. Market value of investments : Rs.255,80,47,042

   3. Details of Non- SLR and Non Performing Non SLR Investments Issuer Composition of Non SLR Investment

      No	Issuer	Amount	Extent of ‘below investment grade Securities’	Extent of ‘unrated Securities’	Extent of ‘unlisted Securities’
      1	PSUs	nil
      2	FIs	nil
      3	Public Sector Banks	nil
      4	Mutual Funds	nil
      5	Others (Shares in Cooperative Institutions)	Rs.12,630
      6	Provision Held towards Depreciation	nil

      • Non-Performing Non SLR Investments : Nil

4. Advances against real estate, construction business , housing : Rs. 12,56,23,532

5. Advances against shares and debentures : Nil

6. Advances to directors , their relatives, companies /firms in which they are interested

   1. Fund based : Nil

   2. Non fund based(guarantees,L/C etc) : Nil

7. Cost of Deposits: Average cost of deposits :6.88%

8. NPAs :

   a) Gross NPAs : Rs. 44,52,45,635

   b) Net NPAs : Rs. 15,25,89,835

9. Movement in NPAs :

   Gross NPAs : 31.03.2022 Rs. 44,52,45,635 6.22%

   31.03.2021 Rs. 45,52,46,141 6.78%

   
   

   Net NPAs: 31.03.2022 Rs.15,25,89,835 2.22%

   31.03.2021 Rs 19,20,22,115 2.98%

10. Profitability :

    1. Interest income as a percentage of working funds : 9.73%

    2. Non-interest income as a percentage of working funds: 0.11%

    3. Operating profit as a percentage of working funds : 2.66%

    4. Returns on Assets(Net profit/Net Assetsx100) : 0.89%

    5. Business (Deposit+Advances) per employee : Rs. 12,85,82,145

    6. Profit per Employee : Rs. 7,43,540

       
       

11. Provisions made towards NPAs , depreciation on investments,

    Standard assets : Rs. 35,65,56,104

12. Movements in provisions:

    a) Towards NPAs : 31.03.2022 Rs. 29,26,55,799

    31.03.2021 Rs. 26,32,24,026

    
    

    1. Towards depreciation on investments: 31.03.2022 Rs. 0.00

       31.03.2021 Rs. 0.00

       
       

    2. Towards Standard assets : 31.03.202 Rs. 6,39,00,305

    31.03.2021 Rs. 4,30,00,000

    
    

13. Foreign currency asset and liabilities: Nil

14. Payment of DICGC Insurance premium and arrears 2021-2022 : Yes . No arrears

15. Penality imposied by RBI : Nil

16. Restructured accounts : Nil

    
    

17. Fixed Assets - Valuation/Revaluation : Nil Cont..3

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(Sd/-) C.Sugunarao (Sd/-)CA.K.V.V.Satyanarayana (Sd/-) Thota M.S.Sudheer CHIEF EXECUTIVE OFFICER DIRECTOR VICE-PRESIDENT

(Sd/-) Chitturi Ravindra

PRESIDENT AS PER OUR REPORT OF EVEN DATE

for RAVI SARMA & CO.,

Chartered Accountants

Place: Kakinada. (Sd/-)

Date :11.06.2022 (CA. V. Ravi Sarma) Partner

M.No. 026923

FRN: 015606 S

UDIN: 22026923AKTHSE4479