board of directors€¦ · deposits grew by 15.78%, from $ 21,964.21 crores as at 31st march 2015...

Shri K. BABUJIRBI Nominee

BOARD OF DIRECTORS

Shri PARTHASARATHI MUKHERJEE Managing Director & CEO

Shri D.L.N. RAO Shri K.R. PRADEEP

Shri S.G. PRABHAKHARAN Shri S. DATTATHREYAN Shri P.A. SHANKAR

Shri N. MALAYALARAMAMIRTHAM Shri PANKAJ VAISH Shri PRAKASH P MALLYA

Smt. E.V. SUMITHASRI Shri SUVENDU PATIRBI Nominee

ANNUAL REPORT 2015 - 2016

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BOARD OF DIRECTORSShri. / Smt.

Parthasarathi Mukherjee - Managing Director & CEO

D.L.N.Rao

K.R.Pradeep

S.G.Prabhakharan

S.Dattathreyan

P.A.Shankar

N.Malayalaramamirtham

Pankaj Vaish

Prakash P Mallya

E.V.Sumithasri

K.Babuji - RBI Nominee

Suvendu Pati - RBI Nominee

PRESIDENT & CHIEF FINANCIAL OFFICER

M. Palaniappan

PRESIDENTS

A.J.Vidyasagar

RM.Meenakshisundaram

COMPANY SECRETARY

N. Ramanathan

SENIOR VICE-PRESIDENT

RM.Kumarappan

R.Kamalasekaran

A.Shankar

R.K.Gurumurthy

P.Premkumar

Peeush Jain

Ashok Kumar Pareek

B.Nedumaran

Sudhir Kaushik

V.Madhusudhana Rao

STATUTORY AUDITOR

M/s. R.K. Kumar & Co.Chartered AccountantsChennai(Firm’s Registration No. 001595S)

SECRETARIAL AUDITOR

K.Muthusamy,Practicing Company SecretaryCoimbatore(M.No.F 5865; CP:3176)

REGISTERED OFFICESalem Road, Kathaparai, Karur-639 006, TamilnaduPhone: 04324-220051 to 220060 (10 lines)Website: www.lvbank.comE-Mail: [email protected]

CORPORATE OFFICE

"LVB HOUSE", No. 4, Sardar Patel Road,Guindy, Chennai - 600 032TamilnaduPhone: 044 - 22205306

REGISTRAR AND SHARE TRANSFER AGENT

M/s. Integrated Enterprises (I) LimitedII Floor, "Kences Towers",No.1, Ramakrishna Street,North Usman Road, T. Nagar,Chennai - 600 017.Phone: 044-28140801/2/3 Fax: 28142479Email: [email protected]

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CONTENTS Page No.

Report of Directors 3

Report of Auditors 13

Balance Sheet 16

Profit & Loss Account 17

Schedules 18

BASEL III - Pillar 3 Disclosures 49

Cash Flow Statement 71

Auditor’s Certificate 72

A Decade of Progress 122

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DIRECTORS’ 89th ANNUAL REPORTTO

THE MEMBERS

The Directors of your Bank have great pleasure in presenting this 89th Annual Report on the business and operations of your Banktogether with the Audited Accounts for the year ended 31st March, 2016 (FY 2015-16).

1. FINANCIAL PERFORMANCE

The highlights of the financial performance of your Bank for the year ended 31st March, 2016 are as under:

For the year ended($ in crore)

31st March 2016 31st March 2015

Deposits 25,430.96 21,964.21

Advances (net) 19,643.74 16,352.02

Investments (net) 6,545.40 6,051.15

Total Income 2,872.83 2,498.56

Operating Profit 407.12 368.41

Provisions & Contingencies 226.88 236.12

Net profit 180.24 132.29

Your bank registered appreciable growth in business volumes that compares very favorably with the industry average. The Bankattained total business of $ 45,074.70 crores in FY 2015-16 a growth of 17.64% over $ 38,316.23 Crores in FY 2014-15.

Deposits grew by 15.78%, from $ 21,964.21 Crores as at 31st March 2015 to $ 25,430.96 crores as at 31st March 2016, and totaladvances (net) expanded by 20.13%, from $ 16,352.02 Crores to $ 19,643.74 crores in FY 2015-16.

Of this, lending to Priority Sector rose from $ 5,849.89 Crores in the previous year to $ 7,349.81 Crores as on 31st March 2016.Agricultural Advances rose to $ 3,086.15 Crores from $ 2,457.18 Crores and advances to Weaker Section exposure rose from$ 1,712.77 Crores to $ 1,772.02 Crores.

The Bank's exposures to sensitive sectors including Real Estate and Capital Market were maintained well within the regulatorylimits.

As at the end of the year under review, the total investments (net) of the Bank stood at $ 6,545.40 crores as against $ 6,051.15Crores as on 31st March 2015.

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

2. PROFIT

The Bank has posted an operating profit of $ 407.12 crores in FY 2015-16 against $ 368.41 Crores in the previous yearFY 2014-15 registering a growth of 10.51%. The net profit for the year, after provisions and taxes, amounts to $ 180.24 crores asagainst $ 132.29 Crores recorded in 2014-15 recording a growth of 36.25%.

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Particulars

4. DIVIDEND:

Your Board of Directors are pleased to recommend a dividend of $ 3.00 (30%) per share for the year ended 31st March, 2016 asagainst $ 2.00 (20%) per share for previous year ended 31st March, 2015. The total out go in the form of dividend, including taxes,will be $ 64.80 Crores.

5. EPS / BOOK VALUE:

Earnings per Share stood at $ 10.05 for the year ended 31st March, 2016 as compared to $ 9.16 as on 31st March, 2015. Book Valueof the share, stood at $ 88.70 as on 31st March, 2016 as compared to $ 82.48 as on 31st March, 2015.

6. NET OWNED FUNDS / CAPITAL ADEQUACY RATIO:

Net Owned Funds (NOF) of the Bank increased from $ 1,477.70 Crores as at the end of FY 2014-2015 to $ 1,591.86 Crores as atthe end of FY 2015-2016, reflecting a growth of 7.73%.

The Capital Adequacy Ratio (CAR) as on 31st March 2016 as per BASEL III is 10.67%. The bank has been consistently maintainingCapital Adequacy Ratio well above the regulatory minimum of 9% stipulated by the Reserve Bank of India.

The Tier-I and Tier-II components of Capital Adequacy Ratio were comfortable at 8.69 % and 1.98% respectively.

7. NON-PERFORMING ASSETS (NPA’S):

Indian Banking industry continued to experience accretion of NPA in recent past. This has largely been attributed to the weakperformance of the global as well as Indian economy, resulting in the deterioration of asset quality held by the banking sector.This trend continued to persist to certain extent during this financial year also across the Indian banking sector. This position isexpected to improve in the current year.

Against this backdrop, your bank has shown an improved performance in NPA management during the last financial year.The percentage of Gross & Net NPA of your bank decreased to 1.97% and 1.18% respectively as on 31.03.2016 against the last yearfigure of 2.75% & 1.85%.

This was made possible due to the combined efforts put in by the employees, which yielded the desired results. Your Bank also soldsome hard core NPAs to ARCs which also enabled the Bank to make substantial recovery from NPAs during the FY. Stressedaccounts were upgraded through efficient recovery follow-up and cash recoveries were also significant during the period. Coordinatedrecovery efforts resulted in improved performance during the FY.

3. APPROPRIATIONS

For the year ended($ in crore)

31.03.2016 31.03.2015

Profit brought forward 0.08 0.07

Transfer from IFR 0.73 0.00

Amount available for appropriation 181.04 132.35

Transfer to:

Statutory Reserve 45.20 33.20

Capital Reserve 6.04 4.78

Other Reserve 50.00 41.40

Investment Reserve 0.00 0.73

Special Reserve u/s 36(i)(viii)of the IT Act, 1961 15.00 9.15

Proposed Dividend 53.84 35.84

Corporate Dividend Tax 10.96 7.17

Balance of profit carried forward * 0.00 0.08

* balance of profit carried forward for FY 2015-16 $ 0.44 lakhs

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During the year, Credit monitoring has been strengthened and follow-up methodology was further improved which has resulted in agreat reduction of slippage to NPA. Conducts of high value credit portfolio was under constant monitoring. Monitoring process hasbeen aided by technology. Wherever stress was noticed, immediate remedial steps were taken and stressed assets were nurturedback to performing assets.

8. BRANCH AND ATM NETWORK:

During the fiscal 2015-16, the Bank added 60 new branches to its network across the country and as on 31st March 2016, the Bankhad a network of 459 branches, 1 satellite branch and 7 extension counters, spread across 16 states and the union territory ofPondicherry.

The Bank also has ATM network of 910 (327 Onsite & 583 offsite), in vital / major locations for better service to customers. The Bankcontinued to expand its distribution network, which remains an integral part of the Bank's strategy for tapping low-cost CASAdeposits, lending to retail & SME segments and cross selling third-party products.

The Bank's focus is on customer ecstasy, by maintaining a high degree of service. The bank has a strong and wide base in theSouthern states of India and is focusing on retail and SME sector, by rendering high-tech services.

9. FINANCIAL INCLUSION:

Financial inclusion may be defined as the process of ensuring access to financial services to vulnerable groups such as weakersections and low income groups at an affordable cost and providing timely and adequate credit where needed. The essence offinancial Inclusion is to ensure that a range of appropriate Basic financial services are made available to every individual andenabling them to understand and access those services.

The bank has implemented the financial inclusion plan in 356 Villages & wards allotted by SLBC in Tamilnadu. The Bank has opened160513 Basic Savings Bank Deposit Accounts (BSBDA) including 81297 accounts under Prime Minister Jan Dhan Yojana (PMJDY).

10. INTERNATIONAL BUSINESS:

Dollar remained strong for better part of the Financial Year 2016. However, the rally in dollar reversed post Federal Reserve Meet inMarch 2016 where it was hinted of two rate hikes in 2016, down from the four predicted at the December meeting. Emerging Marketcurrencies including Indian Rupee rallied after the Federal Reserve statement. Indian Rupee reversed its weakening trend andstarted gaining post Federal Budget.

During the year under the report, the Bank achieved a foreign exchange turnover of $ 5,219.18 Crores as against $ 4,560.82 Croresin the previous year. The outstanding advances to export sector stood at $ 292.43 Crores as on 31st March 2016. Going ahead, weexpect the business to improve significantly with up-gradation of more branches to undertake foreign exchange business.

11. BANK TRANSFORMATION EXERCISE:

Bank concluded its Transformation project with EY. Many exercises during the course of the project cycle were initiated and completed.Some more suggestions were accepted and are in the process of being implemented. Bank will now take forward the transformationexercise with an internal Transformation Team under the guidance of Top Management.

In the journey of Transformation, Bank successfully enhanced the business in the selected 30 Branches and now will be replicatingthe same approach in about 70 more branches this year. The team will work closely with various Departments on the suggestionsmade by EY plus other suggestions coming from various internal sources. These initiatives are expected to not only enhance thebusiness numbers but also enable the staff at various levels to perform well with a focused approach with clearly drafted KRA/KPI ofevery individual role.

Going forward a Team of 3 Officers under Leadership of SVP (Transformation) will work closely on the implementation and a coreteam of Top Management Headed by the MD & CEO will monitor the progress regularly.

12. LVB CROWN SERVICES:

LVB CROWN Services launched for high net-worth customers in FY16 got off to a robust start with very positive response fromcustomers. In the first year, we have added over 5,665 customers to our CROWN portfolio. These esteemed customers have aSavings Bank book of over INR 246 Crores. With a growing customer base, CROWN Connect Engagement Programs are beingconducted for customers in Branches, as well as through specific events. These programs aim at keeping us well connected with ourcustomer, at the branch level. Our teams are also advising customers on Third Party Products like Life Insurance, Health Insurance,as well as investment in Mutual Funds, especially through SIPs. We have 3 CROWN lounges at present, one each at Bangalore,Hyderabad, and Chennai. We have plans to increase many more lounges in FY 2017. In the coming year, we would extendLVB CROWN Services to NRI and Business relationships also. LVB CROWN will be the focus for delivering superior, differentiatedofferings to our customers in FY 2017.

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13. LISTING AGREEMENT WITH STOCK EXCHANGES:

The Equity Shares of the bank are listed with the National Stock Exchange of India Ltd, Mumbai and Bombay Stock Exchange,Mumbai which is enhancing the liquidity of your equity shares.

14. ALIGNING TECHNOLOGY WITH BUSINESS OBJECTIVE:

Your bank has launched user friendly mobile banking App "LVB Mobile" in all three major mobile platforms - viz, Android, Windowsand Apple-IOS. You can do funds transfer (RTGS, NEFT, IMPS), set financial limit for all your transactions, do all kinds of recharges,manage and pay utility bills, request cheque books, block your debit card using "LVB Mobile" .

Your bank has introduced Welcome kit to facilitate the customer to commence using our services / alternate delivery channels assoon as the Savings Account is opened and to reduce TAT (Turnaround Time) for on-boarding customers.

Your bank has deployed Cash Deposit Machine at various locations to enable you to deposit the cash in your bank account at anytime 24 X 7 X 365 without visiting the branches.

Your bank has also introduced EMV chip based debit cards for additional security as per RBI guidelines.

Information Security:

Your bank has implemented various security measures as per RBI Guidelines (Gopalakrishna Committee Recommendations) toprotect the interest of customers/public. The robust security measures like two factor authentication, One Time Password (OTP),Public Key Infrastructure (PKI) were implemented to enable the customers to perform the financial transactions through InternetBanking, ATM, POS and Mobile banking applications. Your Bank has implemented the Business Continuity Plan (BCP) across theBank to ensure uninterrupted services to the customers during any disaster.

Technology Awards:

Your bank has won "Best bank award for Managing IT Infrastructure among small banks" from IDRBT "Institute of Development andResearch in Banking Technology"- (established by RBI).

Your bank has also bagged CIO100 award from M/s. IDG Media Pvt. Ltd. for implementing private cloud technology.

15. WEALTH MANAGEMENT / PARABANKING ACTIVITIES:

i. Life Insurance: Bank has tied-up with Max Life Insurance Company Ltd (MLI) to offer Life Insurance products to the customers.

ii. General Insurance: Bank has tied-up with M/s. Future Generali India Insurance Company Ltd for General Insurance businessdistribution.

iii. Health Insurance: Bank has tied up with M/s. Cigna TTK Standalone Health Insurance Company Ltd to offer Health InsuranceProducts to the customers.

iv. LVB SBI Co-Branded Credit Cards: Bank has tied up with M/s. SBI Cards and Payment Services Pvt Ltd (SBICPSL) andoffering cobranded credit card to the customers and employees of the bank.

v. Mutual Funds & PMS: The Bank is presently having tie-up with thirteen leading Asset Management Companies for promotingvarious Mutual Fund schemes. In addition, we are promoting Port Folio Management Services (PMS) through UTI, Reliance andSundaram Asset Management Company.

vi. Money Transfer through Branch Channels: Foreign inward remittances arrangement with M/s. Weizmann Forex Ltd. for extendingWestern Union Money Transfer facility, in addition, tied-up with M/s. UAE Exchange & Financial Services Ltd., for offering GlobalMoney Transfer services through Xpress Money and Moneygram.

vii. Money Transfer through Direct Remittances: Tied up with Times of Money - Remit 2 India for Inward remittance from Abroad,this enables the NRIs to directly remit the amount to their account / residents.

viii. Investment & Infrastructure Bonds: Bank empanelled with M/s Bajaj Capital Ltd. for promoting Investment & InfrastructureBonds.

ix. PAN Card Services: Bank has tied up with M/s. UTI Infrastructure & Technology Services Ltd., (UTIITSL) as PAN Service Agent(PSA) for collecting the PAN Application across the country through Branches.

x. Depository Participant Services: Registered as Depository Participant with NSDL and with necessary clearances, this productis offered to our customers.

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xi. Online Trading Services: Bank has tied up with M/s. IDBI capital Market Services Ltd & Way2Wealth Brokers Private Limited foroffering online trading services to the customers.

xii. New Pension System (NPS): Bank has registered with PFRDA and NSDL for NPS and recently enabled the eNPS facility alsofor subscribers.

xiii. ASBA: As Bankers to the issue, the Bank can now receive applications under ASBA mode thus enabling the investors to earninterest till allotment of securities.

xiv. Prime Minister Social Security: Bank has successfully launched the Prime Minister Jeevanjyoti Bima Yojana, Prime MinisterSuraksha Bima Yojana and Atal Pension Yojana.

16. RISK:

Risk is an integral component of the activities of any bank. Risk management is an attempt to identify, to measure, to monitor and tomanage uncertainty. It is not only a requirement under several voluntary codes and statutes but also make business sense to identifythe probability of not achieving strategic and business goals. Risk Management has to be embedded in business processes toensure that it is being practiced and made part of the culture of the organization. With this in mind, the bank has established systemsand policies ensuring an ongoing assessment of relevant risk types on an individual basis and in the aggregate as well.

The Bank's Board ensures that the risks are managed appropriately through laid down policies and effective systems. A Board LevelCommittee oversees the implementation of Credit risk, Market Risk and Operational Risk policy prescriptions. The Asset LiabilityManagement Committee (ALCO) looks into the management of Liquidity and Market risk and ensure adherence to the prudentiallimits. At Executive Level also, a committee consisting of Top Executives reviews periodically Liquidity Risk, Credit Risk & Market riskto take stock of the current situation. At the organization level, an Integrated Risk Management Department is headed by Senior VicePresident and it is functioning at Corporate office to identify measure, monitor and reduce risk; optimize returns and assess therequired capital level. Bank has already automated the process of capital calculation and Base rate as per RBI Guidelines. Bank hasa robust credit risk assessment system to ascribe borrower risk grades. This facilitates data collection and analysis for movingtowards Advanced Approaches. Bank has in place well defined Frame work for managing Market Risk. Basic Indicator Approach hasbeen adopted for computation of capital charge for Operational Risk.

The Bank has migrated to Basel III in a phased manner (as per RBI guidelines) from April 2013 onwards and is preparing ICAAPdocument to assess its inherent risk and capital requirements. Bank is doing the Stress Testing as per the revised guidelines issuedby RBI during December 2013 and Scenario Analysis for various risks as required under Pillar II for enhancing risk assessment andto provide the bank, a better understanding of the likely impact even in extreme circumstances. Technology is extensively used inmeasuring and discussing market risk using statistical tools including stress testing.

17. INTERNAL CONTROLS:

Bank has a separate Audit and Inspection Department, which subjects all the branches of the bank besides the Treasury, CurrencyChests, Service Branches, Regional Offices and every department of the Corporate Office, to regular inspection. All the branchesare subjected to IS Audit. Key Functional areas including Integrated Treasury at Mumbai, Central Processing Cell, Chennai, Lotus-CPC, Karur and 102 branches are under Concurrent Audit which covers 59.00% of the total Deposits and 78.00% of the totalAdvance of the Bank.

Audit Committee of the Board constituted in line with RBI guidelines and as per the requirements of SEBI, reviews the adequacy ofthe audit and compliance functions, including the policies, procedures and techniques.

18. HUMAN RESOURCE:

The Staff strength of the Bank was augmented during the year 2015-16 with recruitment of 17 Executives, 155 Officers, 125 JuniorOfficers & 20 Sub-staff. Further, 446 Sales Personnel were also engaged to boost sales. Promotion to higher scale and cadre wererolled out and 262 staff got promoted across different cadres. Total number of employees as on 31.03.2016 was 3565 as against3459 as on 31.03.2015.

The Bank's focus on training the human resources on a continual basis gained momentum by conducting online e-learning exerciseduly leveraging technology. Bank has trained considerable number of resources in offsite training programmes conducted by reputedinstitutions such as RBI, CAB, SIBSTC, IDRBT, NIBM & FEDAI.

19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE BANK:

Disclosure under Section 186 of the Companies Act, 2013 does not apply to Banking Company.

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20. 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 theFY 2015-16, 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 athttp://www.lvbank.com/UserFiles/File/RelatedPartyTransactions_Policy.pdf

21. OUTLOOK 2016-17:

The Indian economy is on the brink of a major transformation, with several policy initiatives set to be implemented shortly. Positivebusiness sentiments, improved consumer confidence and more controlled inflation are likely to prop-up the country's the economicgrowth. Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to providefurther impetus to growth. All these factors suggest that India's banking sector is also poised for robust growth as the rapidly growingbusiness would turn to banks for their credit needs.

Also, the advancements in technology have brought the mobile and internet banking services to the fore. The banking sector is layinggreater emphasis on providing improved services to their clients and also upgrading their technology infrastructure, in order toenhance the customer's overall experience as well as give banks a competitive edge.

Envisaging profitable growth is the prime vision of any organization and our bank is no exception. Study on profitability from all variedangles ultimately reaches to a common consensus that, reduction in cost of deposits and operating expenses is the need of the hour.We expect that RBI has room to cut its policy repo rate over fiscal 2017, given projections of inflation. Coupled with gradual economicand investment recovery and funding needs for auction proceeds, bank credit growth is likely to be in the 20% range in fiscal 2017;we expect similar growth in deposit also.

Banking industry, in its attempt to guard against high cost funds have been focusing on CASA (Current Account Saving Account)to save profit margins. High proportion of low-cost deposits builds a bank's ability to reduce its cost of funds. For the fiscal 2016-17,the bank envisages a higher CASA composition to total deposits.

22. CORPORATE GOVERNANCE:

Corporate Governance of the Bank continues to rest on the fundamental pillar of high ethical values, designed to enhance andprotect 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. All the Directors on the Board have executed deed of covenantand undertaking individually in line with the recommendations of Dr. Ganguly Committee Report.

Further pursuant to SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, a Management Discussion andAnalysis is presented in Annexure-A and Report on Board Committees is furnished in Annexure-B. Composition of the Board ofDirectors together with the attendance of Directors at various meetings of the Board, its Committees and Annual General Meetingand the number of directorships held by them along with the details of Audit Committee and Stakeholders Relationship Committeeare furnished in Annexure-C, including composition of the Audit Committee. General Shareholders' information is furnished inAnnexure-D.

23. NUMBER OF MEETINGS OF THE BOARD:

During the financial year, the Board met 12 times. The Board meetings were held in accordance with the provisions of the CompaniesAct 2013. The details of the meetings held are provided in the Corporate Governance Report that forms part of this Annual Report.

24. POLICY OF DIRECTOR’S APPOINTMENT AND REMUNERATION:

According to the Articles of Association of our Bank, the number of Directors of the Bank shall not be less than nine and more thantwelve and not less than fifty-one percent of the total number of Directors shall be persons who satisfy the requirements of Section10A of the Banking Regulation Act. The process of Due Diligence is undertaken in compliance of Directives/Guidelines/Circularsissued by RBI from time to time in the matter of appointment/re-appointment of Director. The Non-Executive Chairman of the Bankand the Managing Director are appointed with prior approval of the RBI. Based on the vacancies that may arise in the Board fromtime to time, the Board follows a due process of appointment of directors through prior due diligence in line with the regulatory advicegiven by RBI, SEBI and MCA by way of Circulars / Guidelines / Regulations / Act. The Nomination and Remuneration Committee ofthe Board has formulated evaluation criteria for the appointment or re-appointment of directors. The Managing Director and CEO ispaid remuneration as approved by the RBI but is not paid sitting fees. Other than the MD&CEO, no other directors are paid anyremuneration apart from sitting fees. The details of remuneration of the MD&CEO and that of the sitting fees paid to the directors areavailable elsewhere in the report. The senior management of the Bank along with the KMPs abide by the Code of Conduct prescribed

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by the Bank. The code of conduct has been disclosed at the Bank's website and can be viewed at http://www.lvbank.com/UserFiles/CODEOFCONDUCT.pdf. The MD&CEO, CFO and Company Secretary are the Key Managerial Personnel (KMPs) of the Bank, asstipulated by the Companies Act, 2013. Other than MD&CEO, there is no other whole time director in the bank.

25. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has duly obtained necessary declarations from each independent director under Section 149(7) of the CompaniesAct, 2013 that he/she meets the criteria of independence as laid down in the section 146(6) of the Companies Act, 2013 andRegulation 16 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and the Company has also obtained the'Fit and Proper' declaration as prescribed by the Reserve Bank of India.

26. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015, yearly performance evaluation of the Board as a whole and that of the individual directors and of various committees of theBoard are duly conducted. The Nomination and Remuneration Committee of the Board had formulated definite criteria for evaluationof Independent Directors and the Board.

The Independent Directors, in their separate meeting had considered and evaluated the performance of the Board, the Chairmanand the other non-independent Directors in the Board. The Board has taken note of the evaluation made by the IndependentDirectors and has also evaluated the performance of the Board, the Committees and the individual Directors taking into account thecriteria formulated by the Nomination and Remuneration Committee.

The Board has also considered the participation by the members in the meetings of Board and its Committees, the composition anddiversity of Board, the various Committees of the Board and its role play, the familiarization program given to the directors, theappropriateness of the decisions made, the quality, quantity and timeliness of flow of information to the Board, the positive contributionof the individual Directors who come from a professional background and the quality suggestions and guidance given by themthrough their participation in the meetings with an understanding of the business of the Bank and an understanding of their role andresponsibilities and the overall effectiveness, the broad based discussions at Board / Committee Meetings, the understanding of theregulatory requirements, the contribution of the Board and the Committees to the specific strategies drawn and the overall growth ofthe bank. The evaluation of the individual Directors was done in absence of the Director being evaluated.

27. CHANGES IN THE BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

Resignations / Cessation of tenure of appointment:

Shri.Rakesh Sharma, Managing Director & CEO has resigned from the Bank with effect from 09.09.2015 as he got appointed asMD&CEO of Canara Bank.

Shri. Vivek Deep’s term of appointment came to an end vide RBI letter dated 12.02.2016. He served on the Board formore than 1 year.

Appointments:

Shri.Par thasarathi Mukherjee was appointed as Managing Director & CEO of the Bank by RBI vide its letter no.DBR.Appt.No.7973/08.44.001/2015-16 dated 18.12.2015 as per Section 35B of BR Act, 1949 for three years from date of his takingcharge. Shri.Parthasarathi Mukherjee assumed office as Managing Director and CEO of our Bank on 25.01.2016.

Shri. Suvendu Pati, General Manager, RBI was appointed as Nominee Director by the RBI on 12.02.2016 for a period of two yearsor till further orders whichever is earlier.

Re-appointments:

Shri. N. Malayalaramamirtham, Director will be retiring by rotation at the ensuing 89th Annual General Meeting and being eligible,offers himself for re-appointment.

Key Managerial Personnel:

Shri. Rakesh Sharma, Managing Director & CEO, resigned from the Bank on 09.09.2015 and Shri.Parthasarathi Mukherjee tookcharge as Managing Director & CEO on 25.01.2016.

Apart from the above, there were no changes in the Key Managerial Personnel during the year.

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28. DIRECTORS’ RESPONSIBILITY STATEMENT PURSUANT TO SEC 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, 2016:

• 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 arereasonable 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 andof 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 theprovisions of applicable laws governing banks in India for safeguarding the assets of the Company and for preventing anddetecting 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 controlsare 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 systemswere adequate and operating effectively.

29. SOCIAL INITIATIVES 2015-2016:

Your Bank as a responsible corporate citizen has been supporting various philanthropic activities by donating to such initiatives tothe tune of $13.51 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 3Financial Years or any part thereof on CSR activities. The Bank has disclosed its CSR Policy in the website and the same can beviewed at http://www.lvbank.com/download/Corporate_Social_Responsibility_policy.pdf. The Annual Report on the CSR activitiesundertaken during the year as per the format specified by the Ministry of Corporate Affairs is forming part of this Report and isannexed to this Report as Annexure E.

30. EXTRACT OF ANNUAL RETURN:

Pursuant to Section 134(1)(a), the extract of Annual Return in Form MGT 9 as provided under Sub-Section (3) of Section 92 isappended to this Annual Report as Annexure F.

31. PARTICULARS OF EMPLOYEES:

The disclosures pursuant to the provisions of Section 197 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and the Disclosures pursuant to the provisions of Section 197 (12) read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure-G.

32. EMPLOYEES STOCK OPTION SCHEME:

In the year 2010, the shareholders of the Bank have approved the issue of shares through Stock Option Scheme. As on 31.03.2015,options in force were 545000, of which 295000 shares were exercised during 2015-16 and the remaining options expired. Thus as on31.03.2016, the options in force are NIL. The ESOP granted to Shri. Parthasarathi Mukherjee, Managing Director & CEO is subjectto the approval of RBI, which is awaited. Statutory disclosures regarding ESOS have been furnished in the Annexure H to this reportand can be viewed at www.lvbank.com/annualreport.aspx.

33. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS 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 InformationTechnology extensively in its operations. The Bank continued to encourage the country's exports and will endeavor to enlarge itsexport financing.

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34. DETAILS OF MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE BANKWHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE BANK TO WHICH THE FINANCIALSTATEMENT RELATE AND THE DATE OF THE REPORT:

There were no material changes and commitments affecting the financial position of the bank which have occurred between the endof the financial year of the bank to which the financial statement relate and the date of the report.

35. 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 complaintsof sexual harassment and for matters connected therewith or incidental thereto, as sexual harassment results in violation of thefundamental rights of a woman to equality under Articles 14 and 15 of the Constitution of India and her right to life and to live withdignity under Article 21 of the Constitution and right to practice any profession or to carry on any occupation, which includes a rightto a safe environment free from sexual harassment, a well-defined policy in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been adopted in the bank. The complaints registered under theAct, on actions covered under the ambit of Sexual Harassment at work place are handled by a committee represented by seniorExecutives of the Bank, a lady Law Officer and an external member. Redressal of such complaints are dealt in a prudent manner,giving equal opportunity to both the aggrieved and the accused for representation of the case and without affecting the dignity andself-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

36. WHISTLE BLOWER POLICY:

Disclosure of information in the public interest by the employees of an organization is increasingly gaining acceptance by Publicbodies 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 thefinancial 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 made available in the Bank'sWebsite and local intranet. During the year 2015-16, no personnel has been denied access to the audit committee. The Web linkthereto is https://www.lvbank.com/UserFiles/File/WhistleBlowerPolicy_2015.pdf.

37. FAMILIARISATION PROGRAMME:

Pursuant to the Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Bank has toconduct familiarization programme for newly inducted Independent Directors and the bank has done accordingly. In compliance withRegulation 46 (2) (i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of the familiarisationprogramme conducted is disclosed in the website of the Bank and can be viewed at http://www.lvbank.com/noticeshares.aspx.

38. CODE OF CONDUCT TO REGULATE, MONITOR AND REPORT TRADING BY INSIDERS IN SECURITIES OFTHE LAKSHMI VILAS BANK LIMITED:

The Bank has formulated a Code of Conduct pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015 to regulate,monitor and ensure reporting of trading by the employees and other connected persons towards achieving compliance with the SEBIRegulations and is designed to maintain highest ethical standards of dealing in securities of the Bank by persons to whom it isapplicable. The code of conduct and related policy are available in the Bank's website and can be viewed at http://www.lvbank.com/Insider_Trading.aspx

39. AUDITORS:

Statutory Auditors:

The Statutory audit of the Bank was carried out by M/s. R. K. Kumar & Co, Chartered Accountants, Chennai whose report is annexedand forms part of this report. The Statutory Central and Branch Auditors have audited all the branches and other offices of the Bank.

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With regard to the observations made by the Auditors 'without qualifying' their report dated 27.04.2016, our response to the sameare furnished hereunder:-

Observation:

Quote: "We draw attention to Note No.2.4.4.C of the financial statements, regarding deferment of loss of $ 95.60 Crore on sale ofadvances to Asset Reconstruction Companies.

Our opinion is not qualified in respect of this matter".

Response:

RBI vide its circular no.DBR.No.BP.BC.94/ 21.04.048/2014-15 dated 21.05.2015 has extended permission to Banks to provide thenet shortfall on account of sale of assets up to 31.03.2016 to Asset Reconstruction Company over a period of two years. Consequently,$ 76.33 Crores (previous year $ 27.43 Crores) has been charged to Profit & Loss account for the year ended 31st March 2016.The unamortized amount on this account as on 31st March 2016 is $ 95.60 Crores (previous year $ 72.99 Crores)

Secretarial Auditor:

Pursuant to the provisions of Companies Act 2013, the Bank has appointed Mr. K. Muthusamy, Practising Company Secretary,Coimbatore (CoP 3176) as the Secretarial Auditor for the FY 2016. The Secretarial Audit Report dated 27.04.2016 is annexed to thisreport as Annexure - I. There are no qualifications, reservation or adverse remark or disclaimer in the report.

40. ACKNOWLEDGMENTS:

Your Directors would like to thank the shareholders and customers for their continued goodwill and support. The Board also gratefullyacknowledges the guidance and co-operation received from the Reserve Bank of India and other regulatory and government authoritieslike 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 includingthe Employees' Union and Officers' Association for their support in delivering a significantly improved performance and look forwardto a more evolved relationship as steps is taken to re-orient the bank for the future.

For and on behalf of the Board of Directors

K.R.Pradeep Parthasarathi MukherjeeChairman of the Meeting Managing Director & CEO

Place : BengaluruDate : 06.05.2016

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INDEPENDENT AUDITOR’S REPORT

Report on the Financial Statements

1. We have audited the accompanying financial statements of The Lakshmi Vilas Bank Limited ('the Bank'), which comprise theBalance Sheet as at 31st March 2016, the Profit and Loss Account, the Cash Flow Statement for the year then ended, and asummary of significant accounting policies and other explanatory information. Incorporated in these financial statements are thereturns of 22 branches audited by us, 460 branches audited by branch auditors.

Management’s Responsibility for the Financial Statements

2. The Bank's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ('the Act') withrespect to the preparation of these financial statements that give a true and fair view of the financial position, financial performanceand cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the AccountingStandards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and provisions ofSection 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India ('RBI') fromtime to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection andapplication 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 accuracyand completeness of the accounting records, relevant to the preparation and presentation of the financial statements that givea true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required tobe included in the audit report under the provisions of the Act and the Rules made thereunder.

5. We conducted our audit of the Bank including its branches in accordance with Standards on Auditing ('the Standards') specifiedunder section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free of material misstatements.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements.The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement ofthe financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financialcontrol relevant to the Bank's preparation of the financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by the Bank's Directors, as well as evaluating theoverall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statementstogether with the accounting policies and notes thereon give the information required by the Banking Regulation Act, 1949 aswell as the Companies Act, 2013 in the manner so required for banking companies and give a true and fair view in conformitywith accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Bank as at 31st March, 2016;

(ii) in the case of the Profit and Loss Account of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of cash flows for the year ended on that date.

To

The Members of Lakshmi Vilas Bank Limited

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For R. K. KUMAR & CO.Chartered Accountants

Firm’s Registration No. 001595S

(B.R. ASHOK)Place : Chennai PartnerDate : 27th April, 2016 Membership Number: 023313

Emphasis of Matter

9. We draw attention to Note No.2.4.4.C of the financial statements, regarding deferment of loss of $ 95.60 Crore on sale ofadvances to Asset Reconstruction Companies.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of theBanking Regulation Act, 1949 read with Section 133 of the Companies Act, 2013 and Rule 7 of the Companies (Accounts)Rules, 2014.

11. As required by sub section (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 forthe purpose of our audit 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) the returns received from the branches of the Bank have been found adequate for the purposes of our audit.

12. 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 werenecessary for the purpose of our audit;

(ii) in our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from ourexamination of those books;

(iii) the reports on the accounts of the branches audited by branch auditors of the Bank under section 143(8) of the CompaniesAct, 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 agreementwith the books of account ;

(v) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 ofthe Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, to the extent they are not inconsistent with theaccounting policies prescribed by RBI;

(vi) on the basis of written representations received from the directors and taken on record by the Board of Directors, none ofthe directors is disqualified as on 31st March 2016 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 operatingeffectiveness of such controls, refer to our separate Report in "Annexure A".

(viii) with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Auditand 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

b. the Bank has made provision, as required under the applicable law or accounting standards, for material foreseeablelosses, if any, on long-term contracts including derivative contracts and

c. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and ProtectionFund by the Bank.

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Annexure A to the independent auditor's report of even date on the financial statements of Lakshmi Vilas Bank Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 20131. We have audited the internal financial controls over financial reporting of The Lakshmi Vilas Bank Limited ('the Bank') as at

31st March 2016 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 Controls2. 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 GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting ('the Guidance Note') issued by the Institute of CharteredAccountants of India ('the ICAI').

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business, including adherence to Bank's policies, the safeguarding of itsassets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timelypreparation of reliable financial information, as required under the Companies Act, 2013 ('the Act').

Auditor's Responsibility3. 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') and the Standards on Auditing ('the Standards'), both issued by the ICAI and deemed to be prescribed undersection 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established and maintained and if such controls operated effectivelyin all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system overfinancial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtainingan understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testingand evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected dependon the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due tofraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Bank'sinternal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting6. A bank's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccounting 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 expenditures of the bank are being made only inaccordance 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 thebank's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper

management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of anyevaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion8. In our opinion, the Bank has, in all material respects, an adequate internal financial controls system over Financial reporting and such

internal financial controls over financial reporting were operating effectively as at 31st March 2016, based on the internal control overfinancial reporting criteria established by the Bank considering the essential components of internal control stated in the GuidanceNote issued by the ICAI.

For R. K. KUMAR & CO.Chartered Accountants

Firm’s Registration No. 001595S

(B.R. ASHOK)Place : Chennai PartnerDate : 27th April, 2016 Membership Number: 023313

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(` 000’s)

As at As atSchedule 31-03-2016 31-03-2015

I. CAPITAL & LIABILITIES

a. Capital 1 179,46,16 179,16,66

b. Reserves & Surplus 2 1584,13,25 1376,97,60

c. Deposits 3 25430,96,15 21964,21,22

d. Borrowings 4 723,00,78 458,10,00

e. Other Liabilities & Provisions 5 814,59,92 726,98,14

TOTAL 28732,16,26 24705,43,62

II. ASSETS

a. Cash & Balances with Reserve Bank of India 6 1286,50,22 1143,44,03

b. Balances with Banks and Money at call & Short Notice 7 82,10,91 175,28,07

c. Investments 8 6545,40,46 6051,15,62

d. Advances 9 19643,73,90 16352,01,90

e. Fixed Assets 10 366,99,87 243,41,30

f. Other Assets 11 807,40,90 740,12,70

TOTAL 28732,16,26 24705,43,62

Contingent Liabilities 12 3687,01,45 2903,11,92

Bills for collection 884,43,12 632,37,73

Significant Accounting Policies 17

Notes on Accounts 18

BALANCE SHEET as on 31st March 2016

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

As per our Report of Date annexed

For M/s. R.K. KUMAR & COChartered AccountantsFRN - 001595S

B.R. ASHOKPartnerM. No. 023313

Chennai27th April, 2016

D.L.N. RAO

S.G. PRABHAKHARANS. DATTATHREYAN

Dr. P.A. SHANKAR

N. MALAYALARAMAMIRTHAMPANKAJ VAISH

PRAKASH P. MALLYA

K. BABUJI

SUVENDU PATIDirectors

K.R. PRADEEPChairman of the Meeting

PARTHASARATHI MUKHERJEEManaging Director & CEO

M. PALANIAPPANPresident & Chief Financial Officer

N. RAMANATHANCompany Secretary

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PROFIT AND LOSS ACCOUNT for the year ended 31st March 2016

(` 000’s)

Year ended Year endedSchedule 31-03-2016 31-03-2015

Schedules 13 to 16 and 17 to 18 form part of this Profit & Loss Account.

I. INCOME

a. Interest Earned 13 2568,29,91 2214,53,09

b. Other Income 14 304,53,24 284,03,36

TOTAL 2872,83,15 2498,56,45

II. EXPENDITURE

a. Interest Expended 15 1922,99,34 1687,87,67

b. Operating Expenses 16 542,71,40 442,27,97

c. Provisions & Contingencies 226,88,83 236,12,22

TOTAL 2692,59,57 2366,27,86

III. NET PROFIT FOR THE YEAR 180,23,58 132,28,59

Profit brought forward 8,16 6,78

Transfer from Investment Reserve 72,74 0

TOTAL 181,04,48 132,35,37

IV. APPROPRIATIONS

a. Transfer to Statutory Reserve 45,20,00 33,20,00

b. Transfer to Capital Reserve 6,04,17 4,78,60

c. Transfer to Other Reserves 50,00,00 41,40,00

d. Investment Reserve 0 72,74

e. Transfer to Special Reserve u/s 36(1)(viii) of the IT Act, 1961 15,00,00 9,15,00

f. Proposed Dividend 53,83,85 35,84,23

g. Tax on Proposed Dividend 10,96,02 7,16,64

h. Balance carried over to Balance Sheet 44 8,16

TOTAL 181,04,48 132,35,37

Earnings Per Share - Basic ($) 10.05 9.16

Earnings Per Share - Diluted ($) 10.05 9.15





D.L.N. RAO


Dr. P.A. SHANKAR


PRAKASH P. MALLYA

K. BABUJI






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($ 000’s)

As at As at31-03-2016 31-03-2015

SCHEDULE 1 - CAPITALAUTHORISED CAPITAL(30,00,00,000 equity shares of $ 10/- each) 300,00,00 300,00,00ISSUED CAPITAL(18,09,69,986 equity shares of $ 10/- each)(Previous year 18,06,74,986 equity shares of $ 10/ each)of which 2,95,000 shares issued under “LVB ESOS-2010” 180,97,00 180,67,50Subscribed, Called-up and Paid Up Capitali) 17,94,61,609 equity shares of $ 10/- each 179,46,16 179,16,66

(Previous year 17,91,66,609 shares) 2,95,000 sharesissued under “LVB ESOS-2010”. (Previous year 3,45,000 shares)

ii) 1,26,42,131 Bonus Shares allotted(Previous year 1,26,42,131 shares)

iii) Shares kept in abeyance 15,08,377, inclusive of Forfeited &lapsed shares. (Previous year 15,08,377 shares)

iv) Shares Forfeited and lapsed 23,658 (Previous year 23,658 shares)TOTAL 179,46,16 179,16,66

SCHEULE 2 - RESERVES & SURPLUSI. STATUTORY RESERVE

Opening Balance 372,10,46 338,90,46Additions during the year 45,20,00 417,30,46 33,20,00 372,10,46

II. CAPITAL RESERVEOpening Balance 57,06,54 52,27,94Additions during the year 6,04,17 63,10,71 4,78,60 57,06,54

III. SHARE PREMIUMOpening Balance 659,62,54 330,70,23Additions during the year 2,05,16 328,92,31

661,67,70 659,62,54Deductions during the year 4,31,81 657,35,89 659,62,54

IV. REVENUE & OTHER RESERVESOpening Balance 167,46,49 125,35,65Additions during the year 50,71,04 42,10,84

218,17,53 167,46,49Deductions during the year 0 218,17,53 0 167,46,49

V. SPECIAL RESERVE U/S 36(1)(VIII) OF IT ACT, 1961Opening Balance 41,45,00 32,30,00Additions during the year 15,00,00 56,45,00 9,15,00 41,45,00

VI. REVALUATION RESERVEOpening Balance 78,45,67 76,42,79Additions during the year 93,98,59 2,73,72

172,44,26 79,16,51Depreciation on Revalued Asset 71,04 171,73,22 70,84 78,45,67

VII. INVESTMENT RESERVEOpening Balance 72,74 0Additions during the year 0 72,74

72,74 72,74Deductions during the year 72,74 0

0 72,74 72,74VIII. BALANCE IN PROFIT & LOSS ACCOUNT 44 8,16

TOTAL 1584,13,25 1376,97,60

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SCHEDULE 3 - DEPOSITS

A. I. DEMAND DEPOSITS

1. From Banks 1,37 55,91

2. From Others 163644,79 1636,46,16 1509,30,04 1509,85,95

II. SAVINGS BANK DEPOSITS 2779,06,43 2152,53,67

III. TERM DEPOSITS

1. From Banks 1166,35,55 1144,53,13

2. From Others 19849,08,01 21015,43,56 17157,28,47 18301,81,60

25430,96,15 21964,21,22

B. (I) DEPOSITS OF BRANCHES IN INDIA 25430,96,15 21964,21,22

(II) DEPOSITS OF BRANCHES OUTSIDE INDIA NIL NIL

TOTAL 25430,96,15 21964,21,22

SCHEDULE 4 - BORROWINGS

I. BORROWINGS IN INDIA

1. Reserve Bank of India 0 0

2. Other Banks 0 0

3. Other Institutions & Agencies* 723,00,78 723,00,78 458,10,00 458,10,00

II. BORROWINGS OUTSIDE INDIA 0 0

* Includes unsecured Tier II bonds of ` 498.20 Crs 723,00,78 458,10,00(Previous year ` 458.10 Crs.)

SECURED BORROWINGS INCLUDED IN I & II ABOVE 0 0

SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS

I. Bills payable 77,85,74 67,65,20

II. Inter-office adjustments (net) 4,40,37 0

III. Interest accrued 224,52,38 199,46,34

IV. (I) Others - (including Provisions) 373,90,18 385,95,35

(ii) Contingent Provisions against Standard Assets 72,23,00 55,23,00

(iii) Deferred Tax Liabilities 61,68,25 18,68,25

TOTAL 814,59,92 726,98,14

SCHEDULE 6 - CASH AND BALANCES WITHRESERVE BANK OF INDIA

Cash in Hand (including Foreign Currency Notes) 315,90,91 237,26,54

Balances with Reserve Bank of India

I) in current account 970,59,31 906,17,49

II) in other accounts 0 0

TOTAL 1286,50,22 1143,44,03

($ 000’s)

As at As at31-03-2016 31-03-2015

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(` 000’s)

As at As at31-03-2016 31-03-2015

SCHEDULE 7 - BALANCES WITH BANKS & MONEYAT CALL AND SHORT NOTICE

I. IN INDIA

(i) Balance with Banks

a. in current accounts 20,13,46 35,61,48

b. in other deposit accounts 6,25 6,25

20,19,71 35,67,73

(ii) Money at call and short notice

a. with banks 0 0

b. with other institutions 0 100,00,00

20,19,71 135,67,73

II. OUTSIDE INDIA

(I) Balance with Banks

a. in current accounts 61,91,20 39,60,34

b. in other accounts 0 0

61,91,20 39,60,34

TOTAL 82,10,91 175,28,07

SCHEDULE 8 - INVESTMENTS

I. INVESTMENTS IN INDIA

I. Government Securities [incl. treasury bills, & zero coupon bonds] 5849,42,86 5156,39,21

II. Other approved securities 0 0

III. Shares 79,81,17 41,11,73

IV. Debentures & Bonds 355,24,60 374,12,95

V. Subsidiaries and Joint Ventures 0 0

VI. Others [including Commercial Paper, Mutual Funds,Security Receipt, Units, etc.] 260,91,83 479,51,73

6545,40,46 6051,15,62

GROSS INVESTMENTS IN INDIA 6594,44,56 6092,85,08

LESS: DEPRECIATION 49,04,10 41,69,46

NET INVESTMENTS IN INDIA 6545,40,46 6051,15,62

II. INVESTMENTS OUTSIDE INDIA NIL NIL

TOTAL 6545,40,46 6051,15,62

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(` 000’s)

As at As at31-03-2016 31-03-2015

SCHEDULE 9 - ADVANCES

A. I. Bills purchased & discounted 1758,19,67 1045,15,57

II. Cash credits, overdrafts & loans repayableon demand 10678,34,05 9727,27,75

III. Term loans 7207,20,18 5579,58,58

19643,73,90 16352,01,90

B. PARTICULARS OF ADVANCES

I. Secured by tangible assets [incl. advancesagainst Book Debts] 18878,59,94 15522,15,56

II. Covered by Bank / Govt. Guarantees 0 59,85,38

III. Unsecured 765,13,96 770,00,96

19643,73,90 16352,01,90

C. SECTORAL CLASSIFICATION OF ADVANCES

I. Priority Sector 7296,42,17 5672,92,68

II. Public Sector 0 12,50,51

III. Banks 0 25,30

IV. Others 12347,31,73 10666,33,41

TOTAL 19643,73,90 16352,01,90

SCHEDULE 10 - FIXED ASSETS

I. PREMISES

At Revaluation Value 145,38,23 140,35,30

Additions during the year 94,97,30 5,02,93

240,35,53 145,38,23

Deductions during the year 0 0

240,35,53 145,38,23

Depreciation to date 14,49,82 225,85,71 13,23,65 132,14,58

II. OTHER FIXED ASSETS(INCLUDING FURNITURE & FIXTURES)

At Cost 303,71,91 251,57,35

Additions during the year 66,82,14 54,44,98

370,54,05 306,02,33

Deductions during the year 1,52,13 2,30,42

369,01,92 303,71,91

Depreciation to date 227,87,76 141,14,16 192,45,19 111,26,72

TOTAL 366,99,87 243,41,30

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22

(` 000’s)

As at As at31-03-2016 31-03-2015

SCHEDULE 11 - OTHER ASSETS

I. Inter-Office Adjustments (net) 0 2,89,66

II. Interest Accrued 163,63,88 144,83,70

III. Tax Paid in Advance and Tax Deducted at Source (Net) 116,17,46 51,20,42

IV. Deferred Tax Asset 113,90,41 93,90,41

V. Stationery & Stamps 2,42,11 2,28,22

VI. Non Banking Assets acquired in satisfaction of claims 75,86,38 72,18,13

VII. Others 335,40,66 372,82,16

TOTAL 807,40,90 740,12,70

SCHEDULE 12 - CONTINGENT LIABILITIES

I. Claims against the Bank not acknowledged as debts 240,02,49 210,81,50

II. Liability for partly paid Investments 0 0

III. Liability on account of outstanding forward exchange contracts 1159,08,98 912,29,35

IV. Guarantees given on behalf of constituents

In India 828,57,71 574,32,77

Outside India 189,23,18 97,89,76

V. Acceptances, Endorsements & Other Obligations 1252,36,82 1097,68,58

VI. Other items for which the Bank is contingently liable 17,72,27 10,09,96

TOTAL 3687,01,45 2903,11,92

Year ended Year ended31-03-2016 31-03-2015

SCHEDULE 13 - INTEREST EARNED

I. Interest / discount on advances / bills 2038,26,97 1708,89,66

II. Income on Investments 519,40,04 479,93,80

III. Interest on balance with Reserve Bank of India &other inter-bank Funds 3,26,84 8,23,81

IV Others 7,36,06 17,45,82

TOTAL 2568,29,91 2214,53,09

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(` 000’s)

Year ended Year ended31-03-2016 31-03-2015

SCHEDULE 14 - OTHER INCOME

I. Commission, Exchange and Brokerage 147,13,66 119,38,73

II. Profit on sale of Investments 56,85,17 51,61,85

Less: Loss on sale of Investments 3,49,40 53,35,77 1,30,97 50,30,88

III. Profit on sale of land, Buildings & Other Assets 6,47 2,66

Less: Loss on sale of land, Buildings & Other Assets 14,39 -7,92 34,99 -32,33

IV. Profit on Exchange Transactions 16,64,58 1,74,015

Less: Loss on Exchange Transactions 0 16,64,58 0 17,40,15

V. Income earned by way of Dividends fromCompanies in India. 2,97,33 2,97,33 95,57 95,57

VI. Miscellaneous Income 84,49,82 96,30,36

TOTAL 304,53,24 284,03,36

SCHEDULE 15 - INTEREST EXPENDED

I. Interest on Deposits 1833,29,25 1626,37,30

II. Interest on Reserve Bank of India /Inter-Bank Borrowings 89,70,09 61,50,37

TOTAL 1922,99,34 1687,87,67

SCHEDULE 16 - OPERATING EXPENSES

I. Payments to and Provision for Employees 275,35,20 238,37,95

II. Rent, Taxes & Lighting 58,34,76 47,06,89

III. Printing & Stationery 5,77,16 4,97,93

IV. Advertisement & Publicity 8,38,43 3,77,96

V. Depreciation on Bank's Property 37,76,28 15,54,48

VI. Director's fees, allowances 1,15,35 78,00

VII. Auditors' fees & Expenses (incl. Branch Auditors) 1,25,05 1,10,15

VIII. Law Charges 1,16,18 1,43,88

IX. Postage, Telegrams, Telephones etc., 13,36,46 11,61,44

X. Repairs & Maintenance 3,41,22 3,61,59

XI. Insurance 23,82,40 19,15,23

XII. Other Expenditure 112,92,91 94,82,47

TOTAL 542,71,40 442,27,97

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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 andconform 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 underSection 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extentapplicable 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 reportedamounts of assets and liabilities including contingent liabilities as of the date of the financial statements and the reportedincome and expenses during the reported period. The Management believes that the estimates and assumptions used in thepreparation 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 perthe 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 respectivetransaction.

(c) Outstanding forward exchange contracts in each currency are revalued at the Balance Sheet date at the correspondingforward rates for the residual maturity of the contract, in accordance with the guidelines of FEDAI and the provisionsof AS-11. The difference between revalued amount and the contracted amount is recognized as profit or loss, as thecase may be.

(d) Contingent liabilities on guarantees, letters of credit, acceptances and endorsements are reported at the rates prevailingon the Balance Sheet date.

2. INVESTMENTS:

(a) Investments are categorized under the heads ‘Held to Maturity’, Available for Sale, and ‘Held for Trading’ and arevalued 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 notincluded in cost.

(c) Broken period interest paid / received on debt instruments is treated as interest expended / 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 theremaining period to maturity.

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 towardsNPA accounts receipts held under sundries, and provision made for sacrifice of interest / diminution in the value of restructuredadvances 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 theirrevalued cost.

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(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 lifespecified in Schedule II to the Companies Act, 2013 except for hand held communication devices which are depreciatedin full considering the fast changing technology and obsolescence.

(d) Depreciation on computers and Software are provided for on straight-line method at the rate of 33.33% as per theguidelines issued by the Reserve Bank of India.

(e) Depreciation for premises, in which land cost and construction cost could not be ascertained separately, is providedon the total cost.

5. EMPLOYEE BENEFITS:

(a) Annual contributions to the approved Employees’ Gratuity Fund, Approved Pension Fund and Provision for LeaveEncashment benefits are made on actuarial basis and net actuarial gain/loss are recognised as per AccountingStandard 15. Contribution made by the bank to Provident Fund and Contributory Pension Scheme are charged toProfit & Loss account.

(b) The Bank follows the intrinsic value method to account for its employee compensation costs arising from grant ofEmployee 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 pronouncementsand legal opinion, with adjustment for deferred tax in terms of the Accounting Standard 22 (Accounting for Taxes onIncome).

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 significantuncertainty 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 theSecondary Reporting Segment, in accordance with the RBI guidelines and in compliance with the AccountingStandard 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. EARNING PER SHARE:

Basic and Diluted earnings per equity share are reported in accordance with the Accounting Standard 20 “Earnings pershare”. Basic earnings per equity share are computed by dividing net profit by the weighted average number of equityshares outstanding for the year. Diluted earnings per equity share are computed using the weighted average number ofequity 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. Impairmentloss, if any, is provided in the Profit and Loss Account to the extent the carrying amount of assets exceeds their estimatedrecoverable amount.

11. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

(a) As per the Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent Assets”, the Bank recognisesprovisions only when it has a present obligation as a result of a past event and it is probable that an outflow ofresources embodying economic benefits will be required to settle the obligation and when a reliable estimate of theamount of the obligation can be made.

(b) Contingent Assets are not recognized in the financial statements since this may result in the recognition of incomethat may never be realised.

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2.1 Capital (` in crore)

Items 2015-16 2014-15

i) Common Equity Tier 1 Capital Ratio (%) - (Basel-III) 8.69 9.33

ii) Tier 1 Capital Ratio (%) 8.69 9.33

iii) Tier 2 Capital Ratio (%) 1.98 2.01

iv) Total Capital Ratio (CRAR) (%) 10.67 11.34

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

vi) Amount of equity capital raised 0.29 81.61

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 140.10 NIL

Preference Share Capital instruments NIL NIL

2.1.1 In respect of securities held under HTM category, premium paid of $ 8.64 Crore (previous year $ 8.45 Crore) has beenamortized during the year and debited under "Interest received on Investments".

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.

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 ShortNotice.

SCHEDULE 18

NOTES ON ACCOUNTS

1. The reconciliation of inter branch transactions has been completed up to 31.03.2016 and tallying of balances is ensured onan ongoing basis.

2. DISCLOSURE REQUIREMENTS

2.2 INVESTMENTS (` in crore)

Particulars 2015-16 2014-15

(1) Value of Investments

(i) Gross Value of Investments

(a) In India 6,594.44 6,145.48

(b) Outside India NIL NIL

(ii) Provisions for Depreciation

(a) In India 49.04 41.69

(b) Outside India NIL NIL

(iii) Net Value of Investments

(a) In India 6,545.40 6,103.79

(b) Outside India. NIL NIL

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(2) Movement of provisions held towards Depreciation on investments.

(i) Opening balance 41.69 43.28

(ii) Add: Provisions made during the year 8.65 19.92

(iii) Less: Write-off / write-back of excess provisions during the year 1.30 21.51

(iv) Closing Balance 49.04 41.69

2.2 INVESTMENTS (Contd.) (` in crore)


2.2.1 Repo Transactions (in face value terms) (` in crore)

Minimum Maximum Daily Average Outstandingoutstanding outstanding outstanding As on

during during during March 31, the year the year the year 2016

Securities sold under repo

I. Government Securities 10.40 676.00 295.83 312.00(18.72) (447.20) (79.98) (254.80)

II. Corporate debt Securities Nil Nil Nil Nil(Nil) (Nil) (Nil) (Nil)

Securities purchased under reverse repo

I. Government Securities 10.40 234.00 27.67 234.00(10.40) (208.00) (38.22) (114.40)

II. Corporate debt Securities Nil Nil Nil Nil(Nil) (Nil) (Nil) (Nil)

(Figures in bracket indicates in previous year)

2.2.2 Non-SLR Investment Portfolio

i) Issuer composition of Non SLR investments: (` in crore)

No. Issuer Amount Extent of Extent of Extent of Extent ofPrivate ‘Below ‘Unrated’ ‘Unlisted’

Placement Investment Securities SecuritiesGrade’

Securities

(1) (2) (3) (4) (5) (6) (7)

1 PSUs 137.79 85.84 0 0 0

2 FIs 51.54 21.00 0 0 0

3 Banks 45.54 28.00 0 0 0

4 Private Corporate 230.37 187.30 15.88 15.88 35.88

5 Subsidiaries / Joint Ventures 0 0 0 0 0

6 Others 279.78 273.62 0 0 0

7 Less: Provision held towardsdepreciation -49.04 xxx xxx xxx xxx

Total 695.98 595.76 15.88 15.88 35.88

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

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Opening balance 10.78 8.74

Additions during the year since 1st April 1.27 2.04

Reductions during the above period 2.00 0.00

Closing balance 10.05 10.78

Total Provisions held (*) 9.11 9.14

(*) An amount of $ 0.94 Crore (PY $ 1.64 Crore) received towards part settlement is parked under sundries account.

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

2.2.3 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 HTMcategory as at the beginning of the year. The details of HTM category as on 31.03.2016 are furnished hereunder:

(` in crore)


i) The notional principal of swap agreements NIL NIL

ii) Losses which would be incurred if counter parties failed to fulfillobligations under the agreements NIL NIL

iii) Collateral required by the bank upon entering into swaps NIL NIL

iv) Concentration of credit risk arising from the swaps NIL NIL

v) The fair value of the swap book NIL NIL

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

S.No. Particulars 2015-16 2014-15

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

(ii) Notional principal amount of exchange traded interest rate derivatives outstandingas on 31st March 2016 (instrument-wise) NIL NIL

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

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

2.3.3 Disclosures on risk exposure in derivatives

Qualitative Disclosure:

The only derivatives dealt by the bank in the foreign exchange market is Forward Contracts. Forward contracts are being used tohedge / cover the exposure in foreign exchange arising out of merchant transaction and trading positions.

To cover the risk arising out of the above derivatives, various limits like IGL, AGL and Stop Loss Limits have been prescribed in theTreasury Policy of the Bank, which are monitored by mid-office. The mark-to-market values are monitored on monthly basis for ForeignExchange Forward Contracts. The operations are conducted in terms of the policy guidelines issued by RBI from time to time.

2.3 Derivatives

2.3.1 Forward Rate Agreement / Interest Rate Swap: (` in crore)

Market Value 4,361.78

Book value 4,336.76

Excess of book value over market value for which Provision is not made NIL

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Sl.Particular

Currency Derivatives Interest rate Derivatives

No. 2015-16 2014-15 2015-16 2014-15

(i) Derivatives (Notional Principal Amount) NA NA NA NAa) For hedging NA NA NA NAb) For trading NA NA NA NA

(ii) Marked to Market Positions NA NA NA NAa) Asset (+) NA NA NA NAb) Liability (-) NA NA NA NA

(iii) Credit Exposure NA NA NA NA

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

(v) Maximum and Minimum of 100*PV01 observed during the year NA NA NA NAa) On hedging NA NA NA NAb) On trading NA NA NA NA

2.3.4 Shifting of securities:

For the year ended 31.03.2016, Bank has shifted securities of the face value of $ 639.28 Crore (previous year $ 95.00 Crore) fromHTM to AFS category and no loss (previous year loss of $ 0.12 Crore) arose on such transfers.

2.3.5 SLR Securities: ($ in crore)

As at 31.03.2016 As at 31.03.2015

ParticularsBook Market Book MarketValue Value Value Value

Government Securities * SLR (CG, SG,TB) 5,849.43 5,877.23 5,156.84 5,191.82

Approved securities - SLR 0.00 0.00 0.00 0.00

* Net of securities pledged under REPO ` 78.00 Crore (PY ` 140.40 Crore).

2.4 Asset Quality

2.4.1 Non-Performing Assets: (` in crore)


(i) Net NPAs to Net Advances (%) 1.18% 1.85%

(ii) Movement of NPAs (Gross)(a) Opening balance 454.62 546.46(b) Additions during the year 196.90 256.30(c) Reductions during the year 260.27 348.14(d) Closing balance 391.25 454.62

(iii) Movement of Net NPAs(a) Opening balance 302.49 443.39(b) Additions during the year 166.32 229.97(c) Reductions during the year 237.17 370.87(d) Closing balance 231.64 302.49

(iv) Movement of provisions for NPAs (excluding provisions on standard assets)(a) Opening balance 116.35 53.23(b) Provisions made during the year 94.95 138.35(c) Write-off/ write-back of excess provisions 97.83 75.23(d) Closing balance 113.47 116.35

Quantitative Disclosures: (` in crore)

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2.4.

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31

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32

2.4.3 Details of financial assets sold to Securitization / Reconstruction Company for Asset Reconstruction

(A) Details of Sales: (` in crore)


(i) No. of accounts 13 1517

(ii) Aggregate value (net of provisions) of accounts sold to SC/RC 166.25 242.48

(iii) Aggregate consideration 67.53 119.38

(iv) Additional consideration realized in respect of accounts transferred in earlier years 0.00 0.00

(v) Aggregate profit / (loss) over net book value. (98.72) (123.10)

(B) NPA Assets Sold to ARC: (` in crore)

Backed by NPAs sold by theBacked by NPAs sold by other banks /

Particulars bank as underlyingfinancial institutions / non-banking Totalfinancial companies as underlying

2015-16 2014-15 2015-16 2014-15 2015-16 2014-15

Book value of 279.20 178.00 8.08 8.08 287.28 186.08investments insecurity Receiptsas at 31st March

2.4.4 Details of non-performing financial assets purchased / sold:

A. Details of non-performing financial assets purchased: (` in crore)


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)


1. No. of accounts sold NIL NIL

2. Aggregate outstanding NIL NIL

3. Aggregate consideration received NIL NIL

C. Disclosure regarding amortization of Loss on sale of assets to ARCs

RBI vide its circular no.DBR.No.BP.BC.94/ 21.04.048/2014-15 dated 21.05.2015 has extended permission to Banks to provide the netshortfall on account of sale of assets up to 31.03.2016 to Asset Reconstruction Company over a period of two years. Consequently,` 76.33 Crore (previous year ` 27.43 Crore) has been charged to Profit & Loss account for the year ended 31st March 2016.The unamortized amount on this account as on 31st March 2016 is ` 95.60 Crore (previous year ` 72.99 Crore)

2.4.5 Provisions on Standard Assets: (` in crore)


Provisions towards Standard Assets 72.23 55.23

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2.6 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 TotalItems days days days to 3 months months & months & upto 3 years years & upto years

upto 6 months upto 1 year 5 years

Deposits 280.17 525.09 793.08 579.69 2843.73 2342.24 4063.93 8252.73 1740.28 4010.02 25430.96

(241.69) (423.42) (769.57) (687.62) (2605.76) (2400.11) (4197.23) (6172.48) (1244.87) (3221.46) (21964.21)

Advances (Net) 230.48 461.11 262.48 629.64 1879.01 1195.63 3212.66 7465.78 1292.61 3014.34 19643.74

(189.48) (407.76) (399.76) (694.79) (3435.33) (937.05) (1850.89) (6444.97) (699.34) (1292.66) (16352.02)

Investments (Net) 82.71 68.81 74.61 74.50 100.07 30.01 14.59 482.57 519.14 5098.40 6545.41

(165.70) (78.84) (0.00) (115.99) (247.22) (166.02) (127.39) (532.28) (643.10) (4027.26) (6103.78)

Borrowings 0.00 24.81 0.00 0.00 30.00 0.00 0.00 399.50 0.00 268.70 723.01

(0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (100.00) (229.50) (0.00) (128.60) (458.10)

Foreign Currency 90.57 0.13 5.41 7.24 26.25 16.41 11.41 0.00 0.00 0.00 157.42

Assets (69.68) (0.22) (0.00) (1.09) (16.99) (24.43) (13.72) (0.00) (0.00) (0.00) (126.13)

Foreign Currency 31.27 0.00 0.00 0.10 6.94 6.63 13.17 12.96 25.09 0.00 96.16

Liabilities (25.74) (0.25) (0.00) (0.10) (0.54) (1.29) (14.39) (8.45) (7.97) (0.00) (58.73)

(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.

2.5 Business Ratios:


(i) Interest Income as a percentage to Working Funds 9.89 10.16

(ii) Non-interest income as a percentage to Working Funds 1.17 1.30

(iii) Operating Profit as a percentage to Working Funds 1.57 1.73

(iv) Return on Assets 0.69 0.61

(v) Business (Deposits plus advances) per employee (` in crore) 10.99 9.55

(vi) Profit per employee (` in crore) 0.04 0.03

2.7 Exposures

2.7.1 Exposure to Real Estate Sector: (` in crore)

Category 2015-16 2014-15

a) Direct exposure

(i) Residential Mortgages – 410.93 325.85

Lending fully secured by mortgages on residential property that is or will be occupiedby the borrower or that is rented; (Individual housing loans eligible for inclusion inpriority sector advances may be shown separately).

(ii) Commercial Real Estate – 1476.78 819.14

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 includenon-fund based (NFB) limits;

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2.7.2 Exposure to Capital Market: (` in crore)


(i) Direct investment in equity shares, convertible bonds, convertible debentures and unitsof equity-oriented mutual funds the corpus of which is not exclusively invested incorporate debt; 69.97 30.13

(ii) Advances against shares / bonds / debentures or other securities or on clean basis toindividuals for investment in shares (including IPOs / ESOPs), convertible bonds,convertible debentures, and units of equity-oriented mutual funds; NIL 2.26

(iii) Advances for any other purposes where shares or convertible bonds or convertibledebentures or units of equity oriented mutual funds are taken as primary security; 5.88 0.31

(iv) Advances for any other purposes to the extent secured by the collateral security of sharesor 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; NIL NIL

(v) Secured and unsecured advances to stockbrokers and guarantees issued on behalf ofstockbrokers and market makers; 10.00 10.62

(vi) Loans sanctioned to corporates against the security of shares / bonds/debentures orother securities or on clean basis for meeting promoter's contribution to the equity ofnew 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 orconvertible 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 85.85 43.32

2.7.1 Exposure to Real Estate Sector (Contd.) (` in crore)

Category 2015-16 2014-15

(iii) Investments in Mortgage Backed Securities (MBS) and other securitisedexposures -

(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) andHousing Finance Companies (HFCs). 47.95 36.53

Total Exposure to Real Estate Sector 1935.66 1181.52

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2.7.4 Details of Single Borrower Limit (SBL)/ Group Borrower Limit (GBL) exceeded by the bank.

A. SBL exceeded by the Bank for the period 01/04/2015 to 31/03/2016 .......... NIL (PY NIL)

B. GBL exceeded by the Bank for the period 01/04/2015 to 31/03/2016 .......... NIL (PY NIL)

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

As on As onParticulars 31-3-2016 31-3-2015

The total amount of Advances for which intangible Securities such as chargeover the rights, licenses, Authority etc. has been taken. 26.72 33.64

Estimated value of such intangible collaterals 81.47 104.50

2.8 Miscellaneous

2.8.1 Disclosure of Penalties imposed by RBI:

RBI has imposed a total penalty of $ 9300 on account of Counterfeit Notes detection.

3. Disclosure in terms of Accounting Standards:

3.1 Accounting Standard 5: Net Profit 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 Profit & Loss account, which requires a disclosure as perAccounting Standard 5

There has been no change in the Accounting policies followed by the bank during the year ended 31.03.2016 as compared to those inthe preceeding financial year ended 31.03.2015.

3.2 Accounting Standard 9: Revenue Recognition:

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

3.3 Disclosure in terms of AS 10 - Fixed Assets (Revaluation of Premises):

In accordance with banks stated policy, revaluation of the premises in its fixed assets portfolio was carried out during the year by thebank using the services of Banks approved empanelled Independent valuers. Appreciation arising out of such revaluation was accountedwith corresponding credit to Revaluation Reserves. The details are as under;

(` in crore)

Original Cost of Premises 60.84

Incremental Value on account of revaluation made in 2011 - ` 81.51

Incremental Value on account of revaluation made in 2016 - ` 93.99 175.50

Depreciation on Original Cost - ` 6.72

Depreciation on Revalued Cost - ` 3.76 -10.48

Written Down Value of such revalued assets 225.86

2.7.3 Risk Category wise Country Exposure (As compiled by Management): (` in crore)

Risk Category Exposure (net) as at Provision held as at Exposure (net) as at Provision held as at31.3.2016 31.3.2016 31.3.2015 31.3.2015

Insignificant 140.87 NIL 111.30 NIL

Low 72.59 NIL 73.67 NIL

Moderate 3.52 NIL 3.76 NIL

High 0.00 NIL 0.15 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 216.98 NIL 188.88 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.

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36

3.4 Accounting Standard 15 - Employee Benefits:

3.4.1 The bank is following Accounting Standard 15 (Revised 2005) "Employee Benefits" as under:

(1) In respect of contributory plans viz.- Provident Fund and Contributory Pension Scheme, the bank pays fixed contribution at pre-determined rates to a separate entity, which invests in permitted securities. The obligation of the bank is limited to such fixedcontribution.

(2) In respect of Defined Benefit Plans, viz. Gratuity and pension as well as for leave encashment, provision has been made basedon actuarial valuation as per the guidelines.

(3) The summarized position of Post-employment benefits and long term employee benefits recognized in the profit and loss accountand 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)

ParticularsGratuity Pension Leave Encashment

(Funded) (Funded) (Unfunded)

Discount Rate 8.0% 8.0% 8.0%

Expected Rate of return on Plan Assets 9.5% 8.0% 0.0%

II. Change in the Present value of obligations: (` in crore)

ParticularsGratuity Pension Leave Encashment

(Funded) (Funded) (Unfunded)

Present Value of obligations as at the beginning of the year 68.89 238.48 38.04

Interest Cost 5.15 17.18 2.84

Current Service Cost 3.95 72.19 3.20

Past service cost (non-vested benefits) 0.00 0.00 0.00

Past service cost (vested benefits) 0.00 0.00 0.00

Benefits Paid 9.05 47.36 5.20

Actuarial loss / (gain) on obligation (balancing figure) -2.92 -10.81 2.77

Present Value of obligations as at the year end 66.02 269.68 41.65

III. Change in Fair Value of Plan Asset: (` in crore)

Particulars Gratuity Pension Leave Encashment(Funded) (Funded) (Unfunded)

Fair value of Plan Assets at the beginning of the year 68.89 238.48 0.00

Expected return on Plan Assets 6.54 19.08 0.00

Employer's Contribution 4.61 18.45 0.00

Benefits Paid 9.05 47.36 0.00

Actuarial loss/(gain) on plan assets (balancing figure) -0.33 15.17 0.00

Fair Value of Plan Asset at the end of the year 70.66 243.82 0.00

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


Expected return on plan assets 6.54 19.08 0.00

Actuarial gain / (loss) on plan assets -0.33 15.17 0.00

Actual return on plan assets 6.21 34.25 0.00

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V. Actuarial Gain / Loss recognized: (` in crore)


Actuarial gain/(loss) for the Period - Obligation -2.91 -10.81 2.77

Actuarial gain/(loss) for the Period - Plan Assets -0.33 15.17 0.00

Total (gain)/loss for the period -2.58 -25.98 2.77

Actuarial (gain)/loss recognized in the period -2.58 -25.98 2.77

Unrecognized actuarial (gain)/loss at the end of the year 0.00 0.00 0.00

VI. Amount recognized in Balance Sheet: (` in crore)


Present value of the Obligation 66.02 269.68 41.65

Fair value of plan assets 70.66 243.82 0.00

Difference -4.64 25.86 41.65

Unrecognized Transitional liability 0.00 0.00 0.00

Unrecognized past service cost (non vested benefits) 0.00 0.00 0.00

Liability recognized in the Balance Sheet -4.64 25.86 41.65

VII. Expenses Recognized in Profit & Loss Account: (` in crore)


Current Service Cost 3.95 72.19 3.20

Interest Cost 5.15 17.18 2.84

Expected return on Plan assets 6.54 19.08 0.00

Net actuarial (gain) / loss recognized in the year -2.58 -25.98 2.77

Transitional Liability recognized in the year 0.00 0.00 0.00

Past service cost (non-vested benefits) 0.00 0.00 0.00

Past service cost (vested benefits) 0.00 0.00 0.00

Expenses Recognized in Profit & Loss Account -0.02 44.31 8.81

VIII. Movements in the Liability Recognized in the balance Sheet (` in crore)


Opening net Liability 0.00 0.00 38.04

Opening amount determined under para 55 of AS15R 0.00 0.00 0.00

Expense as Above -0.02 44.31 8.81

Contribution/ Benefits paid 4.61 18.45 5.20

Closing Net Liability -4.63 25.86 41.65

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38

IX. Amount for the Current Period: (` in crore)


Present value of Obligation 66.02 269.68 41.65

Plan Assets 70.66 243.82 0.00

Surplus / (Deficit) -4.64 25.86 41.65

Experience adjustments on Plan Liabilities - (loss) / gain 0.00 0.00 0.00

Experience adjustments on Plan Assets - (loss) / gain 0.00 0.00 0.00

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

Particulars Gratuity Pension(Funded) (Funded)

Government of India Securities 12.28 5.30

State Government Securities 50.77 32.57

High Quality Corporate Bonds 27.48 23.09

Equity Share of listed companies 0.00 0.00

Property 0.00 0.00

Special Deposit Scheme 1.52 0.00

Balance with Bank Account 5.51 0.85

Balance held at LIC India's Running account 0.00 7.00

Annuity under Return of Purchase Price 0.00 19.35

Amount Receivable from Bank 0.00 9.40

Others (Amount receivable from Bank) 2.44 2.44

Total 100.00 100.00

XI. Enterprises Best Estimate: (` in crore)

Particulars Gratuity Pension Leave Encashment

Enterprise’s Best Estimate of Contribution during next year 6.23 36.26 5.88

3.5 Employee Stock Option Scheme:

As on 31.03.2015, options in force were 545000, of which 295000 shares were exercised during 2015-16 and the remaining optionsexpired. Thus as on 31.03.2016, the options in force are NIL

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3.6 Accounting Standard 17 - Segment Reporting:

PART A : BUSINESS SEGMENTS (` in crore)

Year ended Year endedParticulars 31-3-2016 31-3-2015

(Audited) (Audited)

1. SEGMENT REVENUE :

a. Treasury operations 595.64 553.33

b. Corporate / wholesale banking operations 860.19 579.20

c. Retail banking operations 1403.47 1343.21

d. Other banking operations 13.53 22.82

TOTAL 2872.83 2498.56

2. SEGMENT RESULTS (Operating Profit):


b. Corporate / wholesale Banking operations 115.48 80.53


d. Other banking operations 10.77 20.43

TOTAL 407.12 368.41

OPERATING PROFIT (including exceptional items) 407.12 368.41

PROVISIONS OTHER THAN TAX 176.89 180.20

PROFIT BEFORE TAX 230.24 188.21

Less : Tax expenses 50.00 55.92

NET PROFIT 180.24 132.29

3. CAPITAL EMPLOYED :


b. Corporate / wholesale banking operations 217.09 213.24


d. Unallocated Assets 497.21 378.84

TOTAL 1763.59 1556.14

PART B - GEOGRAPHICAL SEGMENTS : Since the Bank is having domestic operations only, no reporting is made underinternational segment.

Previous period's figures have been regrouped, wherever necessary to conform to the current period's classification.

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3.7 Accounting Standard 18 - Related Party Disclosures:

Payment to and Provision for Employees includes remuneration paid to Key Managerial Persons of the Bank for the period from01/04/2015 to 31/03/2016, as detailed below:

S. No. Name Designation

1 Mr. Rakesh Sharma Managing Director & CEO(01.04.2015 to 09.09.2015)

2 Mr. Parthasarathi Mukherjee Managing Director & CEO(From 25.01.2016)

3. Mr. M. Palaniappan President & CFO

3 Mr. N. Ramanathan Company Secretary

(` in crore)

Items / Related Party Parent (as per Subsidiaries Associates / Key Relatives of Totalownership Joint Management Key Manage-or control) Ventures Personnel ment Personnel

Borrowings NIL NIL NIL NIL NIL NIL

Deposits NIL NIL NIL NIL NIL NIL

Placement of Deposits NIL NIL NIL NIL NIL NIL

Advances NIL NIL NIL NIL NIL NIL

Investments NIL NIL NIL NIL NIL NIL

Non-Funded Commitments NIL NIL NIL NIL NIL NIL

Leasing / HP arrangementsprovided NIL NIL NIL NIL NIL NIL

Leasing / HP arrangementsavailed NIL NIL NIL NIL NIL NIL

Purchase of Fixed Assets NIL NIL NIL NIL NIL NIL

Sale of Fixed Assets NIL NIL NIL NIL NIL NIL

Interest Paid NIL NIL NIL NIL NIL NIL

Interest Received NIL NIL NIL NIL NIL NIL

Rendering of Services NIL NIL NIL NIL NIL NIL

Receiving of Services NIL NIL NIL 2.61 NIL 2.61

Management Contracts NIL NIL NIL NIL NIL NIL

3.8 Accounting Standard 20 - Earnings per Share (EPS):

EPS calculation in accordance with the AS-20 issued by the ICAI is as under:


Net profit after Tax (` In Crore) 180.24 132.29

Weighted Average - No. of Equity shares 179,364,546 144,387,493

Weighted Average - No. of Diluted Equity shares 179,364,546 144,615,899

Earnings per share - Basic (`) 10.05 9.16

Earnings per share - Diluted (`) 10.05 9.15

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41

3.9 Accounting Standard 22 - Accounting for Taxes on Income:

The bank has accounted for Income Tax in compliance with AS 22. Accordingly, Deferred Tax Assets & Liabilities are recognized.The major components of DTA / DTL are furnished as under:

(` in crore)

Particularsonents Deferred Tax Assets Deferred Tax Liabilities

Deferred Tax Components 2015-16 2014-15 2015-16 2014-15

Provision for leave encashment 14.41 13.60 0.00 0.00

Depreciation on fixed assets 0.00 0.00 8.95 4.60

Provision for wage arrears 0.00 9.97 0.00 0.00

Provision for other assets 19.88 5.72 0.00 0.00

Provision for advances 79.02 58.94 0.00 0.00

Special Reserve u/s 36(i)(viii) 0.00 0.00 19.54 14.09

Others 0.59 5.67 33.19 0.00

CLOSING BALANCE 113.90 93.90 61.68 18.69

Net DTA 52.22 75.21

3.10 Intangible Assets AS 26:

The Bank has followed AS 26 - Intangible asset issued by ICAI and the guidelines issued by the RBI in this regard.

3.11 Accounting Standard 28 - Impairment of Assets:

A substantial portion of the bank's assets comprises financial assets to which Accounting Standard 28 is not applicable. In theopinion of the bank management, there is no impairment of other assets as at 31st March 2016 requiring recognition in terms of thesaid standard.

3.12 Details of movement in provisions in accordance with Accounting Standard 29: (` in Crore)

Opening Provision Provision ClosingParticulars as on made during reversed / as on

01.04.2015 the year adjusted 31.03.2016

Prov. for Standard Assets 55.23 17.00 0.00 72.23

Prov. for Bad and Doubtful debts 116.35 176.76 179.64 113.47

Prov. for Income Tax (net of deferred tax) 206.85 50.00 17.00 239.85

Prov. for depreciation in market value of Investments 41.69 8.65 1.30 49.04

Prov. for Other assets 3.45 0.46 0.00 3.91

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 Benefit Tax 1.90 0.00 0.00 1.90

Prov. for Dividend (incl. Div. Tax) 43.01 64.80 43.01 64.80

Prov. for Restructured Advances & FITL 118.18 0.00 7.38 110.80

Provision for Foreign Currency Unhedged 1.30 0.40 0.00 1.70

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4. Additional Disclosures:

4.1 Provisions and Contingencies: Break up of 'Provisions & Contingencies' shown under the head Expenditure in Profit &Loss Account:

(` in crore)


Provision towards Standard Asset 17.00 10.52

Provision towards NPA 176.76 109.72

Provision for MAT Credit (19.00) 0.00

Provision for depreciation in market value of Investments 8.65 (1.47)

Provision for Gratuity (Amortised) 0.00 3.06

Provision for Pension (Amortised) 0.00 15.56

Provision for Restructured Advances (Economic sacrifice) & FITL (7.38) 41.51

Provision for Foreign Currency Unhedged 0.40 1.30

Provision for Other Assets 0.46 0.00

Sub Total 176.89 180.20

Provision for Income Tax 50.00 55.92

Total 226.89 236.12

4.2 Movement of Counter Cyclical Provisioning Buffer: (` in crore)


(a) Opening balance in the account 14.71 29.43

(b) Provision made in the accounting year 0.00 0.00

(c) Amount of drawdown made during the accounting year 0.00 14.72

(d) Closing balance in the account 14.71 14.71

4.3 Draw Down from Reserves:

During the year under review, a sum of ` 4.32 Crore being the Rights issue expenditure incurred in Financial year 2014-15 anddebited to Sundry Assets accounts, on approval, was appropriated to Share Premium account.

As permitted by RBI, the entire balance of ̀ 0.73 Crore in Investment Reserve account was transferred to Profit and Loss Appropriationaccount towards depreciation on Investment in AFS and HFT categories.

The bank has transferred a sum of ` 0.71 Crore being the depreciation on revalued portion of premises directly to General Reserve.

4.4 Disclosure of complaints (As compiled by Management):

A. Customer Complaints:

(a) No. of complaints pending at the beginning of the year 0

(b) No. of complaints received during the year 562

(c) No. of complaints redressed during the year 560

(d) No. of complaints pending at the end of the year 2

ATM complaints through Dispute Management Systems (DMS)- NPCI

(a) No. of complaints pending at the beginning of the year 12

(b) No. of complaints received during the year 1004

(c) No. of complaints redressed during the year 990

(d) No. of complaints pending at the end of the year 26

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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

4.5 Disclosure of Letters of Comfort (LOCs) issued by Banks: (` in crore)

Particulars Amount

Letters of comfort issued in earlier years and outstanding as on 01-04-2015 8.88

Add: Letters of Comfort issued during FY 2015-16 15.44

Less: Letters of Comfort expired during FY 2015-16 7.38

Letters of Comforts Outstanding as on 31-03-2016 16.94

4.6 Provisioning Coverage ratio:

The provision coverage ratio of the Bank as on 31.03.2016 is 68.55%.

4.7 Bancassurance Business:

Fees, remuneration received from Bancassurance business:

For the year ended 31.03.2016, the bank received Gross Commission income of $ 6.05 Crore from Bancassurance business,of which $ 4.85 Crore from life insurance segment and $ 1.20 Crore from general insurance segment.

4.8 Concentration of Deposits, Advances, Exposures and NPAs:

4.8.1 Concentration of Deposits: ($ in crore)

Total Deposits of twenty largest depositors 4,420.97

Percentage of Deposits of twenty largest depositors to Total Deposits of the bank 17.38%

4.8.2 Concentration of Advances: ($ in crore)

Total Advances to twenty largest borrowers 2,525.83

Percentage of Advances to twenty largest borrowers to Total Advances of the bank 11.43%

4.8.3 Concentration of Exposures: ($ in crore)

Total Exposure to twenty largest borrowers/customers 2,902.26

Percentage of Exposures to twenty largest borrowers/customers to Total Exposure of the bank onborrowers /customers 12.86%

4.8.4 Concentration of NPAs: ($ in crore)

Total Exposure to top four NPA accounts 158.32

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4.9 Sector-wise Advances (As compiled by Management): (` in crore)

Sl.Sector

2015-2016 2014-2015

No.O/s Total Gross % of Gross NPAs O/s Total Gross % of Gross NPAs

Advances NPA to Total Advances Advances NPA to Total Advancesin that Sector in that Sector

(A) Priority Sector

1. Agriculture and allied activities 3065.60 14.54 0.47% 2417.14 12.39 0.51%

2. Industries 1440.65 35.62 2.47% 1484.13 40.22 2.71%

3. Services 2368.40 31.82 1.34% 1633.02 28.75 1.76%

4. Personal Loans 448.08 8.85 1.98% 275.56 11.31 4.10%

Sub Total (A) 7322.73 90.83 1.24% 5809.86 92.66 1.59%

(B) Non Priority Sector

1. Agriculture and allied activities 0.00 0.00 0.00% 0.00 0.00 0.00%

2. Industries 3463.91 206.74 5.97% 3581.16 257.65 7.13%

3. Services 4827.79 65.14 1.35% 3977.16 93.87 2.36%

4. Personal Loans 2172.17 4.93 0.23% 1667.61 6.21 0.37%

5. Others 2032.33 23.61 1.16% 1477.05 4.22 0.29%

Sub Total (B) 12496.20 300.42 2.40% 10702.98 361.95 3.37%

Total (A+B) 19818.93 391.25 1.97% 16512.84 454.62 2.75%

4.10 Movement of NPAs (As compiled by Management): (` in crore)

Particulars 2015-2016 2014-2015

Gross NPAs as on 1st April (Opening Balance) 454.62 546.46

Additions (Fresh NPAs) during the year 196.90 256.30

Sub-total (A) 651.52 802.76

Less:-

(i) Upgradations 21.20 114.48

(ii) Recoveries (excluding recoveries made from upgraded accounts) 169.81 179.18

(iii) Technical / Prudential write offs 68.88 14.92

(iv) Write-offs other than those under (iii) above 0.38 39.56

Sub-total (B) 260.27 348.14

Gross NPAs as on 31st March (closing balance) (A-B) 391.25 454.62

4.10.1 Details of Technical write-offs and recoveries made: (` in crore)

Particulars 2015-2016 2014-2015

Opening balance of Technical / Prudential written off accounts as at 1st April 317.84 385.85

Add: Technical / Prudential write offs during the year 68.88 14.92

Sub Total (A) 386.72 400.77

Less: Recoveries / reduction made from previously technical / prudential written - off accountsduring the year (B) 41.33 82.93

Closing balance as on 31st March (A-B) 345.39 317.84

4.11 Regrouping of Deposits placed with NABARD/SIDBI/NHB for meeting shortfall in Priority Sector Lending

Pursuant to RBI Cir.DBR.BP.BC.No.31/21.04.018/2015-16 dated 16.07.2015 the Bank has included its deposits placed with NABARD/SIDBI/NHB on account of shortfall in priority sector targets under Schedule 11-Other Assets'. Previously, the same has been accountedunder the head 'Investment'. Interest income on these deposits has been included under 'Interest Earned- Others'. Previously, suchinterest income was included under 'Interest Earned'-Income on Investments'.

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4.13 Off-balance Sheet SPVs sponsored :Name of the SPV sponsored

Domestic Overseas

NA NA

4. 14 Disclosure on Remuneration:

a. Qualitative disclosures:

(a) Information relating to the composition and mandate of theRemuneration Committee.

(b) Information relating to the design and structure of remunerationprocesses and the key features and objectives of remunerationpolicy.

(c) Description of the ways in which current and future risks are takeninto account in the remuneration processes. It should include thenature and type of the key measures used to take account ofthese risks.

(d) Description of the ways in which the bank seeks to linkperformance during a performance measurement period with level of remuneration.

(e) A discussion of the bank’s policy on deferral and vesting of variableremuneration and a discussion of the bank’s policy and criteria foradjusting deferred remuneration before vesting and after vesting

(f) Description of the different forms of variable remuneration(i.e. cash, shares, ESOPs and other forms) that the bank utilizesand the rationale for using these different forms.

The latest amendment to the policy was approvedby the HR Committee of the Board on 14.10.2015.

Performance is evaluated based on KeyPerformance indicators as approved by the Board.

ESOS and Performance incentives are thecomponents of variable remuneration

The members of the Nomination and Remunerationcommittee as on 31st March 2016 are 4.

(g) Number of meeting held by the remunerationcommittee during the financial year and remunerationpaid its members

Meeting of the Nomination andRemuneration Committee of theBoard (NRCB) was held 5 timesduring FY 2015-16 and the totalremuneration paid to thecommittee members is $ 5.45lacs.

One meeting of theCompensation & RemunerationCommittee of the Board(CRCB) having 5 members washeld. Remuneration paid tocommittee members is $ 0.60lacs; Two meetings of theNomination and RemunerationCommittee of the Board(NRCB) having 5 members washeld and the Remunerationpaid to the committee membersis $ 1.80 lacs

4.12 Overseas Assets, NPAs and Revenue:

Particulars (` in crore)

Total Assets NIL

Total NPAs NIL

Total Revenue NIL

b. Quantitative disclosures:


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(h) (i) Number of employees having received a variable remuneration award during the financial year. NIL NIL

(ii) Number and total amount sign-on awards made during the financial year. NIL NIL

(iii) a) Details of guaranteed bonus, if any, paid asjoining / Sign on bonus. NIL NIL

b) Details of performance Bonus / Allowance $ 35,00,000/- (2 persons) $ 42,00,000/- (3 persons)(iv) Details of severance pay, in addition to accrued benefits, Notice period pay

if any. NIL $ 5,65,626/-(3 persons)

(i) (i) Total amount of outstanding deferred remuneration, split into Grant of 12 lacs shares to NILcash, shares and shares - linked instruments and other forms. MD & CEO under ESOS

subject to approval of RBI

(ii) Total amount of deferred remuneration paid out in the $ 1.22 Crore NILfinancial year.

(j) Breakdown of amount remuneration awards for the financial yearto show fixed and variable, deferred and non-deferred.

(k) (i) Total amount of outstanding deferred remuneration and retainedremuneration exposed to ex-post explicit and/or implicit adjustments. NIL NIL

(ii) Total amount of reductions during the financial year due to ex-postexplicit adjustments. NIL NIL

(iii) Total amount of reductions during the financial year due to ex-postimplicit adjustments. NIL NIL

No Risk Takers were paidVariable Pay

No deferred and Non-deferred remuneration

No Risk Takers were paidVariable Pay

No deferred and Non-deferred remuneration

b. Quantitative disclosures: (Contd.)

4.15 Disclosures relating to securitization: NA

4.16 Credit Default Swaps: NIL

4.17 Intra – Group Exposure: (` in crore)

Particulars FY2015-16

(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.

4.18 Transfer to Depositors Education and Awareness Fund (DEAF): (` in crore)

Particulars FY2015-16 FY2014-15

Opening balance of amounts transferred to DEAF 10.10 NIL

Add: Amounts Transferred to DEAF during the year 7.66 10.10

Less: Amounts reimbursed by DEAF towards claims 0.04 NIL

Closing balance of amounts transferred to DEAF 17.72 10.10

4.19 Unhedged Foreign Currency Exposure:

Based on the declaration received from borrowers, the bank has estimated and provided towards the liability for Unhedged ForeignCurrency Exposure (UFCE) of their constituents in terms of RBI Circular No. BDOD.NO.BP.BC.85/21.06.200/2013-14 dated15th January 2014 and the total provision held as of 31st March 2016 is ` 1.70 Crore.

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5.1 Liquidity Coverage Ratio: (` in Crores)

2015-20162014-2015

(Quarter entered 31.03.2015 only)

Total Unweighted Total Weighted Total Unweighted Total WeightedValue (Average) Value (Average) Value (Average) Value (Average)

High Quality Liquid Assets

1. Total High Quality Liquid Assets (HQLA) – 797.68 – 834.06

Cash Outflows

2 Retail deposits and deposits from smallbusiness customers, of which 949.94 81.59 719.32 59.99

(i) Stable Deposits 268.04 13.40 238.73 11.94

(ii) Less stable Deposits 681.90 68.19 480.59 48.05

3 Unsecured wholesale funding, of which: 818.00 92.54 704.71 78.48

(i) Operational deposits(all counterparties) 74.66 18.66 56.57 14.14

(ii) Non-operational deposits(all counterparties) 743.34 73.88 648.14 64.34

(iii) Unsecured debt 0.00 0.00 0.00 0.00

4 Secured Wholesale funding 441.49 0.00 278.72 0.00

5. Additional requirements, of which 3216.03 282.63 2894.97 363.25

(i) Outflows related to derivative exposuresand other collateral requirements 7.66 7.66 10.26 10.26

(ii) Outflows related to loss of funding ondebt products 0.00 0.00 0.00 0.00

(iii) Credit and Liquidity facilities 1120.83 99.84 1027.03 195.27

6 Other contractual funding obligations 82.22 82.22 68.25 68.25

7 Other contingent funding obligations 2005.33 92.91 1789.43 89.47

8 Total Cash Outflows 5425.46 456.76 4597.72 501.72

Cash Inflows

9 Secured lending (e.g. reverse repos) 59.31 0.00 46.80 0.00

10 Inflows from fully performing exposures 2170.40 1085.20 1722.75 1188.24

11 Other cash inflows 83.21 66.54 87.09 87.09

12 Total Cash Inflows 2312.91 1151.74 1856.64 1275.33

Total Adjusted Total Adjusted5 Value Value

13 TOTAL HQLA 797.68 – 834.06

14 Total Net Cash Outflows 114.19 – 125.44

15 Liquidity Coverage Ratio (%) 698.56 – 664.91

4.20 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 24

(b) Amount involved (` In Crore) 22.17

(c) Quantum of Provision made, net of recoveries of ` 11.65 Crore 9.99

(d) Quantum of unamortized Provision debited from 'Other Reserves' (` In Crore) NIL

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5.2 Qualitative disclosure around LCR:

Based on RBI guidelines issued during June, 2014 and also other circulars subsequently thereon, the Bank has been computing theLiquidity 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 31.03.2016, the Bank has ` 971.55 Crore of HQLAs, of which, the main contribution isfrom Level - 1 type of assets with ` 871.73 Crore. The Level - 1 asset are in the form of surplus SLR investments / Excess CRR andCash in Hand.

As on 31.03.2016, after applying the respective haircuts as mentioned by RBI guidelines on LCR, the Bank has total amount of` 427.33 Crore of cash outflows and ` 4030.78 Crore of cash inflows over the next 30 days period. Of this total amount of` 427.33 Crore of cash outflows, the major component is in the form of unsecured wholesale funding and of the total ` 4030.78 Croreof cash inflows, the major cash inflows are in the form of amounts to be received from Non - Financial wholesale counterparties.

6. a) The disputed Income Tax demand outstanding as on 31.03.2016 amounts to ` 60.12 Crore (previous year ` 52.61 Crore) andis included under Item I of Schedule 12 (Contingent Liabilities). No provision is considered necessary in respect of thedisputed liabilities in view of favourable decisions by various appellate authorities on similar issues.

b) The Bank has recognized the Income Tax Liability of ` 50 Crore on its Book Profits in terms of section 115JB of the IncomeTax Act, 1961 and after considering the normal tax, a sum of ` 19 Crore being MAT credit entitlement under section 115 JAAof the Income Tax act, 1961 has been recognized and treated as an Asset.

7. During the year, the Bank has raised unsecured non-convertible, redeemable fully paid Basel III complaint Tier II bonds in thenature of debenture amounting to ` 140.10 Crore.

8. Previous year's figures have been regrouped / reclassified wherever considered necessary to conform to the currentyear's classification




D.L.N. RAO


Dr. P.A. SHANKAR


PRAKASH P. MALLYA

K. BABUJI






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DISCLOSURE UNDER PILLAR III OF BASEL III NORMS AS ON 31.03.2016I. SCOPE OF APPLICATION AND CAPITAL ADEQUACY

Table DF - 1

Scope of application

Lakshmi Vilas Bank is a private sector bank incorporated in 1926 at Karur. The bank doesn't have any subsidiaries under itsManagement. Hence the CRAR is computed on standalone basis only.

(i) 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 affiliation

(ii) Quantitative Disclosures:

List of group entities considered for consolidation.

Not applicable

The aggregate amount of capital deficiencies in all subsidiaries which are not included in the regulatory scope of consolidationi.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 AdequacyQualitative Disclosures:

A summary discussion of the bank's approach for assessing the adequacy of its capital to support current and futureactivities.

The Bank is exposed to Credit risk, Market risk, Operational risk and other Pillar II risks. Based on the scale of business operations,the bank has put in place respective regulatory approaches to compute the required capital of the bank and also the controls thatcommensurate with the risk profile of the bank. The capital requirement for the estimated future business levels are assessed atperiodic intervals. The bank has adopted the following approaches for computing the capital charge.

Credit Risk – Standardized Approach

Market Risk – Standardized Duration Approach

Operational Risk – Basic Indicator Approach

• The Business projections, capital requirement, assessment methodology, controlling mechanism, etc., have been discussed inICAAP document and it has been reviewed on yearly basis.

• CRAR has been computed based on the Basel III guidelines and it is well above the regulatory minimum level of 9.625% whichincludes the capital conservation buffer.

Quantitative Disclosures: (` in lacs)

Particulars No of Equity Shares Face Value Per share Amount

Authorized Capital 300000000 10 30000.00

Issued Capital 180969986 10 18097.00

Subscribed Capital 179461609 10 17946.16

Called up/paid up Capital 179461609 10 17946.16

The Bank's shares are listed on the National Stock Exchange Limited and Bombay Stock Exchange Limited.

As on 31.03.2016, the bank has not raised Capital in the form of additional Tier-I.

Tier 1 capital includes Equity share capital, Reserves comprising of statutory reserves, capital & other revenue reserves, sharepremium, Balance in profit & loss account, Revaluation reserves at a discount of 55% and Deferred tax assets to the extent permittedby RBI and less other intangible assets.

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Tier 2 Capital consists of the general provision on standard assets, loan loss reserve, provision on NPA assets sold, investmentfluctuation Reserve and Subordinated Bonds (discounted value)

Break up of capital funds: (` In lacs)

A. Tier I Capital Elements

1. Paid up capital 17946.16

2. Reserves and surplus 148242.98

3. Gross Tier I Capital 166189.14

4. Less (Intangible Assets) 9339.24

5. Net Tier I Capital 156849.9

B. Tier II Capital Elements

1. General Provisions and Loan loss Reserve 7255.79

2. Subordinated Debt (Lower Tier II bonds) 26940.00

3. Provision for restructured advances 3322.60

4. Provision for unhedged foreign currency exposure 170.19

5. Gross Tier II capital 37688.58

6. Less (Cross holdings) 1999.00

7. Net Tier II Capital 35689.58

Break up of Capital Requirements: (` In lacs)

Risk Type

b) Capital requirements for Credit Risk 147382.85

Portfolios subject to standardized approach

Cash & Bank 336.83

Loans and Advances 128608.23

Fixed Assets 3237.40

Other Assets 4384.14

Off Balance sheet Exposure 10816.25

c) Capital requirements for Market Risk 14293.33

Standardized Duration approach

Interest Rate Risk 12064.49

Foreign Exchange Risk (including gold) 190.79

Equity Risk 2038.05

d) Capital requirements for Operational Risk 12013.86

Basic Indicator approach 12013.86

Total Risk weight Assets (b+c+d)*100/9.625% 1804571.80

Total Eligible Capital Funds for CRAR 192539.48

CRAR (Basel III) 10.67%

e) Common Equity Tier 1, Tier I and Total Capital ratios:

For the top consolidated group; and for significant bank subsidiaries (stand alone or sub-consolidated depending on how theframework is applied).

Not applicable

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II. Risk Exposure and Assessment

General Qualitative Disclosure requirement:

Credit Risk:

The objectives of Credit risk management practices in the bank are the following:

� To ensure business continuity with growth and stability.

� To ensure that the bank holds adequate capital in alignment with risks undertaken as well as the regulatory requirements fromtime to time.

� To optimize risk-return profile by providing a framework for risk-based pricing.

� To provide decision support for entry / exit strategies.

� To provide a framework for monitoring risk profile of the bank through structured reports.

� To facilitate the identification of risks in various activities undertaken by the bank through its operating units.

� To provide guidance on measurement of risks and their quantification for assessing the level of risk under portfolio management.

� To provide guidance on risk mitigation for ensuring customer retention while promoting risk-reward consciousness at all levels ofoperation.

� To set / monitor prudential risk limits in tune with the business strategy, capital adequacy and regulatory prescriptions.

� To ensure the adherence to these risk limits through defining the reporting structures and systems.

� To ensure compliance with other regulatory prescriptions.

� The bank proposes to keep its overall risk profile as moderate and stable for the medium term.

Risk appetite and risk-return profile, credit risk strategy shall also include a statement of the banks willingness to grant credit basedon:

� exposure type (for example, commercial, consumer, real estate,etc.,),

� economic sector (e.g. textile, iron etc.),

� geographical location,

� currency,

� maturity,

� anticipated profitability,

� identification of target markets / business sectors (like priority sector lending) and

� the overall credit portfolio composition

� preferred levels of diversification & concentration tolerances.

Credit risk strategy of the bank shall provide continuity in approach considering cyclical approach of the economy and the resultingshifts in the composition and quality of the overall credit portfolio.

Strategy is being reviewed yearly in CRM policy.

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Comprehensive Risk Management Policy put in place and the same has been approved by Board. The hierarchy of the IRMD startsfrom Board of Directors. Board is responsible for approving & reviewing on a periodical basis credit risk related policies, strategy &limits. Further Board has sub level committee (IRMCB) to review the risk limits, monitor the functioning of the IRMC-E and issuenecessary directions if require.

The Scope and nature of risk reporting and / or measurement systems

Risk-rating model is an important tool and is an integral part of the Credit Risk Management. The benefits of a robust system basedrating model

� Serves as a single point indicator of diverse risks of a borrower

� Enables banks to take informed credit decisions in a consistent manner.

� Facilitates adoption of risk-based pricing.

� Arriving at Facility Risk rating for the particular facility/product based on the comforts of securities/guarantors.

Internal credit rating models / systems are an important tool in monitoring the quality of individual credits, as well as the totalportfolio. Bank has well-structured internal risk rating system which acts as a good means of differentiating the degree of credit riskin the different credit exposures of the bank. This will allow more accurate determination of the overall characteristics of the creditportfolio, concentrations, problem credits, and the adequacy of loan loss reserves.

Internal credit rating framework enables the Bank to standardize and uniformly communicate the "judgment" in credit selectionprocedures but is not a substitute to the vast lending experience accumulated by the bank's professional staff.

In order to make the credit risk assessment more consistent and effective, a two dimensional approaches to measure risk comprisingborrower risk (Obligor Rating) and transaction risk (Facility Rating) has been implemented.

Use of Risk Rating Models / Systems• Individual credit selection, wherein a borrower or a particular exposure/ facility is rated.• Pricing of the facility / loan• Deciding the limits & tenure of the proposed credit assistance.• Portfolio-level analysis and portfolio management• Frequency and intensity of monitoring of the exposures.• Internal MIS• General provision "reasonable over provisioning" in addition to statutory prescribed provision.• Assessing the aggregate risk profile of bank.

Organization Structure:

Organization StructureIRMD-Credit Risk Management

Board of Directors

Integrated Risk Mgt. Committee- Board

Integrated Risk Mgt. Committee - Executives(Credit Risk Mgt. Committee / ALCO /

Operational Risk Mgt. Committee)

Business Units Internal Audit

Integrated Risk Mgt. Deptt.(IRMD)

Market Risk Mgt. / AssetLiability Mgt. Dept.

Credit RiskMgt. Deptt.

Operational Risk Mgt.Deptt.

Independent Evaluation

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The Bank has a multi-tier structure for sanction of credit proposals, with proper delegation of lending powers at various levels ofofficers & executives, duly approved by Board.

The powers vested at each level depend on the quantum and type of the loan facility and the overall exposure to the borrower/group.

The Bank has a system under which the lending powers exercised by delegated authority are reported to and reviewed by a higherauthority under the Internal Loan Review Mechanism.

A two dimensional approach to measure risk comprising borrower risk (Obligor Rating) and transaction risk (Facility Rating) hasbeen implemented. The Credit Risk Assessment System (CRAS) operated through the risk rating models shall form the fulcrum ofcredit risk management.

Policies for hedging and / or mitigating risk and strategies and processes for monitoring the continuing effectiveness ofhedges / mitigants

As per the RBI guidelines, eligible financial collaterals have been taken into account for risk mitigation purpose.

Bank is having a system in place to monitor compliance with country exposure limits. Exceptions are reported, approved andrectified as per laid down procedures.

Bank is having an effective system in place to generate management reports which are detailed enough for the senior managementreview and to identify exceptions in a timely manner.

Market Risk:

Strategies and processes

The Bank has policies like Asset Liability Management Policy, Investment & Forex Risk Management Policy to address the liquidityrisk and market risk respectively arising out of its banking book and trading book of investment portfolio.

Mid office is functioning independent of treasury and it monitors limits, trigger of investments, cut (stop) loss limit, Open position limitetc., Further it assess various limits set out by RBI and as stipulated in Investment/ trading book Policy, and keeps track on ratingmigration of rated securities on a daily basis. It fixes the overall counter-party exposure limits (Banks & FIs)

The structure and organization of the relevant risk management function

The Asset Liability Committee (ALCO) is responsible for

� Managing Interest Rate Risk and Liquidity Risk of the Banking Books.

� Pricing of Assets and Liabilities.

� Monitor and control the quality of the Balance Sheet

� Review and control of limits, procedures, reports, ratios & market trends, which impact bank's Balance Sheet.

� Review the treasury operations including trading.

� Differential pricing of wholesale deposits be delegated to Planning & Development

The scope and nature of risk reporting and/or measurement systems

The ALM Policy will be operated through the Integrated Risk Management Department (IRMD) which is responsible for evolvingappropriate systems & procedures for ongoing identification & analysis of Balance Sheet risks and laying down parameters formanagement of these risks. IRMD will, therefore, have the responsibilities of periodic monitoring and control of the risks and thesame has been reported to IRMC-E & IRMC-B.

Policies for hedging and / or mitigating and strategies and processes for monitoring the continuing effectiveness of hedges /mitigants.

Board approved Investment and Forex policy are put in place. Policies for hedging/ mitigating risk and strategies and processes formonitoring the continuing effectiveness of hedges / mitigants are discussed in ALCO.

The Structural liquidity statement is prepared on a daily basis to analyze the liquidity profile of the bank in a static manner. Exchangerisk is managed by fixing limits on position limits - Day light and Overnight limits, single deal limit, stop loss limit and OverallOvernight Open Exchange position limit. Additional liquidity ratios reviewed on a quarterly basis against the limits set under stockapproach.

Interest rate risk is analyzed from earnings perspective using Traditional Gap analysis and Economic value perspective using DurationGap analysis on a Quarterly basis. Further stress testing process conducted under scenario as well as stock approach to estimatethe impact on various conditions.

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Operational Risk

Strategies and processes

The strategy for the overall management of operational risk is in alignment with the business objectives & risk appetite of the bankconsidering the size, nature and complexities of the bank activities.

The strategy towards operational risk management shall focus on:

The Structure and organization of the relevant risk management function

Operational Risk Management is organized within the IRMD and will report to the head of the risk. The hierarchy of ORM within theorganizational chart for governance purposes is presented below. These roles and responsibilities relate only to the activities relatingto operational risk management.partment

A well-defined Operational risk Management policy is put in place. The role of Board vests in setting business strategy, risk appetite,policies, governance, management framework, methodology of measurement and assessment, internal audit, report to stakeholderson risk management, etc.,

The Scope and nature of risk reporting and/or measurement systems

The scope of risk reporting is to establish an explicit operational risk management process that results in the identification, evaluation,assessment, measurement, analysis, monitoring, control, mitigation and reporting of operational risks. This process also includesindependent evaluation of operational risk management function by the Internal Audit Department and to report its findings to theBoard / Senior Management as an assurance for the effective discharge of responsibilities with respect to management of operationalrisk.

Policies and procedures are put in place for control / mitigate material operational risks to adjust the risk appetite / tolerance levelbased on its risk control and mitigation strategies. For those risks that cannot be controlled, the bank decides whether to acceptthese risks, reduce the level of business activity involved, or withdraw from this activity completely. Some major control/mitigationtechniques like sound internal control system, Insurance, Standards for Insurance Recognition, retention/self insurance, BusinessContinuity and Disaster Recovery Plan, Outsourcing of financial services, Information Technology security, Internal Audit, ExternalAudit, Reporting are deployed in the framework.

Interest Rate Risk in Banking Book

Strategies and Processes

Interest Rate Risk is measured in two different ways. Earnings perspective using Traditional Gap Analysis is to assess the impact ofadverse movement in interest rate on the Net Interest Income (Earnings at Risk) and economic value perspective using DurationGap Analysis to assess the impact of adverse movement in interest rate on the market value of Bank's equity.

Structure and Organization of Risk Management Function

ALM policy will manage and monitor the limits / guidance values / target set on interest rate risk of the Banking Book. IRMC-B andALCO at the executive level are responsible for efficient and effective management of Interest rate risk in Banks business.

Board of Directors

Integrated Risk Mgt. Committee - E

CFO(Chief Financial Officer)

Operational Risk ManagementDepartment

Operational Risk Coordinatorsfrom Business / Support Line

Business Head Audit Department

Audit Committeeof Board

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Scope and nature of risk reporting / measurement systems

The Duration/ Modified duration mainly depends on coupon, maturity and periodicity of payment of installments. Since the modifiedduration of the liabilities is less compared to the modified duration of assets, there would be fall in the equity value under majorstress. Modified duration of Equity is calculated on a quarterly basis. The capital charge for Interest rate risk in banking book isassessed based on drop in the Market value of equity under 200 bps changes in interest rate. The results of Traditional Gap analysisand Duration Gap analysis including the adherence to tolerance limit set in this regard are monitored and the same has been placedbefore ALCO/IRMC-B level.

Policies for hedging / mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/mitigants

Investment policy, Forex policy, ALM policy, Stress testing policy, Credit Risk Management Policy are put in place to measure,mitigate / hedge the various risks.

Table DF - 3

Credit Risk

Credit Risk: General Disclosures

Qualitative Disclosures:The general qualitative disclosure requirement with respect to credit risk, Includes the definitions of Past Due, NPA of a loan or aadvance and impaired assets (For Accounting Purposes), Out of order and Overdue. These definitions are as per the extant guidelinesof Reserve Bank of India.

Credit Risk

Credit risk in simple terms is the potential that bank's borrower or counterparty will fail to meet its obligations in accordance withagreed terms.

Credit risk is defined as the possibility of losses associated with default in repayment or diminution in the credit quality of borrowersor counterparties or diminution in the value of primary and/or collateral assets. In a bank's portfolio, losses stem from outright defaultdue to inability or unwillingness of a customer or counterparty to meet commitments in relation to lending, trading, settlement andother financial transactions.

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

Quantitative Disclosures:

Credit Risk Exposures (` in lacs)

Fund Based * 2666317.85

Non Fund Based 229475.85

Total Fund & Non Fund Based 2895793.70

* It includes loans/advances; fixed assets, other assets, cash, bank balances, balance with RBI and investments under HTM category.

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State Name Funded Exposure Non-Funded Exposure Total ExposureAndhra Pradesh 137093.71 14654.84 151748.55Chhattisgarh 1907.41 54.07 1961.48Gujarat 41396.45 2074.34 43470.79Haryana 3497.63 1424.81 4922.44Jharkhand 1847.61 25.00 1872.61Karanataka 218915.87 3105.06 222020.93Kerala 42616.72 103.38 42720.10Madhya Pradesh 4135.47 9.05 4144.52Maharashthra 272416.62 55372.64 327789.26New Delhi 100676.34 36150.56 136826.90Odisha 379.82 19.68 399.50Puducherry 8314.43 664.36 8978.79Rajasthan 4331.79 32.51 4364.30Tamilnadu 973385.72 71119.24 1044504.96Telangana 143520.28 39983.63 183503.91Uttar Pradesh 1358.48 24.45 1382.93West Bengal 27927.68 4658.24 32585.92Total 1983722.03 229475.86 2213197.89

Industry Wise distribution of Exposures: (` in lacs)

S. Industry Name Funded Non-funded Total % grossNo. credit1 Mining and Quarrying 20385.21 173.46 20558.67 0.932 Food Processing 25462.90 8434.50 33897.40 1.533 Beverages (excluding Tea & Coffee) and Tobacco 21434.64 63.31 21497.95 0.974 Textiles 106173.47 8721.09 114894.56 5.195 Leather and Leather products 627.41 4.00 631.41 0.036 Wood and Wood Products 16979.02 12249.82 29228.84 1.327 Paper and Paper Products 12560.53 712.73 13273.26 0.608 Petroleum (non-infra), Coal Products (non-mining) and

Nuclear Fuels 1075.25 303.49 1378.74 0.069 Chemicals and Chemical Products (Dyes, Paints, etc.) 27190.97 16987.04 44178.01 2.0010 Rubber, Plastic and their Products 7715.23 1054.92 8770.15 0.4011 Glass & Glassware 2714.62 5.67 2720.29 0.1212 Cement and Cement Products 16177.97 0.00 16177.97 0.7313 Basic Metal and Metal Products 92722.68 23418.33 116141.01 5.2514 All Engineering 21202.28 14373.63 35575.91 1.6115 Vehicles, Vehicle Parts and Transport Equipments 5598.87 11.50 5610.37 0.2516 Gems and Jewellery 11181.89 940.00 12121.89 0.5517 Construction 0.00 0.00 0.00 0.0018 Infrastructure 152130.07 59011.47 211141.54 9.54

Other Industries 30446.49 609.20 31055.69 1.40Residual Advance 1411942.53 82401.70 1494344.23 67.52Total 1983722.03 229475.86 2213197.89

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 Industrieswhich has crossed 5% of gross credit exposure are:

a) Infrastructure - 9.54%

b) Basic Metal and Metal Products - 5.25%

c) Textiles - 5.19%

Geographic wise Distribution of Exposures: (` in lacs)

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Residual Contractual maturity breakdown of assets (` in lacs)Cash Balance Balance Investments Call Money Repo- Advances Fixed Other

With RBI with Other Placements Asset Assets AssetsBanks

Overdue to 1 Day 31590.91 1450.44 1953.45 42216.63 0.00 0.00 23048.20 0.00 6306.82

2-7 Days 0.00 1896.05 0.00 14019.19 0.00 23400.00 46110.78 0.00 390.42

8-14 Days 0.00 2691.07 0.00 15014.28 0.00 0.00 26248.06 0.00 454.71

15-28 Days 0.00 1665.24 0.00 21719.43 0.00 0.00 62963.54 0.00 908.24

29 Days to 3 Months 0.00 8917.58 0.00 62243.33 0.00 0.00 187901.14 0.00 4025.73

3-6 Months 0.00 8837.23 0.00 51875.33 0.00 0.00 119563.18 0.00 5844.55

6 Months-1 Year 0.00 15483.64 0.00 88307.24 0.00 0.00 321265.80 0.00 0.00

1-3 Years 0.00 32793.63 61.25 204574.90 0.00 0.00 746577.48 0.00 73811.70

3-5 Years 0.00 6706.22 5.00 64715.51 0.00 0.00 129261.14 0.00 0.00

Over 5 Years 0.00 16618.21 0.00 100996.60 0.00 0.00 301529.12 36699.87 16066.86

Total 31590.91 97059.32 2019.70 665682.43 0.00 23400.00 1964468.42 36699.87 107809.02

Asset Quality (` in lacs)

Amount of Non-Performing Assets (Gross) 39124.99

Substandard 21382.14

Doubtful - 1 4153.33

Doubtful - 2 6729.64

Doubtful - 3 29.28

Loss 6830.60

Net NPA 23164.13

Gross NPA to gross advances (%) 1.97%

Net NPAs to Net advances (%) 1.18%

Movement of NPAs (Gross)

Opening Balance 33157.31

Additions during the period 14037.56

Reductions 8069.88

Closing Balance 39124.99

Movement of Provisions (` in lacs)

Specific GeneralProvision Provision

Opening Balance 14164.18 10625.14

Provisions made during the period 2426.18 107.65

Write off 0.00 0.00

Write back of excess provisions 5243.55 0.00

Any other adjustments, including transfers between provisions 0.00 0.00

Closing balance 11346.81 10732.79

Details of write offs and recoveries that have been booked directly to the Income statement

Write offs that have been booked directly to the income statement 338.92

Recoveries that have been booked directly to the income statement 443.17

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Table DF - 4

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 andunrated) in the following three major risk buckets as well as those that are deducted

(` in. lacs)

Particulars Below 100% 100% Risk More than 100% Grand TotalRisk Weight Weight Risk Weight

BV** RWA** BV RWA BV RWA BV RWA

Fund Based

Loans & Advances 1197606.46 463424.87 585139.66 576976.31 199146.76 295788.18 1981892.88 1336189.36

Investments 428378.09 0.00 0.00 0.00 0.00 0.00 428378.09 0.00

Other Assets* 185306.62 4041.71 60380.40 57315.85 8530.72 21326.80 254217.74 82684.36

Exposure under mitigation 448765.45 0.00 29015.88 0.00 4697.03 0.00 482478.36 0.00

Total Fund Based 1811291.17 467466.58 645520.06 634292.16 207677.48 317114.98 2664488.71 1418873.72

Non Fund Based inc. 43785.89 9861.43 134941.37 49556.92 48290.47 28955.77 227017.73 88374.12Contingent credit

Total Credit Risk Exposures 1855077.06 477328.01 780461.43 683849.08 255967.95 346070.75 2891506.44 1507247.84

* Other assets includes cash, balance with RBI, balance with other banks, fixed assets and others.

** BV: Book Value; RWA: Risk Weighted Assets.

Investments (` in lacs)

Amount of Non Performing Investments 1005.16

Amount of provisions held for non-performing investments 910.65

Movement of provisions for depreciation on Investments

Opening Balance 5746.63

Provisions made during the period (January 2016 to March 2016) 0.00

Write-off/Write - back of excess provisions 842.53

Closing Balance 4904.10

Major Industry break up of NPA (` in lacs)

Industry Gross NPA Specific Provision

Food Processing 5215.27 5215.27

Basic Metal and Metal Products 6146.52 899.49

Mining and Quarrying 4990.78 748.62

Chemical and Chemical Products 2989.14 494.84

Paper and Paper Products 1099.66 398.57

Textiles 1365.43 165.69

Infrastructure 615.01 115.54

Geographic wise Distribution of NPA and Provision (` in lacs)

Geography Gross NPA Specific Provision General Provision

Domestic 39124.99 11346.81 10732.79

Overseas 0.00 0.00 0.00

Total 39124.99 11346.81 10732.79

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Table DF - 5

Credit Risk Mitigation: Disclosures for Standardized Approaches

Quantitative 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 should be based on the current market value of the collateral and should not be biased in order to enable the bank, togrant a higher credit limit to the borrower or improve its internal credit rating, make a smaller amount of provision or continue interestaccrual for a problem credit.

Collateral should be 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 thepurpose of netting as credit risk mitigants as per the policy.

A more conservative approach should be adopted for valuing the collateral of problem credits because the forced-sale value, ratherthan the open market value, is likely to be closer to what eventually may be realized from an asset sale when the market conditionsare un-favorable. Therefore, a discount to the estimated market value should be applied where appropriate.

• 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 fixed 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 Certificates (with no lock-in period)

5. Life insurance policies with a declared surrender value of an insurance company which is regulated by an insurance sectorregulator.

6. Debt Securities issued by Public Sector Entities and other entities (including banks and other primary dealers) rated by chosenrating 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 sufficiently confident about themarket liquidity where these are

a) Issued by a bank

b) Listed on a recognized stock exchange,

c) Classified 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 justifies a rating below BBB (-) or A3 by a chosen Credit RatingAgency.

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, fixeddeposits, National Savings Certificate, Life Insurance Policies etc for reducing the capital buffer after applying applicable hair-cuts in the respective securities.

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Qualitative disclosures

General Disclosures on securitization exposures of the Bank

Objectives of Securitization activities of the Bank

Presently bank is having limited exposure towards securitization. Further bank will explore the possibilities of expanding the scopeof lending activities through securitization process and with the objective of managing the portfolio risk, credit risk, interest rate risk,liquidity risk and capital adequacy.

Securitization Process

Bank has a AAA rated securitization exposure in banking book. Before entering into the securitization transaction, the bank willcollect the information, which is nature from the originator. Further the information is historical in nature and such information will beuseful to understand the repayment schedule, cash flows, principle and other charges, credit risk on underlying assets, etc.,

Monitoring Mechanism

Monitoring of the pooled assets effectively carried out by the Regional Office Level. Further the existence of assets or unit inspectionfor the loans under the securitization pool is verified on random basis before disbursement.

Bank’s Policy on Securitization

Bank will not enter into a securitization transaction with originator whose External rating is not below than A category. Further bankconsiders the external rating of the Originator as well as Securitized portfolio which is carried out by a third party with a view toassess credit quality of the pool.

Quantitative Disclosure – Banking Book

Total Amount of exposures securitized by the Bank ` 1290.48 lacs

Losses recognized towards the exposure during the current period –

Amount of Assets intended to be securitized within a year –

Of which above, amount of assets originated within a year before securitization –

The securitized exposures in banking book are vehicle loans. The underlying assets are vehicles and further capital charges arecomputed by applying risk weight of 125% on the exposure (due to consumer loans).


a) For each separately disclosed credit risk portfolio the total exposure (after, where applicable, on -or off balance sheet netting) thatis covered by eligible financial collateral after the application of haircuts.

Credit Risk exposure covered by Eligible Financial Collaterals(` in lacs)

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

On Balance Sheet 383388.76 420773.87 0.00

Off Balance Sheet 116635.93 31415.57 85220.36

Total 500024.69 452189.44 85220..36

b) For each separately disclosed portfolio the total exposure (after, where applicable, on- or off-balance sheet netting) that is coveredby guarantees/credit derivatives (whenever specifically permitted by RBI)

NIL

Table DF - 6

Securitization Exposure - Disclosure for Standardized Approach

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Table DF - 7

Market risk in Trading Book

Qualitative disclosures

a) Approach for Computation of Capital charge for Market RiskStandardized Duration Approach is used for calculating Capital charge for Market Risk. Components under Market risk are:(i) Specific Risk – Capital Charge for market risk is computed based on risk weights prescribed by the regulator.

(ii) General Market Risk is calculated forSecurities under HFT categorySecurities under AFS categoryOpen foreign exchange position limitsTrading Positions in Derivatives

The total Capital charge for market risk is equal to greater of Specific Capital charge plus General Market Risk Capital Charge orAlternative total capital charge.

Quantitative Disclosuresa) The capital requirements for:·

Interest rate risk ` 12064.49 lacs

Equity position risk ` 2038.05 lacs

Foreign exchange risk ` 190.79 lacs

Table DF - 8

Operational Risk

The Bank has put in place important policies like Operational Risk Management, Information System Security, Know your Customer(KYC) and Anti Money Laundering (AML), Business Continuity and Disaster Recovery Management. The updated manuals on allimportant functional areas have been circulated to the branches. Risk Based Internal Audit is introduced in all branches in our Bank.

The Operational Risk Management Policy outlines the Organisation structure and covers the process of identification, assessment/ measurement and control of various operational risks. Internal control mechanism is in place to control and minimize the operationalrisks.

Capital charge for operational risk is computed as per the Basic Indicator Approach. The average of the gross income, as defined inthe New Capital Adequacy Framework guidelines, for the previous 3 years i.e., 2014-15, 2013-14, 2012-13 is considered for computingthe capital charge. The required capital is ` 12013.86 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 asa consequence of movement in interest rates. The Bank has significant portion of its assets and liabilities portfolio not marked tomarket and is carried on the books of the Bank at historical values. Thus, the economic value of such assets and liabilities isgenerally not ascertained on a regular basis and can be a significant 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 profile up to 6 months is 'asset sensitive'. The positive mismatches in the near term time buckets (up to 6 months)

will be beneficial 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 economicvalue 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.

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Notional Amount Gross Positive Potential Future Total Creditfair value of contracts Exposure Exposure

Forward Contracts 115908.97 1439.34 2318.18 3757.52

Since the modified duration of the liabilities are less compared to the modified duration of assets, there would be a fall in the equityvalue under major stress. In order to bring down the percentage of fall in market value of equity and earnings at risk under majorstress, 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 modified duration.

The level of IRRBB (Earnings Perspective & Economic Value Perspective) is being measured and monitored on a quarterly basisaiming at managing it within the limit over a period and minimizes the impact of interest rate movement on near term profitability.


The impact is calculated for a parallel shift of 200 bps across all the time buckets. The increase in NII is at ` 2089.80 lakhs and therewould be fall of EVE by ` 16412.48 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 forCounterparty 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 CurrentExposure method.

Credit Exposure as on 31.03.2016 (` in lacs)

Table DF - 11

Composition of Capital(` in lacs)

Basel III common disclosure template to be used during the transition of regulatory adjustments(i.e. from April 1, 2013 to December 31, 2017)

Common Equity Tier 1 capital: instruments and reserves

1 Directly issued qualifying common share capital plus related stock surplus (share premium) 83682.05

2 Retained earnings 82507.09

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 166189.14

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) 9316.08

10 Deferred tax assets

11 Cash-flow 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 Defined-benefit pension fund net assets

16 Investments in own shares (if not already netted off paid-in capital on reported balance sheet)

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17 Reciprocal cross-holdings in common equity 13.86

18 Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatoryconsolidation, net of eligible short positions, where the bank does not own more than 10% of the issued sharecapital (amount above 10% threshold)

19 Significant investments in the common stock of banking, financial and insurance entities that are outside thescope 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 taxliability)

22 Amount exceeding the 15% threshold

23 of which: significant investments in the common stock of financial entities

24 of which: mortgage servicing rights

25 of which: deferred tax assets arising from temporary differences

26 National specific 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-financial subsidiaries

26c of which: Shortfall in the equity capital of majority owned financial entities which have not been consolidatedwith the bank

26d of which: Unamortized pension funds expenditures

Regulatory Adjustments Applied to Common Equity Tier 1 in respect of Amounts Subject to Pre-Basel IIITreatment

of which: [INSERT TYPE OF ADJUSTMENT]

For example: filtering out of unrealized losses on AFS debt

securities (not relevant in Indian context)



27 Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1 and Tier 2 tocover deductions 9.30

28 Total regulatory adjustments to Common equity Tier 1 9339.25

29 Common Equity Tier 1 capital (CET1) 156849.90

Additional Tier 1 Capital : Instruments

30 Directly issued qualifying Additional Tier 1 instruments plus related stock surplus (31+32)

31 of which: classified as equity under applicable accounting standards (Perpetual Non-Cumulative PreferenceShares)

32 of which: classified 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 heldby 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, financial and insurance entities that are outside the scope of regulatoryconsolidation, net of eligible short positions, where the bank does not own more than 10% of the issuedcommon share capital of the entity (amount above 10% threshold)

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40 Significant investments in the capital of banking, financial and insurance entities that are outside the scope ofregulatory consolidation (net of eligible short positions)

41 National specific 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 financial entities which have not been consolidatedwith 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 at50%]


42 Regulatory adjustments applied to Additional Tier 1 due to insufficient 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) 156849.90

Tier 2 Capital : Instruments and provisions

46 Directly issued qualifying Tier 2 instruments plus related stock surplus 26940.00

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 andheld by third parties (amount allowed in group Tier 2)

49 of which: instruments issued by subsidiaries subject to phase out

50 Provisions 10748.58

51 Tier 2 capital before regulatory adjustments 37688.58

Tier 2 Capital : regulatory adjustments

52 Investments in own Tier 2 instruments

53 Reciprocal cross-holdings in Tier 2 instruments 1999.00

54 Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatoryconsolidation, net of eligible short positions, where the bank does not own more than 10% of the issuedcommon share capital of the entity (amount above the 10% threshold)

55 Significant investments13 in the capital banking, financial and insurance entities that are outside the scope ofregulatory consolidation (net of eligible short positions)

56 National specific 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 financial entities which have not been consolidatedwith 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 at50%]

of which: [INSERT TYPE OF ADJUSTMENT

57 Total regulatory adjustments to Tier 2 capital 1999.00

58 Tier 2 capital (T2) 35689.58

58a Tier 2 capital reckoned for capital adequacy 35689.58

58b Excess Additional Tier 1 capital reckoned as Tier 2 capital

58c Total Tier 2 capital admissible for capital adequacy (58a+58b)

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59 Total capital (TC=T1+T2) (45+58C) 192539.48

Risk Weighted Assets in respect of Amounts Subject to Pre-Basel III Treatment


of which: ...

60 Total risk weighted assets (60a+60b+60c) 1804571.80

60a of which: total credit risk weighted assets 1531250.33

60b of which: total market risk weighted assets 148502.09

60c of which: total operational risk weighted assets 124819.38

Capital ratios

61 Common Equity Tier 1 (as a percentage of risk weighted assets) 8.69%

62 Tier 1 (as a percentage of risk weighted assets) 8.69%

63 Total capital (as a percentage of risk weighted assets) 10.67%

64 Institution specific buffer requirement (minimum CET1requirement plus capital conservation andcountercyclical buffer requirements, expressed as a percentage of risk weighted assets) 6.125%

65 of which: capital conservation buffer requirement 0.625%

66 of which: bank specific countercyclical buffer requirement

67 of which: G-SIB buffer requirement

68 Common Equity Tier 1 available to meet buffers (as a percentage of risk weighted Assets) 3.19%

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-significant investments in the capital of other financial entities

73 Significant investments in the common stock of financial 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 toapplication of cap) 10748.58

77 Cap on inclusion of provisions in Tier 2 under standardized approach 19140.63

78 Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach(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)

* excluding capital conservation buffer

LVB ar 2016 Page 1 to 72.p65 07/05/2016, 1:04 PM65


66

Notes to the Template

Row No. ofParticular ` in lakhs

the 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

19 If investments in insurance subsidiaries are not deducted fully from capital and instead consideredunder 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

26b If investments in the equity capital of unconsolidated non-financial subsidiaries are not deducted andhence, risk weighted then:

(i) Increase in Common Equity Tier I Capital

(ii) Increase in risk weighted assets

44a Excess Additional Tier I capital not reckoned for capital adequacy (difference between Additional TierI 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 10748.58

Eligible Revaluation Reserves included in Tier 2 capital 0.00

Total of row 50 10748.58

58a Excess Tier 2 capital not reckoned for capital adequacy (difference between Tier 2 capital as reportedin row 58 and T2 as reported in 58a)

LVB ar 2016 Page 1 to 72.p65 07/05/2016, 1:04 PM66


67

Tab

le D

F -

13

Mai

n F

eatu

res

of

Reg

ula

tory

Cap

ital

In

stru

men

ts

Dis

clo

sure

tem

pla

te f

or

S. N

o.

mai

n f

eatu

res

of

reg

ula

tory

Eq

uit

y S

har

esS

erie

s - V

Ser

ies

- VII

(A)

Ser

ies

- VII

(B)

Ser

ies

- VIII

Ser

ies

- IX

cap

ital

in

stru

men

ts

1Is

suer

LVB

LVB

LVB

LVB

LVB

LVB

2U

niqu

e id

entif

ier

(e.g

. CU

SIP

,IS

IN o

r B

loom

berg

iden

tifie

rfo

r pr

ivat

e pl

acem

ent)

INE

694C

0101

8IN

E69

4C09

060

INE

694C

0803

9IN

E69

4C08

047

INE

694C

0805

4IN

E69

4C08

062

3G

over

ning

law

(s)

of t

heC

ompa

nies

Act

,R

BI

Gui

delin

es,

RB

I G

uide

lines

,R

BI

Gui

delin

es,

RB

I G

uide

lines

,R

BI

Gui

delin

es,

inst

rum

ent

SE

BI

Reg

ulat

ions

,S

EB

I R

egul

atio

ns,

SE

BI

Reg

ulat

ions

,S

EB

I R

egul

atio

ns,

SE

BI

Reg

ulat

ions

,S

EB

I R

egul

atio

ns,

RB

I G

uide

lines

, an

dC

ompa

nies

Act

Com

pani

es A

ctC

ompa

nies

Act

Com

pani

es A

ctC

ompa

nies

Act

othe

r re

late

d ru

les

and

othe

r re

late

dan

d ot

her

rela

ted

and

othe

r re

late

dan

d ot

her

rela

ted

and

othe

r re

late

dre

gula

tions

etc

rule

s re

gula

tions

rule

s re

gula

tions

rule

s re

gula

tions

rule

s re

gula

tions

rule

s re

gula

tions

etc.

etc

etc

etc

etc

Reg

ulat

ory

trea

tmen

t

4Tr

ansi

tiona

l Bas

el I

II ru

les

Com

mon

Equ

ityT

ier

- II

Tie

r -

IIT

ier

- II

Tie

r -

IIT

ier

- II

Tie

r -

I

5P

ost-

tran

sitio

nal B

asel

III

rule

sC

omm

on E

quity

Elig

ible

Elig

ible

Elig

ible

Elig

ible

Elig

ible

Tie

r -

I

6E

ligib

le a

t sol

o / g

roup

/S

olo

Sol

oS

olo

Sol

oS

olo

Sol

ogr

oup

& s

olo

7In

stru

men

t ty

peC

omm

on S

hare

sU

nsec

ured

Uns

ecur

edU

nsec

ured

Uns

ecur

edU

nsec

ured

Red

eem

able

Red

eem

able

Non

Con

vert

ible

Non

Con

vert

ible

Non

Con

vert

ible

Non

Con

vert

ible

Non

Con

vert

ible

Sub

ordi

nate

dR

edee

mab

leR

edee

mab

leS

ubor

dina

ted

Sub

ordi

nate

d(T

ier-

II)

Bon

dsB

asel

III

Bas

el I

II C

ompl

iant

(Tie

r- I

I) B

onds

(Tie

r- I

I) B

onds

in th

e na

ture

of

Com

plia

nt (

Tie

r- I

I) (

Tie

r- II

) B

onds

inin

the

natu

re o

fin

the

natu

re o

fD

eben

ture

sB

onds

in th

eth

e na

ture

of

Deb

entu

res

Deb

entu

res

(Bon

ds)

natu

re o

fD

eben

ture

s (B

onds

)(B

onds

) S

erie

s -

V(B

onds

)S

erie

s -

VII

Deb

entu

res

Ser

ies

- IX

Ser

ies

- V

II(

Bon

ds)

Ser

ies

- V

III

8A

mou

nt r

ecog

nize

d in

1794

60.

0039

9011

3078

10 1

4010

regu

lato

ry c

apita

l (` in

lakh

s)

9P

ar v

alue

of

inst

rum

ent

` 1

0 pe

r sh

are

10.0

010

.00

10.0

010

.00

5.00

(` i

n la

khs

)

10A

ccou

ntin

g cl

assi

ficat

ion

Sha

reho

lder

s E

quity

Liab

ility

Liab

ility

Liab

ility

Liab

ility

Liab

ility

11O

rigin

al d

ate

of is

suan

ceV

ario

us D

ates

30.0

9.20

0610

.02.

2012

10.0

2.20

1224

.03.

2014

30.0

9.20

15

12P

erpe

tual

or

date

dP

erpe

tual

Dat

edD

ated

Dat

edD

ated

Dat

ed

13O

rigin

al m

atur

ity d

ate

No

Mat

urity

30.0

4.20

1610

.02.

2018

10.0

2.20

2224

.03.

2024

30.0

9.20

25

14Is

suer

cal

l sub

ject

to

prio

rN

o–

––

––

supe

rvis

ory

appr

oval

LVB ar 2016 Page 1 to 72.p65 07/05/2016, 1:04 PM67


68

Dis

clo

sure

tem

pla

te f

or

S. N

o.

mai

n f

eatu

res

of

reg

ula

tory

Eq

uit

y S

har

esS

erie

s - V

Ser

ies

- VII

(A)

Ser

ies

- VII

(B)

Ser

ies

- VIII

Ser

ies

- IX

cap

ital

in

stru

men

ts

15O

ptio

nal c

all d

ate,

NA

––

Cal

l opt

ion

Cal

l opt

ion

Cal

l opt

ion

cont

inge

nt c

all d

ates

and

exer

cisa

ble

only

ifex

erci

sabl

e on

ly if

exer

cisa

ble

only

if t

here

dem

ptio

n am

ount

the

inst

rum

ent

the

inst

rum

ent

has

inst

rum

ent

has

run

has

run

for

run

for

10 y

ears

;fo

r 10

yea

rs; f

irst

10 y

ears

; firs

t cal

lfir

st c

all d

ate

isca

ll da

te is

date

is11

.02.

2022

.25

.03.

2024

.30

.09.

2015

.F

urth

er c

all o

ptio

nF

urth

er c

all o

ptio

nF

urth

er c

all o

ptio

nex

erci

sed

only

exer

cise

d on

ly w

ithex

erci

sed

only

with

with

the

prio

rth

e pr

ior

appr

oval

the

prio

r ap

prov

al o

fap

prov

al o

f RB

I.of

RB

I. T

hese

RB

I. T

hese

bon

ds a

reT

hese

bon

ds a

rebo

nds

are

rede

emab

le a

t pa

rre

deem

able

at

par

rede

emab

le a

t pa

r

16S

ubse

quen

t ca

ll da

tes,

––

––

––

if ap

plic

able

Cou

pons

/ d

ivid

ends

––

––

––

17F

ixed

or

float

ing

divi

dend

/–

Fix

edF

ixed

Fix

edF

ixed

Fix

edco

upon

18C

oupo

n ra

te a

nd a

ny–

9.95

%11

.40%

11.4

0%11

.80%

11.5

0%re

late

d in

dex

19E

xist

ence

of

a di

vide

ndN

AN

oN

oN

oN

oN

ost

oppe

r

20F

ully

dis

cret

iona

ry,

part

ially

Ful

ly D

iscr

etio

nary

Man

dato

ryM

anda

tory

Man

dato

ryM

anda

tory

Man

dato

rydi

scre

tiona

ry o

r m

anda

tory

21E

xist

ence

of s

tep

up o

r ot

her

No

No

No

No

No

No

ince

ntiv

e to

red

eem

22N

oncu

mul

ativ

e or

cum

ulat

ive

Non

-cum

ulat

ive

Cum

ulat

ive

Cum

ulat

ive

Cum

ulat

ive

Cum

ulat

ive

Cum

ulat

ive

23C

onve

rtib

le o

r no

n-co

nver

tible

NA

Non

-con

vert

ible

Non

-con

vert

ible

Non

-con

vert

ible

Non

-con

vert

ible

Non

-con

vert

ible

24If

conv

ertib

le,

conv

ersi

onN

AN

AN

AN

AN

AN

Atr

igge

r(s)

25If

conv

ertib

le,

fully

or

part

ially

NA

NA

NA

NA

NA

NA

26If

conv

ertib

le,

conv

ersi

on r

ate

NA

NA

NA

NA

NA

NA

27If

conv

ertib

le,

man

dato

ry o

rN

AN

AN

AN

AN

AN

Aop

tiona

l con

vers

ion

28If

conv

ertib

le,

spec

ifyN

AN

AN

AN

AN

AN

Ain

stru

men

t ty

pe c

onve

rtib

lein

to

LVB ar 2016 Page 1 to 72.p65 07/05/2016, 1:04 PM68


69

Dis

clo

sure

tem

pla

te f

or

S. N

o.

mai

n f

eatu

res

of

reg

ula

tory

Eq

uit

y S

har

esS

erie

s - V

Ser

ies

- VII

(A)

Ser

ies

- VII

(B)

Ser

ies

- VIII

Ser

ies

- IX

cap

ital

in

stru

men

ts

29If

conv

ertib

le,

spec

ify is

suer

NA

NA

NA

NA

NA

NA

of in

stru

men

t it

conv

erts

into

30W

rite-

dow

n fe

atur

eN

oN

oN

oN

oN

oN

o

31If

writ

e-do

wn,

writ

e-do

wn

NA

NA

NA

NA

NA

NA

trig

ger(

s)

32If

writ

e-do

wn,

ful

l or

part

ial

NA

NA

NA

NA

NA

NA

33If

writ

e-do

wn,

per

man

ent

orN

AN

AN

AN

AN

AN

Ate

mpo

rary

34If

tem

pora

ry w

rite-

dow

n,N

AN

AN

AN

AN

AN

Ade

scrip

tion

of w

rite-

upm

echa

nism

35P

ositi

on in

sub

ordi

natio

nN

AA

ll D

epos

itors

All

Dep

osito

rsA

ll D

epos

itors

All

Dep

osito

rsA

ll D

epos

itors

hier

arch

y in

liqu

idat

ion

and

othe

r C

redi

tor

and

othe

r C

redi

tor

and

othe

r C

redi

tor

and

othe

r C

redi

tor

and

othe

r C

redi

tor

(spe

cify

inst

rum

ent

type

of th

e B

ank

of th

e B

ank

of th

e B

ank

of th

e B

ank

of th

e B

ank

imm

edia

tely

sen

ior

toin

stru

men

t)

36N

on-c

ompl

iant

tra

nsiti

oned

––

––

––

feat

ures

37If

yes,

spe

cify

non

-com

plia

nt–

––

––

–fe

atur

es

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70

Table DF - 14

Full Terms and Conditions of Regulatory Capital Instruments

Instruments Series - V Series -VII (A) Series - VII (B) Series - VIII Series - IX

Date of Allotment 30.09.2006 10.02.2012 10.02.2012 24.03.2014 30.09.2015

Date of Redemption 30.04.2016 10.02.2018 10.02.2022 24.03.2024 30.09.2025

Rate of Interest 9.95% 11.40% 11.40% 11.80% 11.50%

Amount 3000.00 19950.00 5050.00 7810.00 14010.00Lacs Lacs Lacs Lacs Lacs

Nature of Instrument Bonds in nature of Bonds in nature of Bonds in nature of Bonds in nature of Bonds in nature ofDebentures / Debentures/ Debentures/ Debentures / Debentures /

(Bonds) (Bonds) (Bonds) (Bonds) (Bonds)

Amount Subscribed 3000.00 19950.00 5050.00 7810.00 14010.00Lacs Lacs Lacs Lacs Lacs

Face Value of the Bond 10.00 lacs 10.00 lacs 10.00 lacs 10.00 lacs 5.00lacs

Issuance, Trading andListing N S E N S E N S E N S E N S E

Details of Tier II Capital (Banks - Regulatory Capital instruments)

raised by the Bank and the position as on 31.03.2016

Leverage Ratio (Solo) (` in lacs)

Tier I Capital 156849.90

Total Exposure 3003589.44

Leverage ratio 5.22

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71

CASH FLOW FROM OPERATING ACTIVITIES:Net Profit as per Profit & Loss Account 180,23,58 132,28,59

ADJUSTMENTS FOR:

Provisions & Contingencies 226,88,83 236,12,22

Depreciation 37,76,28 15,54,48

Loss on sale of assets 7,92 32,33

Income Tax / T D S paid -57,00,00 -41,10,00

Net cash flow before changes in Working Capital 387,96,61 343,17,62

CHANGES IN WORKING CAPITAL :LIABILITIES : Increase/Decrease in

Deposits 3466,74,93 3391,33,01

Refinances 224,80,78 0

Other Liabilities -170,69,28 -108,22,89

3520,86,43 3283,10,12

ASSETS : Increase/Decrease in

Investments 494,24,86 420,78,85

Advances 3291,71,98 3462,82,94

Other Assets 12,29,14 77,72,24

-3798,25,98 -3961,34,03

Net Cash Flow from operating activities 110,57,06 -335,06,29

CASH FLOW FROM INVESTING ACTIVITIES :Purchase of Fixed Assets -67,80,86 -59,47,91

Sale of Fixed Assets 32,45 70,62

Net Cash Flow from Investing activities -67,48,41 -58,77,29

CASH FLOW FROM FINANCING ACTIVITIES:Share issue including share premium net of forfeited shares 2,34,66 410,52,90

Proceeds received from Tier II Bonds 140,10,00 0

Repayment of Tier II Bonds -100,00,00 0

Dividends paid -35,64,28 -9,65,92

Net Cash Flow from financing activities 6,80,38 400,86,98

Cash flow for the year 49,89,03 7,03,41

Cash & Cash equivalents at the beginning of the year 1318,72,10 1311,68,69

Cash & Cash equivalents at the year end 1368,61,13 1318,72,10

CASH FLOW STATEMENT for the year ended 31st March 2016

(` in 000’s)

31.03.2016 31.03.2015





D.L.N. RAO

S.G. PRABHAKHARAN

S. DATTATHREYANDr. P.A. SHANKAR

N. MALAYALARAMAMIRTHAM

PANKAJ VAISH

PRAKASH P. MALLYAK. BABUJI

SUVENDU PATI

Directors





LVB ar 2016 Page 1 to 72.p65 07/05/2016, 1:04 PM71


72

To,

The Members

The Lakshmi Vilas Bank LimitedKarur

We have examined the compliance of conditions of Corporate Governance by M/s. The Lakshmi Vilas Bank Limited for the year

ended 31st March, 2016 as stipulated under Schedule V (E) of SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015.

The compliance of the conditions of Corporate Governance is the responsibility of the management. Our 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 financial statements of the Bank.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Bank has compiledwith the conditions of Corporate Governance as stipulated in the above-mentioned SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015.

As required by the Guidance Notes issued by the Institute of Chartered Accountants of India, we have to state that no investorgrievance is pending for a period exceeding one month against the Bank and as per the records maintained by the Stakeholders

Relationship Committee.

We further state that such compliance is neither an assurance as to the future viability of the Bank nor the efficiency or effectivenesswith which the management has conducted the affairs of the Bank.

Auditor’s Certificate on Corporate Governance

Auditor’s Certificate on ESOS

This is to certify that M/s. The Lakshmi Vilas Bank Limited, Karur 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 andExchange Board of India Regulations.

For R.K. KUMAR & CO.,Chartered Accountants

FRN: 001595S

(B.R. ASHOK)

Place : Chennai Partner

Date : 27th April, 2016 Membership No. 023313

For R.K. KUMAR & CO.,Chartered AccountantsFRN: 001595S

(B.R. ASHOK)PartnerMembership No. : 023313

Place : ChennaiDate : 27th April, 2016

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73


Annexure - A

MANAGEMENT DISCUSSIONS AND ANALYSISIndustry Developments:

Domestic activity slowed in the second half of 2015-16. Aggregate demand was restrained by stalling fixed investment, weak ruralconsumption and the ongoing fiscal consolidation. Aggregate supply moderated with the impact of deficient monsoons on agriculture.Gross value added (GVA) in industry benefited from the decline in input costs while services remained in expansion mode.

Domestic economic activity lost pace in the second half of 2015-16, slowed down by muted investment and a prolonged contractionin exports. While private consumption has been the mainstay in holding up aggregate demand, it has largely been an urbanphenomenon; coincident indicators of rural consumption have generally remained weak or in negative territory. On the supply sidethough, some silver linings are discernible. Despite consecutive deficient monsoons and unseasonal weather more recently, foodgrains production is on course to post a modest improvement over the levels recorded a year ago. For industry, the deceleration inthe volume of production has been more than offset by the decline in input costs. While service sector activity has been affected bythe subdued performance of tradables, non-tradables have been expanding at a reasonable pace.

The stock of stranded investment in stalled projects fell, reflecting concerted efforts by the Government towards fast-tracking therevival of projects in electricity generation and chemicals sectors. New investment remained subdued in both private and publicsectors in response to the prevailing uncertainty in the business environment and muted business confidence. The production ofcapital goods fell sharply, co-moving with a deceleration in imports, barring in February. A durable recovery in the capex cyclecontinues to remain elusive in the face of considerable slack. Profitability of the non-government non-financial companies has alsomoderated in Q3, with implications for corporate saving and investment. These coincident indicators suggest that national accountsdata for Q4 of 2015-16, especially Private Final Consumption Expenditure (PFCE), may be subject to downward revisions from theimplicit levels in the advance estimates for the full year. PFCE expanded in H2, in part benefiting from real income gains from loweraverage inflation than a year ago. The production of consumer durables rose robustly up to January 2016, also reflecting improvementin credit conditions for consumers as banks rebalanced their lending portfolios in favour of personal loans in which stress is relativelylow. Sales of commercial and passenger vehicles, production of gems and jewellery and mixers and grinders accelerated, indicativeof the resilience of urban consumption. Purchasing managers' surveys point to some improvement in employment in manufacturingindustries.

By contrast, rural consumption remained weak in H2; with moderation in wage growth, rural incomes have been depressedby shocks to farm activity from back-to-back deficient monsoons. In Q4, however, there was a pick-up in sales of tractors andtwo-wheelers which could be indicative of a turning point in the rural economy. The focus of the Union Budget 2016-17 on reviving therural economy and doubling rural incomes could support rural consumption demand more enduringly going forward. Overall,the prospects for PFCE have been brightened by the proposal to implement the 7th Pay Commission award and one-rank-one-pension for retired defence personnel.

The growth of government final consumption picked up in H2 relative to H1. The Centre's revenue expenditure rose on higherspending on major subsidies, especially petroleum subsidies, and higher interest payments. Plan revenue expenditure related tosocial and physical infrastructure made a turnaround in H2 from an absolute decline in H1. Capital expenditure of the Centredecelerated in H2 in relation to H1, reflecting lower growth in capital outlay. States, accounting for nearly two-third of general governmentcapital expenditure, received significantly higher resources on account of their enhanced share in taxes as recommended by theFourteenth Finance Commission. The expenditure multiplier of States tends to be higher than that of the Centre, which could worktowards reviving overall investment in the economy.

Opportunities and Threats:

The baseline projections of growth and inflation are subject to several risks. Plausible alternate scenarios in which some of the risks,both downside and upside, materialize.

(i) Implementation of the Seventh Pay Commission Award:

The implementation of the CPC's recommendations could impact inflation and growth through: a) the direct impact of the proposedincrease in the house rent allowance (HRA); b) indirect effects operating through consumption to aggregate demand; and c) inflationexpectations channel. With propagation to states, there is likely to be an amplification of the total impact on the housing inflationcomponent and hence on overall CPI. The impact is expected to persist up to 24 months. Assuming that the Government implementsthe Commission's recommendations by the second quarter of 2016-17, CPI inflation could be, on average, 100-150 bps higher thanthe baseline in 2016-17 and 2017-18. Of course, the Government's decision on implementation of the 7th CPC is still awaited.

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(ii) Weaker Global Growth:

Recent developments point towards a weakening of global economic activity. If it materializes, unsettled financial markets couldgenerate spillovers to the broader global economy. A widening of the slack in the global economy by 1 percentage point over thebaseline will result in growth in India turning out to be 20-40 bps below the baseline. Inflation would also be lower by 10-20 bps aslower demand would result in a fall in global commodity prices.

(iii) Exchange Rate:

While the macroeconomic fundamentals of Indian economy remain strong, volatility in the foreign exchange market on account ofexternal developments can impact both growth and inflation trajectories. A 5 percent depreciation relative to the baseline assumptioncould lead to inflation turning up by 10-15 bps above the baseline forecast for 2016-17 and real GVA growth by around 5-10 bpsabove the baseline.

(iv) Deficient Monsoon:

El Nino conditions continue to pose a risk to the south-west monsoon. About 90 percent of all El Nino years have led to below normalrainfall and 65 per cent of El Nino years have brought droughts. Assuming a deficiency of 20 per cent in the monsoon, loweragriculture output could lower the overall GVA growth by around 40 bps in 2016-17. Food prices could consequently increase,leading to inflation rising above the baseline by 80-100 bps in 2016-17, even assuming effective government policies relating to foodstocks, procurement and minimum support prices (MSPs).

(v) Rise in Crude Oil Prices:

There is considerable amount of uncertainty on oil prices in view of political forces impacting oil market dynamics. Supply disruptionsfrom geo-political developments could lead to spikes in oil prices, while weaker global demand could push prices further down. If oilprices rise to around US$ 50 per barrel, and assuming full pass-through to domestic fuel prices, inflation could be higher by 40-60bps and growth could be weaker by 20-30 bps. On the other hand, a reduction in crude oil prices to around US$ 20 per barrel couldreduce inflation by 80-120 bps, while boosting real GVA growth by 40-60 bps.

Sustained disinflation is beginning to have a moderating impact on inflationary expectations. Along with the favourable baselineoutlook on crude oil and other commodity prices, and a still negative output gap, inflation is expected to remain inertial but quiescentover 2016-17 and 2017-18. Deviations of the south-west monsoon from normal, upside shocks to oil prices and weak growth in anumber of advanced and emerging economies would pose downside risks to the baseline projections of growth and inflation set outin this MPR.

Various segments of the domestic financial market spectrum have been impacted by bouts of turmoil in global financial markets andheightened volatility. In view of the disruptions in normal functioning of these markets and the implications for monetary policytransmission, identifying, measuring and managing spillovers has become a major challenge for domestic macroeconomic policies.In India, both domestic factors and global spillovers have conditioned movements in financial markets, though increasingly domesticfactors appear to have played a more prominent role. Money, bond and credit markets are largely insulated in terms of persistenceof the impact on average price levels, unlike the foreign exchange and stock markets. However, global spillovers tend to influencevolatility in all segments. Among domestic factors, liquidity conditions, market microstructure, inflation and fiscal outlook, and marketconcerns relating to asset quality of banks and corporate balance sheets have a prominent influence on market activity.Proactive liquidity management is critical to transmission, but by itself cannot prevent disruptions arising from overwhelming globaldevelopments.

Outlook of the bank:

The Indian economy is on the brink of a major transformation, with several policy initiatives set to be implemented shortly. Positivebusiness sentiments, improved consumer confidence and more controlled inflation are likely to prop-up the country's the economicgrowth. Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to providefurther impetus to growth. All these factors suggest that India's banking sector is also poised for robust growth as the rapidly growingbusiness would turn to banks for their credit needs.

Also, the advancements in technology have brought the mobile and internet banking services to the fore. The banking sector is layinggreater emphasis on providing improved services to their clients and also upgrading their technology infrastructure, in order toenhance the customer's overall experience as well as give banks a competitive edge.

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Envisaging profitable growth is the prime vision of any organization and our bank is no exception. Study on profitability from all variedangles ultimately reaches to a common consensus that reduction in cost of deposits and operating expenses is the need of the hour.We expect that RBI has room to cut its policy repo rate over fiscal 2017, given projections of inflation. Coupled with gradual economicand investment recovery and funding needs for auction proceeds, bank credit growth is likely to be in the 20% range in fiscal 2017;we expect similar growth in deposit also.

Banking industry, in its attempt to guard against high cost funds, have been focusing on CASA (Current Account & Saving Account)to save profit margins. High proportion of low-cost deposits builds a bank's ability to reduce its cost of funds. For the fiscal 2016-17,the bank envisages a higher CASA composition to total deposits.

Risk & Concern:

The bank has adopted suitable risk management practices for managing liquidity risk, market risk, credit risk and operational risktaking into consideration, the volume and nature of business activities, Regulatory Compliances and overseeing of Risk continues tobe an underlying factor in all growth initiatives.

The Integrated Risk Management Committee of Board ensures that risk is appropriately managed in the Bank. The policies put in bythe Bank help to meet the dynamic challenges in the external and internal environments in which the bank operates and also tocomply with the regulatory requirements. The present capital adequacy ratio placed the bank in a satisfactory level as per BASEL IIInorms.

The Bank is maintaining CRAR at 10.67% (Basel III), well above the minimum level of 9.625% with Tier I at 8.69% (minimum of7.625% as per Basel III guidelines) and Tier II at 1.98%. During the financial year 2015-16, the Bank has raised funds through TierII Bonds for the purpose of fulfilling Basel III norms. Further, the Bank is in the process of examining the need and timing of raisingfurther capital (Tier I and / or Tier II) to meet Basel III requirements within the Policy framework with approval of shareholders andregulators.

Internal Control Systems:

The Bank has put in place well-articulated internal control measures in tune with the complexity of business operations, organization'ssize and supervisory compliance standards. Dual control on transactions and assets, control returns review by controlling offices,periodic visit and review of branches by executives of controlling offices are a few major control mechanisms in place.

There is continuous review of the efficacy of the systems and the following audit & Inspections are carried out:

• Risk based Internal Audit to measure the risk in branches and work out the mitigating techniques along with transactions basedinternal audit.

• Pre-disbursement Credit Audit, Credit Audit (Post Disbursement) and Legal Audit.

• Revenue Audit / Income leakage audit and various snap audits to review specific areas of operation including compliance toinspection observation.

• Concurrent audit by Empaneled Chartered Accountant Firms.

• Information System Audit by Information System Auditors and trained inspectors/External Auditors.

• Statutory Audit of Branches and controlling offices by Chartered Accountant Firms in terms of guidelines of the Reserve Bank ofIndia.

• Management Audit of Controlling offices/ Departments at Corporate Office (C.O) by trained Internal Inspectors of Branches.

Software application has been implemented to enhance the efficiency and effectiveness of risk based internal audit and to haverobust MIS on the risks and controls. Compliance function is strengthened through an independent compliance department andimplementation of application software for monitoring statutory, regulatory and internal compliance. An executive level committeeconsisting of top executives reviews every inspection report and minutes of the committee meetings are reviewed byAudit Committee of the Board. The Audit Committee of the Board (ACB) oversees the entire audit function of the Bank and thecompliance thereof.

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Discussions on Financial Parameters with respect to Performance:

Business Segmentation:

Deposit $ in Crores % Advances $ in Crores %

Demand Deposit 1636.46 6.43% Bills purchased & discounted 1758.20 8.95%

Savings Deposit 2779.06 10.93% Cash Credits, overdrafts & 10678.34 54.36%loans repayable on demand

Term Deposit 21015.44 82.64% Term Loan 7207.20 36.69%

Total 25430.96 Total 19643.74

• Net Profit for the year increased by 36.25% from $ 132.29 crores for the FY 15 to $ 180.24 crores for the FY16.

• Operating Profit for the year up by 10.51% Y-o-Y

• Total income for FY 2016 was at $ 2872.83 crores with a growth of 14.98% over the previous year income of $ 2498.57 crores.

• Interest income improved by 15.97% over the last fiscal

• Cost of Deposit of the Bank has come down from 8.58% to 8.17% Y-o-Y

• Yield on advances stood at 12.21% as of 31st March 2016

• Gross NPA declined from 2.75% to 1.97% and Net NPA from 1.85% to 1.18%

• Total Deposits rose from $ 21964.21 crores in FY 2015 to $ 25430.96 crores, registering Y-o-Y growth of 15.78%.

• CASA grown from $ 3661.84 crores to $ 4415.51 crores registering the Y-o-Y growth of 20.58%

• Gross Advances increased from $ 16512.84 crores to $ 19818.93 crores registering Y-o-Y growth of 20.02%

• Total Business of the Bank reached $ 45250 crores showing an increase of 18% on y-o-Y basis.

• The Capital Adequacy Ratio stood at 10.67% under Basel III (10.98% under Basel -II) as at 31st March 2016.

Staff / Industrial Relations

The Bank's staff strength has grown to 3565 at the end of the financial year 2015-16. Specialist Officers in Credit, Law, Marketing &other specialized verticals were recruited during the year. Manpower requirements were continuously assessed and 262 staff memberswere promoted to higher scale / cadre. The Bank maintains cordial relationship with the Employees' Union and Officers' Associationwhich 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 challengesand newer forms of risk that are technology driven. Credit skills enhancement, NPA management, Risk Management, KYC complianceand Enhanced Customer Service are being emphasized by nominating the staff members to reputed external training institutions.

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Annexure - B

BOARD OF DIRECTORS AND COMMITTEESThe 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 Bombay Stock Exchange Limited, Mumbai andSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 to the extent applicable.The Board has 12 Directors as on 31.03.2016 including Managing Director, who is an Executive Director, six Independent Directors andtwo nominee Directors appointed by Reserve Bank of India and 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,Consultancy, Engineering, Finance, Information Technology, Agriculture, Small Scale Industry and Business. Details of the Directors,number of meetings held during the year and attendance during the year are provided in Annexure C.

During the year under review, twelve (12) Board Meetings were held. The Meeting numbers and dates are given below:

1790 - 29.04.2015, 1791 - 08.06.2015, 1792 - 23.07.2015, 1793 - 02.09.2015, 1794 - 03.09.2015, 1795 - 15.10.2015, 1796 - 07.11.2015,1797 - 16.12.2015, 1798 - 06.01.2016, 1799 - 22.01.2016, 1800 - 23.02.2016 & 1801 - 24.03.2016.

Committees of Directors:

The Board has constituted various Committees of Board to deal with matters, which need special and continued focus and timelymonitoring of the activities falling within the terms of reference of the Committees and in compliance with the various regulatoryrequirements. The details pertaining to the Composition of the Committee, its Chairman and Members and the details of the Meetingsheld and attendance during the year under review, are provided in Annexure C. The details of such specialized Board Committees as on31.03.2016 are as under:

Audit Committee:

Audit Committee of the Board, is chaired by Shri.D.L.N.Rao, an Independent Director. Audit Committee provides direction and overseesthe operation of total audit function in the Bank as per RBI guidelines. The terms of reference of Audit Committee are in accordance withRBI guidelines, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act 2013 and includethe following:

• Overseeing the Bank's financial reporting process and the disclosure of its financial information to ensure correct, adequate andcredible disclosure of financial information.

• Recommending appointment, terms of appointment including remuneration and reviewing the performance of statutory and internalauditors.

• Reviewing with management the annual financial statements before submission to the Board with special emphasis on accountingpolicies and practices, compliance with accounting standards and other legal requirements concerning financial statements.

• Reviewing the adequacy of the Audit and Compliance function, including their policies, procedures, techniques and other regulatoryrequirements.

During the year, eight (8) meetings were held. The Meeting numbers and dates are given below:

140 - 29.04.2015, 141 - 09.06.2015, 142 - 22.07.2015, 143 - 03.09.2015, 144 - 15.10.2015, 145 - 16.12.2015, 146 - 22.01.2016 & 147- 08.03.2016.

Nomination and Remuneration Committee:

The Committee is constituted as per the legal and regulatory requirements under the Banking Regulation Act, SEBI (Listing Obligationsand Disclosure Requirements) Regulations, 2015 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 ofdirectors 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 theReserve Bank of India circular No.BC 75/29.67.001/2011-12 dated January 13, 2012 being the guidelines issued on the compensationof Whole Time Directors / Chief Executive Officers / Risk takers and Control function staff, etc.

3. Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to theBoard 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;

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6. Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with thecriteria laid down, and recommend to the Board their appointment and removal.

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, five (5) meetings were held. The Meeting numbers and dates are:

3 - 08.06.2015, 4 - 22.07.2015, 5 - 15.10.2015, 6 - 06.01.2016 & 7 - 24.03.2016.

Stakeholders Relationship Committee:

The Stakeholders Relationship Committee specifically looks into the redressal of grievances of shareholders and other security holdersincluding complaints related to transfer of shares, non-receipt of annual report and non-receipt of declared dividends. Details of nameof the Chairman & members of the Committee, Compliance Officer, meetings and attendance during the year are provided in anotherpart of this Annual Report. The terms of reference of Stakeholders relationship Committee are in accordance with SEBI (Listing Obligationand Disclosure Requirements) Regulations, 2015.

During the year, three (3) meetings were held. The Meeting numbers and dates are:

83 - 02.09.2015, 84 - 16.12.2015 & 85 - 23.03.2016.

Integrated Risk Management Committee:

The Integrated Risk Management Committee, constituted as per RBI guidelines, formulates Bank's credit and Market risk policies andreviews the Assets and Liabilities of the Bank based on periodical structural liquidity and dynamic liquidity statements on outflows andinflows and also analyses the interest rate sensitivity of assets and liabilities.

During the year, four (4) meetings were held. The Meeting numbers and dates are:

49 - 29.06.2015, 50 - 15.10.2015, 51 - 21.01.2016 & 52 - 23.02.2016.

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 dedicatedto the monitoring and following up of cases of fraud involving amounts of $ 1 crore and more. The objective of this Committee is theeffective detection of frauds and ensuring prompt reporting thereof to regulatory and enforcement agencies. This Committee alsofunctions as the Review Committee on Non-cooperative borrowers.

During the year, two (2) meetings were held. The Meeting numbers and dates are:

27 - 02.09.2015 & 28 - 24.03.2016.

Customer Service Committee:

Pursuant to the Directions of the Reserve Bank of India, the Bank has constituted a Customer Service Committee exclusively dedicatedto bring about improvement in the quality of customer service provided by the bank.


25 - 02.09.2015 & 26 - 23.03.2016.

Management Committee:

Pursuant to the Directions of the Reserve Bank of India, the Bank has constituted a Management Committee of the Board which isvested with full powers for sanction / ratification of all kinds of loans and advances normally falling within the purview of the lendingpolicies framed by the Board from time to time and full powers for approving compromise proposals in respect of loans and advancesnormally falling within the purview of the compromise policy framed by the bank from time to time and approval of capital and revenueexpenditure, filing suits / appeals, investments, donations and any other matter referred to / delegated to the Committee by the Board.

During the year, nineteen (19) meetings were held. The Meeting numbers and dates are:

146 - 13.04.2015, 147 - 30.04.2015, 148 - 27.05.2015, 149 - 16.06.2015, 150 - 29.06.2015, 151 - 22.07.2015, 152 - 17.08.2015,153 - 02.09.2015, 154 - 19.09.2015, 155 - 28.09.2015, 156 - 14.10.2015, 157 - 06.11.2015, 158 - 17.12.2015, 159 - 07.01.2016,160 - 21.01.2016, 161 - 11.02.2016, 162 - 24.02.2016, 163 - 08.03.2016 & 164 - 23.03.2016.

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 rolesand responsibilities of this Committee includes oversight of the IT strategy and policy documents, measuring the contribution of IT to

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business and ensuring that the IT organizational structure complements the business model. The Committee also exercises the powersto approve all the proposals and their resultant expenditure pertaining to Information Technology and Alternate Channels & ATMs.

During the year, ten (10) meetings were held. The Meeting numbers and dates are:

11 - 25.04.2015, 12 - 11.06.2015, 13 - 03.07.2015, 14 - 02.09.2015, 15 - 19.09.2015, 16 - 14.10.2015, 17 - 20.11.2015,18 - 07.01.2016, 19 - 24.02.2016 & 20 - 23.03.2016.

Compensation Committee:

Constituted as per Regulations of Securities and Exchange Board of India, the Compensation Committee deals with the framing ofdetailed terms and conditions of the ESOS besides the administration and superintendence of the ESOS scheme and to ensure thatthere is no violation of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; and Securities andExchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995, byany employee.


2 - 16.04.2015 & 3 - 11.02.2016.

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, ten (10) meetings were held. The Meeting numbers and dates are:

16 - 16.04.2015, 17 - 11.06.2015, 18 - 23.07.2015, 19 - 17.08.2015, 20 - 27.08.2015, 21 - 14.10.2015, 22 - 06.11.2015,23 - 06.01.2016, 24 - 11.02.2016 & 25 - 08.03.2016.

Infrastructure Development Committee:

The committee deals with premises approval, interiors furnishing, and infrastructure improvement.


78 - 09.06.2015, 79 - 23.07.2015, 80 - 06.11.2015 & 81 - 11.02.2016.

CSR Committee:

Formulated as per Section 135 and Schedule VII of the Companies Act 2013 read with Companies (Corporate Social ResponsibilityPolicy) Rules 2014, the Committee exercises such powers as laid down under the applicable provisions of the Act and the Rules thereto.


3 - 21.04.2015, 4 - 29.06.2015, 5 - 15.10.2015 & 6 - 24.03.2016.

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 Boardmay authorize from time to time.

During the year, five (5) meetings were held. The Meeting dates are:

29.04.2015, 08.06.2015, 15.10.2015, 17.12.2015 & 11.02.2016.

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 ofthe Bank was held on 23.02.2016.

Details of Sitting Fees Paid to Directors:

All the Non-Executive Directors were paid remuneration only by way sitting fees for each Board / Committee Meetings. No stock optionswere granted to any of the non-executive directors. The Non-Executive Directors were paid $ 20,000/- as sitting fees from1st April, 2015 to 14th October, 2015. The sitting fees was then revised with effect from 15th October 2015 to $ 35,000/- which is withinthe limits prescribed under the Companies Act, 2013.

Additional Information pertaining to Directors' Retiring by Rotation:

At the 89th AGM, Shri.N.Malayalaramamirtham, Director is retiring by rotation and being eligible, offers himself for reappointment.The additional information to be provided to the Shareholders pursuant to the SEBI (Listing Obligations and Disclosure Requirement)Regulations, 2015 about the retiring director seeking re-election is furnished in the Notice.

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dent

/DI

N 02

4461

80Pr

ovide

nt Fu

nd &

Exec

utive

(No.

of Sh

ares

: Nil)

Pens

ion(F

rom

25.01

.2016

)

Mr.R

akes

h Sh

arma

Major

ity -

Non

5N

AN

A8

12

11

14

5N

A2

NA

2N

AY

ES

NA

NA

NA

Mana

ging

Dire

ctor

Bank

ingInd

epen

dent

/DI

N 06

8465

94Ex

ecut

ive(T

ill 09

.09.20

15 )

Mr.D

.L.N

.Rao

ACB

& NR

CMa

jority

-Ind

epen

dent

/1

18

NA

NA

NA

4N

A2

2N

A8

5N

A1

NA

5Y

ES

Nil

Nil

Nil

DIN

0230

5079

Law

Non-

exec

utive

(No

of sh

are:

9187

)

Mr.K

.R.P

rade

epHR

C &

COD

forMi

norit

y -

Non

12

NA

21

63

1N

AN

A1

10

10

5N

AN

A5

5Y

ES

15

M/s.P

rana

va E

lectro

nics

(P) L

td.,

Nil

DIN

0015

3097

Capit

al Ra

ising

Cons

ultan

cyInd

epen

dent

/M/

s.Kar

e El

ectro

nics

and

Deve

lopme

nt (P

) Ltd.

,(N

o of

Shar

es :

4215

285)

Non-

exec

utive

M/s.C

elesti

al Te

chso

ft an

d Se

rvice

s (P

) Ltd.

,M/

s.Kar

e Po

wer R

esou

ces

(P) L

td.,

M/s.V

ision

EL-

Tech

and

Ser

vices

(P) L

td.,

M/s.G

reen

Bany

an P

ower

(P) L

td.,

M/s.B

rinda

van

Hydr

opow

er (P

) Ltd.

,M/

s.Pra

nava

Inter

natio

nal P

te Ltd

.,M/

s.Mile

stone

City

Com

plex

[P] L

td.,

M/s.P

rana

va D

MCC

M/s.M

ahad

eshw

ara

Powe

r [P]

Ltd.

,M/

s. MP

RIME

Pre

mise

s [P

] Ltd.

,M/

s. ILM

S Pr

ojects

[P] L

td.,

M/s.

ILMS

Build

ers

[P] L

td.,

M/s.

Miles

tone

Plot

Deve

loper

s [P

] Ltd.

,

Mr.S

.G.P

rabh

akha

ran

CS

RMi

norit

y -

Non

93

NA

64

NA

NA

NA

NA

NA

NA

NA

4N

A5

3N

O3

M/s.R

oyals

oft S

ervic

es L

td.M/

s.Roy

alsof

tDI

N 00

0051

40Bu

sines

sInd

epen

dent

/M/

s.XS

Real

Prop

ertie

s [P

] Ltd.

Serv

ices

Ltd.

(No.

of Sh

ares

: 40

04)

Non-

exec

utive

M/s.A

riston

Cap

ital A

sset

Holdi

ngs

Priva

te Ltd

.

Mr.S

.Dat

tath

reya

nS

RC

Major

ity -

Indep

ende

nt /

12

83

NA

3N

A2

2N

AN

AN

A5

NA

1N

AN

AY

ES

1M/

s.Vaib

hav

Polic

ot (P

) Ltd.

Nil

DIN

0072

4456

Small

Bus

iness

Non-

exec

utive

(No.o

f Sha

res:

1259

98)

Ente

rpris

es

Mr.P.

A.Sh

anka

rC

SC

&Ma

jority

-Ind

epen

dent

/1

0N

AN

A1

0N

A4

12

2N

AN

A4

NA

1N

AN

AY

ES

Nil

Nil

Nil

DIN

0665

8477

CC

BAg

ricula

ture

Non-

exec

utive

(No.

of Sh

ares

: 218

)an

d Ru

ral

Econ

omy/

Mr.N

.Mala

yalar

amam

irtha

mID

CMi

norit

y -

Non

12

NA

31

8N

A4

NA

2N

AN

AN

AN

A2

NA

NA

NA

YE

SN

ilN

ilN

ilDI

N 06

8465

87Bu

sines

sInd

epen

dent

/(N

o. of

Shar

es: 8

1628

)No

n-ex

ecut

ive

Mr.P

anka

j Vais

hIT

STR

ATEG

YMa

jority

-Ind

epen

dent

/1

2N

AN

AN

AN

AN

A2

NA

NA

10

10

NA

NA

15

NA

YE

SN

ilN

ilN

ilDI

N 00

3674

24In

forma

tion

Non-

exec

utive

(No.

of Sh

ares

:100)

Tech

nolog

y

Mr.P

raka

sh M

allya

Small

Sca

leInd

epen

dent

/1

17

NA

18

4N

AN

AN

A2

10

10

NA

NA

1N

A5

YE

S1

M/s.S

tock

Holdi

ng C

orpo

ratio

n of

India

LtdM/

s.Sto

ckDI

N 02

4124

04In

dustr

yNo

n-ex

ecut

iveHo

lding

(No.

of Sh

ares

:100)

(Spe

cial

Corp

orati

on o

fKn

owled

ge)

India

Ltdan

d Ba

nking

(Pra

ctica

lEx

perie

nce)

Ms.E

V.Su

mith

asri

Major

ity -

Indep

ende

nt /

11

NA

2N

AN

A2

NA

NA

NA

8N

AN

A1

1N

AN

AY

ES

Nil

Nil

Nil

DIN

0708

7197

Infor

matio

nNo

n-ex

ecut

ive(N

o. of

Shar

es: 1

00)

Tec

hnolo

gy

Mr.K

.Bab

ujiRB

I Nom

inee

Non

11

7N

A1

1N

AN

AN

AN

AN

AN

AN

AN

AN

AN

AN

AN

AN

ON

ilN

ilN

ilDI

N 07

1911

23Ind

epen

dent

/(N

o.of S

hare

s: Ni

l )No

n-ex

ecut

ive(F

rom

14.05

.2015

)

Mr.S

uven

du P

atiRB

I Nom

inee

Non

11

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

Nil

Nil

Nil

DIN

0745

2701

Indep

ende

nt /

(No.o

f Sha

res:

Nil )

Non-

exec

utive

(Fro

m 12

.02.20

16)

Mr.V

ivek

Deep

RBI N

omine

eNo

n8

5N

A1

0N

AN

AN

AN

AN

AN

AN

AN

AN

AN

AN

AN

AN

ON

ilN

AN

ADI

N 07

0532

96Ind

epen

dent

/(N

o.of S

hare

s: Ni

l )No

n-ex

ecut

ive(T

ill 12

.02.20

16)

Mr.R

.Rav

ikuma

rRB

I Nom

inee

Non

11

NA

2N

AN

AN

AN

AN

AN

AN

AN

AN

AN

AN

AN

AN

AN

ilN

AN

ADI

N 06

4642

42Ind

epen

dent

/(N

o.of S

hare

s: Ni

l )No

n-ex

ecut

ive(T

ill 14

.05.20

15 )"

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81


ATTENDANCE AT AUDIT COMMITTEE MEETINGS FOR THE FY 2015-2016

Name of the Committee Members Category of Director Meeting details Whether attended(Sarvashree) last AGM (Y/N)

Held during the tenure Attended % of totalof director / invitee

D.L.N.Rao Chairman - NED/Independent 8 8 100% YESS.G.Prabhakharan NED/Non Independent 4 3 75% YESS.Dattathreyan NED/Independent 8 8 100% YESPrakash P Mallya NED/Independent 8 7 88% YESK.Babuji - RBI Nominee NED/Non Independent 7 7 100% NOSuvendu Pati - RBI Nominee NED/Non Independent 1 1 100% NAR.Ravikumar - RBI Nominee (Till 14.05.2015) NED/Non Independent 1 1 100% NAVivek Deep - RBI Nominee (Till 12.02.2016) NED/Non Independent 7 5 71% NO

ATTENDANCE AT NOMINATION & REMUNERATION COMMITTEE MEETINGS FOR THE FY 2015-2016Name of the Committee Members (Sarvashree) Category of Director Meeting details

Held during the tenure of director / invitee Attended % of totalD.L.N.Rao Chairman - NED/Independent 5 5 100%K.R.Pradeep NED/Non Independent 5 5 100%S.Dattathreyan NED/Independent 5 5 100%P.A.Shankar NED/Independent 5 4 80%

STAKEHOLDER'S RELATIONSHIP COMMITTEE FOR THE FY 2015-2016Name of the Non Executive Director heading the Committee Shri.S.Dattathreyan Non Independent / Non ExecutiveName and designation of Compliance Officer Shri.N.Ramanathan Company Secretary & Compliance OfficerNumber of Shareholders' Complaints received so far 7Number not solved to the satisfaction of shareholders NilNumber of pending complaints Nil

INFORMATION ABOUT SHARE TRANSFER WORK TO A DELEGATED AUTHORITY

Description of delegated authority Full Address of delegated authority Telephone Numbers Fax Numbers E-Mails ID

Name and designation of officer Mr.N.Ramanathan 044 - 22205306 044 -22205317 [email protected] the Company Company Secretary / Compliance Officer

Lakshmi Vilas Bank LimitedCorporate Office, "LVB House"No.4, Sardar Patel Road,Guindy, Chennai - 600 032

Name of Board Committee Stakeholders Relationship Committee 044 - 22205306 044 -22205317 [email protected] Chairman's Name Mr.S.Dattathreyan

Lakshmi Vilas Bank LimitedCorporate Office, "LVB House"No.4, Sardar Patel Road,Guindy, Chennai - 600 032

Registrar and Share M/s.Integrated Enterprises (India) Ltd., 044 - 28140801 044- 28142479 [email protected] Agents II Floor, "Kences Towers" 28140802 28143378

No.1, Ramakrishna Street, 28140803North Usman Road,T.Nagar, Chennai - 600 017

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Annexure - D

GENERAL SHAREHOLDERS’ INFORMATION

Means of Communication:

The Bank published its financial - quarterly and annual results in English language in "Business Line" newspaper and in vernacularlanguage in "Dinamani" newspaper. The results are displayed on the Bank's website at www.lvbank.com. The official news releasesand the presentations made to the institutional investors or to the analysts are also displayed in the website.

Management discussion and analysis forms part of the Annual Report, which has been sent to the shareholders of the Bank.

Financial Year 2015-2016:

89th Annual General Meeting:

Date & Time: 10th June, 2016 at 10.00 a.m.

Venue: Registered Office, Salem Road, Kathaparai, Karur - 639 006, Tamilnadu.

Book closure and Dividend payment:

The Register of Members and the Share Transfer Books of the Bank will remain closed from 04.06.2016 to 09.06.2016 (both daysinclusive) to determine the dividend entitlement. The Dividend, on approval by shareholders shall be paid, within the prescribedperiod, to those members holding physical shares whose names stand on the Register of Members of the Bank as at 09.06.2016 andin case of dematerialized shareholding, to those beneficial owners whose name stand on the records of the Depositories as at theclose of working hours on 03.06.2016.

Information of last three Annual General Meetings held:

The 86th, 87th and 88th Annual General Meetings were held on 06th August 2013, 26th September 2014 and 03rd September 2015respectively.

Details of Special Resolutions passed during the last three AGMs are as below:

86th AGM - 06-08-2013 - 10.00 a.m. - Registered Office, Karur:

Special Resolution passed at the Meeting:

Item No. 11 - "Pursuant to the provisions of Section 81 (1A) and other applicable provisions, if any, of the Companies Act, 1956 (theAct) (including any statutory modification(s) or re-enactment thereof, for the time being in force), and in accordance with the provisionsof Memorandum & Articles of Association of the Bank, the Listing Agreement entered into with the Stock Exchanges (Stock Exchanges),the provisions of Securities and Exchange Board of India (SEBI), Foreign Exchange Management Act (FEMA), and any otherstatutory guidelines / regulations, if any, prescribed by the SEBI, Reserve Bank of India (RBI), the Stock Exchanges, the Governmentof India (GOI) or any other relevant authority from time to time, to the extent applicable, and subject to such approvals, consents,permissions, and sanctions as may be required and subject to such conditions and modifications as may be prescribed whilegranting such approvals, consents, permissions and sanctions and which may be agreed to by the Board of Directors of the Bank(herein after referred to as "Board" which term shall be deemed to include any Committee(s) constituted / to be constituted by theBoard to exercise its powers including the powers conferred by this Resolution), the consent of the Bank be and is hereby accordedto the Board to create, issue, offer and allot, upto 2,50,00,000 Equity Shares of $10/- each or hybrid instruments / securities resultingin, upto 2,50,00,000 Equity shares of $10/- each (including the provisions for reservation on firm and /or competitive basis, of suchpart of issue and for such categories of persons as may be permitted) in the course of one or more public or private offerings indomestic and/ or international market(s), either in the form of Qualified Institutional Placement (QIPs) to Qualified InstitutionalBuyers (QIBs) and / or Equity Shares through Depository Receipts, including in the form of Global Depository Receipts (GDRs)and / or American Depository Receipts (ADRs) to eligible investors (whether residents and / or non residents and / or strategicinvestors and/or institutions / banks and / or incorporated bodies and/or individuals and/or trustees and / or stabilization agents and/ or mutual funds and / or venture capital funds, and / or Indian and / or multi-lateral financial institutions or otherwise, and irrespectiveof whether or not such investors are members of the Bank, through prospectus and / or letter of offer or circular and / or on publicand / or private, such issue and allotment to be made at such time(s) in one or more tranches, at such price or prices, in such manner,on such terms and conditions as the Board, may in its absolute discretion, decide at the time of issue of the aforesaid Securities.

RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby authorized to determine theMode of Issue viz QIPs, Public Offerings, Private Placements, GDRs, ADRs etc under the respective guidelines and fix the quantumof Issue, terms of the Issue(s), including the class of Investors, to whom the Securities are to be allotted, number of Securities to beallotted in one or more tranches, issue price, face value, premium amount on issue / conversion of Securities etc in respect of each

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Mode of Issue within the overall limit of 2,50,00,000 Equity Shares of $10/- each, subject to the applicable guidelines for each Modeof Issue.

RESOLVED FURTHER THAT without prejudice to the generality of the above, the aforesaid issue of the Securities may have all orany terms or conditions or combination of terms in accordance with applicable regulations, prevalent market practices etc.

RESOLVED FURTHER THAT the Bank and / or any agency or body or persons authorised by the Board, may issue Equity Sharesand / or Depository Receipts representing the underlying Equity Shares in the Capital of the Bank or such other Securities innegotiable, registered or bearer form (as may be permissible) with such features and attributes as may be required and to provide forthe tradability and free transferability thereof as per market practices and regulations (including listing on one or more stock exchangesin and / or outside India).

RESOLVED FURTHER THAT the relevant date for the determination of applicable price for the issue Equity Shares and / orDepository Receipts shall be as per the applicable guidelines of Securities and Exchange Board of India.

RESOLVED FURTHER THAT the Board be and is hereby authorised to create, issue offer and allot such number of Equity Sharesas may be required to be issued and allotted upon conversion of any Securities referred to above and as may be necessary inaccordance with the terms of the offer, subject to the provisions of Memorandum and Articles of Association of the Bank and shallrank pari passu inter se with the then existing equity shares of the Bank in all respects including as to dividend.

RESOLVED FURTHER THAT for the purpose of giving effect to the above Resolutions, the Board be and is hereby authorised onbehalf of the Bank, to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary or desirable,and with power on behalf of the Bank to settle all questions, difficulties or doubts that may arise in this regard in its absolutediscretion and deem fit.

RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers herein conferred to anyCommittee of Directors or any one or more Executives of the Bank."

Shri. Raghuraj Gujjar, Non-Executive Chairman, Shri.S.G.Prabhakharan, Director, RBI Nominee Directors Shri.R.Ravikumar andShri. Ashok Narain did not attend the AGM (i.e., 06.08.2013) and remaining all Directors attended.



Item Note. 15 - “RESOLVED THAT pursuant to the provisions of Section 62 (1) (c) and other applicable provisions, if any, of theCompanies Act, 2013 (the Act) (including any statutory modification(s) or re-enactment thereof, for the time being in force), and inaccordance with the provisions of Memorandum & Articles of Association of the Bank, the Listing Agreement entered into with theStock Exchanges (Stock Exchanges), the provisions of Securities and Exchange Board of India (SEBI) Act 1999 as amended fromtime to time, Foreign Exchange Management Act (FEMA) 1999 as amended from time to time, and any other statutory guidelines/regulations, if any, prescribed by the SEBI, Reserve Bank of India (RBI), the Stock Exchanges, the Government of India (GOI) or anyother relevant authority from time to time, to the extent applicable, and subject to such approvals, consents, permissions, andsanctions as may be required and subject to such conditions and modifications as may be prescribed while granting such approvals,consents, permissions and sanctions and which may be agreed to by the Board of Directors of the Bank (herein after referred to as"Board" which term shall be deemed to include any Committee(s) constituted / to be constituted by the Board to exercise its powersincluding the powers conferred by this Resolution), the consent of the Bank be and is hereby accorded to the Board to create, issue,offer and allot, up to 4,25,00,000 Equity Shares of $10/- each or hybrid instruments / securities resulting in, up to 4,25,00,000 Equityshares of $10/- each (including the provisions for reservation on firm and /or competitive basis, of such part of issue and for suchcategories of persons as may be permitted) in the course of one or more public or private offerings in domestic and / or internationalmarket(s), either in the form of Qualified Institutional Placement (QIPs) to Qualified Institutional Buyers (QIBs) and / or Equity Sharesthrough Depository Receipts, including in the form of Global Depository Receipts (GDRs) and /or American Depository Receipts(ADRs) to eligible investors (whether residents and / or non-residents and / or strategic investors and / or institutions / banks and / orincorporated bodies and / or individuals and / or trustees and / or stabilization agents and / or mutual funds and / or venture capitalfunds, and / or Indian and / or multi-lateral financial institutions or otherwise, and irrespective of whether or not such investors aremembers of the Bank, through prospectus and /or letter of offer or circular and /or on public and / or private, such issue and allotmentto be made at such time(s) in one or more tranches, at such price or prices, in such manner, on such terms and conditions as theBoard, may in its absolute discretion, decide at the time of issue of the aforesaid Securities.

RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby authorized to determine theMode of Issue viz QIPs, Public Offerings, Private Placements, GDRs, ADRs etc under the respective guidelines and fix the quantumof Issue, terms of the Issue(s), including the class of Investors, to whom the Securities are to be allotted, number of Securities to beallotted in one or more tranches, issue price, face value, premium amount on issue / conversion of Securities etc in respect of eachMode of Issue within the overall limit of 4,25,00,000 Equity Shares of $ 10/- each, subject to the applicable guidelines for eachMode of Issue.

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RESOLVED FURTHER THAT without prejudice to the generality of the above, the aforesaid issue of the Securities may have all orany terms or conditions or combination of terms in accordance with applicable regulations, prevalent market practices etc.

RESOLVED FURTHER THAT the Bank and/or any agency or body or persons authorised by the Board, may issue Equity Sharesand/or Depository Receipts representing the underlying Equity Shares in the Capital of the Bank or such other Securities in negotiable,registered or bearer form (as may be permissible) with such features and attributes as may be required and to provide for thetradability and free transferability thereof as per market practices and regulations (including listing on one or more stock exchangesin and/ or outside India).

RESOLVED FURTHER THAT the relevant date for the determination of applicable price for the issue of Equity Shares and / orDepository Receipts shall be as per the applicable guidelines of Securities and Exchange Board of India.

RESOLVED FURTHER THAT the Board be and is hereby authorised to create, issue offer and allot such number of Equity Sharesas may be required to be issued and allotted upon conversion of any Securities referred to above and as may be necessary inaccordance with the terms of the offer, subject to the provisions of Memorandum and Articles of Association of the Bank and shallrank pari passu inter se with the then existing equity shares of the Bank in all respects including as to dividend.

RESOLVED FURTHER THAT for the purpose of giving effect to the above Resolutions, the Board be and is hereby authorised onbehalf of the Bank, to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary or desirable,and with power on behalf of the Bank to settle all questions, difficulties or doubts that may arise in this regard in its absolutediscretion and deem fit.

RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers herein conferred to anyCommittee of Directors or any one or more Executives of the Bank."

Item No. 16

“RESOLVED THAT in supersession of the resolution passed at the 81st Annual General Meeting held on 14th August 2008, subjectto the applicable provisions of the Foreign Exchange Management Act, 1999 (FEMA), the Companies Act, 2013 and all otherapplicable laws, rules, guidelines (including any statutory modification or re-enactment thereof for the time being in force) andsubject to all applicable approvals and permissions and sanctions and subject to such conditions as may be prescribed by theconcerned authorities while granting such approvals, permissions and sanctions which may be agreed to by the Board of Directorsof the Bank, consent of the Bank be accorded for acquiring shares of the bank by permitted foreign investors including FII's, FDI'sand NRI's by purchase or acquisition on the recognized Stock Exchanges, subject to the condition that the individual holding of theabove investors shall not exceed 5% of the paid up capital which is subject to the regulatory approval and the total holding of all theForeign Investors together shall not exceed 49% of the paid up equity share capital of the Bank within which the aggregate NRIholding shall not exceed 24% or both increased to such other maximum limit as may be prescribed from time to time.

RESOLVED FURTHER THAT the Board be and is hereby authorized to do all such acts, matters, deeds and things necessary ordesirable in connection with or incidental to giving effect to the object of the above resolution."

RBI Nominee Directors Shri.R.Ravikumar and Shri. Ashok Narain did not attend the AGM (i.e., 26.09.2014) and remaining allDirectors attended.



Item Note. 7 - “RESOLVED THAT pursuant to the provisions of Section 42, 62 (1) (c) and other applicable provisions, if any, of theCompanies Act, 2013 (the Act) read with the Companies (Share Capital and Debentures) Rules, 2014, Companies (Prospectus andAllotment of Securities) Rules, 2014 and such other rules as may be issued from time to time (including any statutory modification(s)or re-enactment(s) thereof, for the time being in force), and in accordance with the provisions of Memorandum & Articles of Associationof the Bank, the Listing Agreement entered into with the Stock Exchanges (Stock Exchanges), the provisions of Securities andExchange Board of India ("SEBI") Act 1999, as amended from time to time, Securities and Exchange Board of India (Issue of Capital& Disclosure Requirements) Regulations, 2009, ("SEBI ICDR Regulations"), as amended, Foreign Exchange Management Act(FEMA) 1999, as amended from time to time, and any other statutory guidelines / regulations, if any, prescribed by the SEBI,Reserve Bank of India (RBI), the Stock Exchanges, the Government of India ("GOI") or any other relevant authority from time to time,to the extent applicable, and subject to such approvals, consents, permissions, and sanctions as may be required and subject tosuch conditions and modifications as may be prescribed while granting such approvals, consents, permissions and sanctions andwhich may be agreed to by the Board of Directors of the Bank (hereinafter referred to as "Board" which term shall be deemed toinclude any Committee(s) constituted / to be constituted by the Board to exercise its powers including the powers conferred by thisResolution), the consent of the Bank be and is hereby accorded to the Board to create, issue, offer and allot, up to 4,25,00,000Equity Shares of $10/- each or hybrid instruments / securities resulting in, up to 4,25,00,000 Equity shares of $10/- each (includingthe provisions for reservation on firm and /or competitive basis, of such part of issue and for such categories of persons as may bepermitted) in the course of one or more public or private offerings in domestic and / or international market(s), either in the form of

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Qualified Institutional Placement (QIPs) to Qualified Institutional Buyers (QIBs) and / or Equity Shares through Depository Receipts,including in the form of Global Depository Receipts (GDRs) and / or American Depository Receipts (ADRs) to eligible investors(whether residents and / or non-residents and/or strategic investors and / or institutions / banks and / or incorporated bodies and / orindividuals and / or trustees and / or stabilization agents and/or mutual funds and / or venture capital funds, and/or Indian and / ormultilateral financial institutions or otherwise, and irrespective of whether or not such investors are members of the Bank, throughprospectus and / or letter of offer or circular and / or on public and/or private, such issue and allotment to be made at such time(s) inone or more tranches, at such price or prices, in such manner, on such terms and conditions as the Board, may in its absolutediscretion, decide at the time of issue of the aforesaid Securities.

RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby also authorised to determinethe form, terms and timing of the issue(s), including the class of investors to whom the Securities are to be allotted, number ofSecurities to be allotted in each tranche, issue price, face value, premium amount in issue / conversion / exercise / redemption, rateof interest, redemption period, listings on one or more stock exchanges in India or abroad as the Board may in its absolute discretiondeems fit and to make and accept any modifications in the proposals as may be required by the authorities involved in such issue(s)in India and / or abroad, to do all acts, deeds, matters and things and to settle any questions or difficulties that may arise in regardto the issue(s).

RESOLVED FURTHER THAT in case of a qualified institutional placement pursuant to Chapter VIII of the SEBI ICDR Regulations,the allotment of Securities (or any combination of the Securities as decided by the Board) shall only be to Qualified InstitutionalBuyers within the meaning of Chapter VIII of the ICDR Regulations, such Securities shall be fully paidup and the allotment of suchSecurities shall be completed within 12 months from the date of this resolution at such price being not less than the price determinedin accordance with the pricing formula provided under Chapter VIII of the ICDR Regulations and the Board may, in accordance withapplicable law, also offer a discount of not more than 5% or such percentage as permitted under applicable law on the pricecalculated in accordance with the pricing formula provided under the ICDR Regulations.

RESOLVED FURTHER THAT in case of QIP issue the relevant date for determination of the floor price of the Equity Shares to beissued shall be - I. in case of allotment of equity shares, the date of meeting in which the Board decides to open the proposed issue.II. in case of allotment of eligible convertible securities, either the date of the meeting in which the Board decides to open the issueof such convertible securities or the date on which the holders of such convertible securities become entitled to apply for the equityshares, as may be determined by the Board.

RESOLVED FURTHER THAT without prejudice to the generality of the above, the aforesaid issue of the Securities may have all orany terms or conditions or combination of terms in accordance with applicable regulations, prevalent market practices, etc.

RESOLVED FURTHER THAT the Bank and / or any agency or body or persons authorised by the Board, may issue Equity Sharesand/or Depository Receipts representing the underlying Equity Shares in the Capital of the Bank or such other Securities in negotiable,registered or bearer form (as may be permissible) with such features and attributes as may be required and to provide for thetradability and free transferability thereof as per market practices and regulations (including listing on one or more stock exchangesin and / or outside India).

RESOLVED FURTHER THAT the relevant date for the determination of applicable price for the issue of Equity Shares and/ orDepository Receipts shall be as per the applicable guidelines of Securities and Exchange Board of India.

RESOLVED FURTHER THAT the Board be and is hereby authorised to create, issue, offer and allot such number of Equity Sharesas may be required to be issued and allotted upon conversion of any Securities referred to above and as may be necessary inaccordance with the terms of the offer, subject to the provisions of Memorandum and Articles of Association of the Bank or otherapplicable legal provisions and shall rank pari passu inter se with the then existing equity shares of the Bank in all respects includingas to dividend.

RESOLVED FURTHER THAT for the purpose of giving effect to the above Resolutions, the Board be and is hereby authorized onbehalf of the Bank, to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary or desirable,and with power on behalf of the Bank to settle all questions, difficulties or doubts that may arise in this regard in its absolutediscretion and deem fit.

RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of the powers herein conferred to anyCommittee of Directors or any one or more Executives of the Bank."

Item Note. 8 - “RESOLVED THAT pursuant to the provisions of Section 42 and other applicable provisions, if any, of the CompaniesAct, 2013, as amended, and the rules made thereunder, Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations, 2008, as amended, the applicable provisions of the Banking Regulation Act, 1949, as amended, and the rules, circularsand guidelines issued by Reserve Bank of India ("RBI") from time to time (including any statutory amendment(s) or modification(s)or reenactment(s) thereof for the time being in force) and all other relevant provisions of applicable law(s), the provisions of theMemorandum 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 or regulatory authority(ies), the approval of the Members of the Bank be and is

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hereby accorded for borrowing / raising funds in Indian / foreign currency by issue of debt securities including but not limited to non-convertible debentures, bonds (including bonds forming part of Tier I / Tier II capital in accordance with and subject to the terms andconditions specified in the Basel III Capital Regulations prescribed by RBI, long-term infrastructure bonds or such other bonds asmay be permitted by RBI from time to time) upto $ 500 Crores (Rupees Five Hundred Crores Only) (collectively the "debt securities")by the Bank, in one or more tranches and / or series, in domestic and / or overseas market, as per the agreed structure permitted byRBI and other regulatory authorities, to eligible investors on private placement basis during a period of one year from the date ofpassing of this resolution, within the overall borrowing limits of the Bank, as approved by the Members, from time to time.

RESOLVED FURTHER THAT the Board of Directors (hereinafter referred to as "Board") of the Bank or any Committee of the Boardor such other persons as may be authorized by the Board, be and are hereby authorized to negotiate, modify and finalize the termsand conditions of the debt securities and sign the relevant documents / agreements in connection with the private placement of thedebt 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, inconnection with the offering(s), issuance(s) and / or allotment(s) on private placement of debt securities by the Bank and to furtherdelegate the above powers to any Committee of Directors or any personnel of the Bank to act on their behalf as they may deem fitand to do all such other acts and things and to execute all such documents as may be necessary for giving effect to this resolution."

Shri.S.G.Prabhakharan, Director, RBI Nominee Directors Shri.Vivek Deep and Shri.K.Babuji did not attend the AGM (i.e., 03.09.2015)and remaining all Directors attended.

No special resolutions were passed through postal ballot during the last financial year ending 31.03.2016. As on date, there is noproposal requiring approval of the members through special resolution to be passed through postal ballot.

Annual General Meeting (Next Year) on or before September, 2017 in line with the provisions under the Companies Act.

Board Meetings:

Results for the quarter ending June 2016 - On or before 14th August, 2016

Results for the quarter ending September 2016 - On or before 14th November, 2016.

Results for the quarter ending December 2016 - On or before 14th February, 2017.

Results for the quarter ending March 2017 - On or before 30th May, 2017.

Compliance with Reg. 34(3) & Schedule V of SEBI (LODR) Regulation 2015:

Names and addresses of the Stock Exchanges where equity shares of Lakshmi Vilas Bank Limited are listed are as below:

The National Stock Exchange of India Limited The Bombay Stock Exchange LimitedExchange Plaza, 5th Floor, Plot No.C/1, Floor 25, PJ Towers,G Block, Bandra - Kurla Complex, Dalal Street,Bandra (E), Mumbai - 400 051 Mumbai - 400 001.

Bank confirms that the Annual Listing Fees have been paid to the National Stock Exchange & Bombay Stock Exchange.

Trading Code with Stock Exchanges: LAKSHVILAS

Stock Market Data

MonthListed with NSE on 21.06.2000 Listed with BSE on 25.09.2012

High Low No of Shares Traded High Low No of shares TradedApril, 2015 111.40 96.55 12648560 111.45 96.60 7732088

May, 2015 106.90 98.00 8591059 106.90 98.00 1397628

June, 2015 102.40 88.35 10324613 102.30 88.60 1603658

July, 2015 98.15 87.00 17705643 97.95 87.20 2551817

August, 2015 90.60 71.30 11692718 90.50 63.50 2042553

September, 2015 85.40 69.20 5597273 85.00 69.95 895229

October, 2015 98.00 83.60 15624702 97.80 83.00 3551299

November, 2015 96.00 80.55 5238049 96.00 80.55 1133946

December, 2015 104.25 86.80 6012531 104.50 84.00 986884

January, 2016 102.25 85.50 7182811 104.95 86.00 1440890

February, 2016 108.00 86.00 5394994 104.40 85.05 1375358

March, 2016 92.10 80.35 9138519 93.00 80.50 2983037

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Share Transfer Process:

Bank ensures that all requests pertaining to physical shares are processed by the Registrar and Share Transfer Agent - M/s. IntegratedEnterprises (India) Limited and approved by Stakeholders Relationship Committee / Board and the certificates are dispatched to thetransferees within a maximum period of 15 days from the date of receipt of the transfer documents by M/s.Integrated Enterprises(India) Limited, provided if the share documents are valid in all respects. Share transfers, dividend payments, demat requests and allother investor related activities are attended to and processed at the office of our Registrar and Share Transfer Agent.

Shareholders' Correspondence should be addressed to:

M/s. Integrated Enterprises (India) LimitedII Floor, “Kences Towers” No.1 Ramakrishna StreetNorth Usman Road, T. Nagar, Chennai - 600 017Ph: 044-28140801/2/3 Fax: 28142479/28143378Email: [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 in certain financial years and the same arelisted with the WDM segment of the NSE. The details of the debenture trustee is as below:

IDBI Trusteeship Services LimitedRegd. Office: Asian Building, Ground Floor,17, R. Kamani Marg, Ballard Estate, Mumbai - 400 001.Phone: 022-4080700 | Fax: 022-66311776 | E-mail: [email protected]

The Registrar to the issue and share transfer agents are M/s. Integrated Enterprises (India) Limited.

Performance of the Equity Shares relative to NSE Nifty Index during the year 2015-16

Performance of the Equity Shares relative to BSE Index during the year 2015-16

105

100

95

90

85

80

75

70

Apr-15

May-15

Jun-15

Jul-15

Aug-15

Sep-15

Oct-15

Nov-15

Dec-15

Jan-16

Feb-16

Mar-16

6,500

7,000

7,500

8,000

8,500

105

100

95

90

85

80

75

70

Apr-15

May-15

Jun-15

Jul-15

Aug-15

Sep-15

Oct-15

Nov-15

Dec-15

Jan-16

Feb-16

Mar-16

22,000

23,000

24,000

25,000

26,000

27,000

28,000

29,000

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Compliance with Reg. 6 (2) (d) of SEBI (LODR) Regulations, 2015:

SEBI has advised the listed companies to designate an exclusive email ID for Redressal of Investor Complaints. Pursuant toReg. 6 (2) (d) of SEBI (LODR) Regulations, 2015, a separate e-mail id viz., [email protected] is designated exclusivelyfor redressal of investors' complaints and the Compliance Officer monitors the same.

Distribution of Shareholding in break up as on 31.03.2016 is given below:

Category Number of Records % Number of Shares %

Upto 500 45359 71.39 6383415 3.56

501 - 1000 6912 10.88 5223049 2.91

1001 - 2000 4922 7.75 7241547 4.04

2001 - 3000 1969 3.10 4830007 2.69

3001 - 4000 1170 1.84 4093553 2.28

4001 - 5000 691 1.09 3129871 1.74

5001 - 10000 1369 2.15 9649547 5.38

ABOVE 10000 1146 1.80 138910620 77.40

TOTAL 63538 100.00 179461609 100.00

Dematerialization:

Bank has 63538 shareholders as on 31.03.2016, being fully paid shares of $ 10/- each. Of this 43758 folios representing 168924797(94.13%) shares are in Demat Form.

Bank's Equity shares ISIN : INE694C01018

CIN L65110TN1926PLC001377

The shares of the Bank are admitted under demat mode with both the depositories of the country i.e., National Securities DepositoryLimited and Central Depository Services (India) Limited.

Nomination Facility:

Shareholders may avail of the Nomination Facility as prescribed under Section 72 of the Companies Act, 2013.

Bank Account Details:

In order to avoid fraudulent encashment of dividend warrants, the members holding shares in physical form are requested to providetheir Bank Account details to the Office of our Registrar and Share Transfer Agent.

Unclaimed Dividend / Refund:

Information in respect of Unclaimed Dividend & Refund and last date for making claim is given below:

Shares held in Electronic form:

All instructions regarding bank account details, which the shareholders wish to be incorporated in their dividend warrant will have tobe submitted to their depository participants. Instructions already given by them in respect of shares held in physical form will not beautomatically applicable to the dividend paid on shares held in electronic form and the Bank or STA will not entertain any request fordeletion / change of Bank details already printed on dividend warrants as per information received from both the depositories.

Unclaimed Dividend:

Financial Date of Amount as on Last dateYear Declaration 31.03.2016 in $ for claim

2008-09 28.08.2009 22,56,125.00 27.08.2016

2009-10 04.08.2010 10,13,281.20 03.08.2017

2010-11 14.09.2011 34,05,180.00 13.09.2018

2011-12 14.09.2012 48,77,495.00 13.09.2019

2012-13 06.08.2013 50,11,968.00 05.08.2020

2013-14 26.09.2014 21,07,643.00 25.09.2021

2014-15 03.09.2015 43,93,488.00 02.09.2022

Unclaimed Refund:

Right issue Date of Amount as on Last dateYear Refund 31.03.2016 in $ for claim

2009-10 26.12.2009 88,182.00 25.12.2016

2014-15 02.09.2014 3,76,700.00 01.09.2021

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All instructions regarding change of address, nomination, power of attorney etc., shall be given directly to their Depository participantsand the bank or STA will not entertain any such requests directly. Shareholders having the holdings partly in demat form and partlyin physical form, should follow the steps narrated above separately.

Other Disclosures:

The Bank has complied with all mandatory requirements prescribed under SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015. A Certificate to this effect from the Bank's Statutory Auditors is annexed.

With respect to compliance with Discretionary Requirements as mentioned in Part E of Schedule II of SEBI (Listing Obligations andDisclosure 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 ofChairperson and Managing Director & CEO.

2. The Internal Auditor report directly to the Audit Committee.

3. The Bank continues to be in a regime of declaring Financial Statements with unmodified Audit Opinion.

There were no significant and material orders passed by the regulators, courts, tribunals impacting the going concern status andBank's operations in future.

Disclosures on materially significant related Party Transactions:

During the Financial year, the Bank did not enter into any materially significant related party transaction which could have a potentialconflict of interest with its promoters, directors, management or relatives etc., except the transactions entered into in the normalcourse 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:

http://www.lvbank.com/UserFiles/File/RelatedPartyTransactions_Policy.pdf

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 matterrelated to capital markets, during the last three years.

Whistle Blower Policy:

The Bank has laid down a Whistle Blower Policy, in line with the regulatory requirements and during the year, no person has beendenied access to the audit committee.

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 ManagementPersonnel. The said Code of Conduct has been placed on the website of the Company www.lvbank.com. The Annual Report containsa declaration signed by CEO affirming compliance to the Code of Conduct by Directors and Senior Management Personnel.

CEO/CFO Certification:

The Compliance certificate under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 furnished by theChief Executive Officer and Chief Financial Officer has been duly submitted to the Board.

DECLARATION BY MD & CEO:

The Board of Directors and the Senior Management Personnel of the Bank have affirmed confirming to the Code of Conduct of theBank for the year ended 31.03.2016.

Parthasarathi Mukherjee

Managing Director & CEO

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ANNUAL REPORT ON CSR ACTIVITIESIn India, the concept of CSR is governed by clause 135 of the Companies Act, 2013, which was passed by both Houses of theParliament, and had received the assent of the President of India on 29th August 2013. The Ministry of Corporate Affairs has notifiedSection 135 and Schedule VII of the Companies Act, 2013 as well as the provisions of the Companies (Corporate Social ResponsibilityPolicy) Rules, 2014 to come into effect from April 1, 2014. The Act defines 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 needyindividuals / 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 bedeveloped, reviewed and updated by reference to relevant codes of Corporate Governance and International standards (or) bestpractices 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 thepreferred 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 http://www.lvbank.com/download/Corporate_Social_Responsibility_policy.pdf

Composition of CSR committee:

The Bank has a Board-Level CSR committee that provides oversight of CSR policy execution that the CSR objectives of the Companyare met. Our CSR committee comprises:

• Shri. S.G.Prabhakharan, Chairperson

• Shri. Parthasarathi Mukherjee, MD & CEO, Member

• Shri. N.Malayalaramamirtham, Member

• Smt. E.V.Sumithasri, Member

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 profit of $ 5 crore or more during any financial year shall ensurethat the company spends, in every financial year, at least 2% of the average net profits made during the three immediately precedingfinancial years, in pursuance of its Corporate Social Responsibility Policy. The financial details as sought by the Companies Act,2013 are as follows:

• Average Net profit of the Bank for last three financial years is $12212.80 Lacs

• Prescribed CSR expenditure (2% of Average Net profit) for FY 2015-16 is $ 244.26 Lacs

• Amount to be spent for the current fiscal is $ 244.26 Lacs

• Amount unspent in the last financial year (FY2014-15) is $ 190.50 Lacs

• Total amount to be spent for the financial year is $ 434.76 Lacs

• Amount spent during the current fiscal is $ 87.90 Lacs

• Amount unspent for FY 2015-16 is $ 346.86 Lacs

Annexure - E

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*Details of the implementing agencies are listed below:

Sanitation Project - District Rural Development Agency and Olirum Erode Foundation Trust : Social Business Projects - SaurashtraMedical & Educational Charitable Trust, Swiss Emmaus Leprosy Relief Work India and Karur Rotary Club Trust : Promotion ofEducation - AVMM & Sons, Sri Vasavi Vidhyalaya Matriculation Higher Secondary School, Karnataka Arya Vysya Charitable Trustand Pasupathy Aided Middle School : Rehabilitation - Smt. Rajeswari Radhakrishnan Charitable Trust, AID India and TamilnaduArya Vysya Maha Sabha.

During the first week of December 2015 Chennai and Cuddalore districts were heavily affected by the torrential rainfall and resultantFloods. The flood resulted in loss of lives, property and thousands of people were left homeless. Post the rains the city continued tostruggle under the unanticipated impact.

At this juncture, we marshaled our resources and successfully accomplished the task of providing relief materials to even the mostinterior and worst hit areas of the city. The sourcing and distribution of relief materials were handled by staff and senior functionariesof the Bank who ensured distribution to all flood affected zones throughout Chennai and parts of Tamilnadu.

Our Cuddalore Staff members also participated in the relief campaign by providing food items to the needy people of Cuddaloredistrict.

Your Bank has done all the preliminary work like identification of priority areas, checking the due diligence etc. so that amount can bespent on CSR activities as per statutory requirements.

There are several projects which are under various stages of appraisal by the bank. Thus we are well poised to spend the balanceamount during the Current FY.

Our CSR responsibilities:

We hereby affirm that the CSR policy, as approved by the Board, has been implemented and the CSR committee monitors theimplementation of the CSR projects and activities in compliance with our CSR objectives.

(1) (2) (3) (4) (5) (6) (7) (8)

S. CSR project (or) Sector in Projects or programs Amount Amount spent Cumulative AmountNo. activity identified which the (1) Local area or outlay on the projects expenditure spent: Direct

project is other (2) Specify the (budget) or programs upto to the or throughcovered state and district projects or Sub-heads reporting implementing

where projects or programs (1) Direct period agencyprograms were wise expenditure on

undertaken projects orprograms

(2) Over heads:

1 Swachh Bharat Sanitation Tamilnadu 24.53 19.80 19.80 Direct - 15.52Abhiyan Project Implementing

agency - 4.28

2 Health Care Social Tamilnadu, Gujarat 18.49 18.49 18.49 ImplementingBusiness and agency -Projects Andhra Pradesh 18.49

3 Promoting Promotion Tamilnadu 19.35 19.35 19.35 ImplementingEducation of and agency -

Education Karnataka 19.35

4 Rehabilitation Rehabilitation Tamilnadu 30.26 30.26 30.26 Direct - 20.66Implementingagency - 9.60

Amount Spent ($) 87.90

Chennai Parthasarathi Mukherjee S.G. PrabhakharanApril 20, 2016 MD & CEO Chairperson, CSR Committee

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

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Form No. MGT - 9

EXTRACT OF ANNUAL RETURNas on the financial year ended 31/03/2016

[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 office and : SALEM ROAD, KATHAPARAI,contact details KARUR - 639006

TAMIL NADUTel: 04324- 220051Email : [email protected] : www.lvbank.com

(vi) Whether listed company : YES (NSE & BSE)

(vii) Name, Address and Contact details of Registrar : INTEGRATED ENTERPRISES (INDIA) LIMITEDand Transfer Agent, if any II Floor, 'Kences Towers'

No.1, Ramakrishna Street,North Usman Road, T.Nagar,Chennai - 600017Tel: +91 44 28140801Fax: +91 44 28142479Email: [email protected]: www.intergratedindia.in

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

1 BANKING 64191 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES :

Annexure - F

Sl. Name and Address CIN / Holding / Subsidiary / % of ApplicableNo. of the Company GLN Associate shares held Section

Not Applicable

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IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

(i) Category-wise Share Holding:

NO OF SHARES HELD AT THE NO OF SHARES HELD ATTHE BEGINNING OF THE YEAR THE END OF THE YEAR

CAT CATEGORY OF

DEMAT PHYSICAL TOTAL% OF

DEMAT PHYSICAL TOTAL% OF

%CODE SHAREHOLDERS

TOTAL TOTALCHANGE

SHARES SHARESDURING

THE YEAR

A SHAREHOLDING OF PROMOTERAND PROMOTER GROUP

(1) Indian

a. Individual / Hindu Undivided Family 4909189 0 4909189 2.74 5005845 0 5005845 2.79 0.05

b. Central Government 0 0 0 0 0 0 0 0 0

c. State Government 0 0 0 0 0 0 0 0 0

d. Bodies Corporate 12201552 0 12201552 6.81 12328132 0 12328132 6.87 0.06

e. Financial Institutions/Banks 0 0 0 0 0 0 0 0 0

f. Any other (specify) 0 0 0 0 0 0 0 0 0

SUB TOTAL A(1) 17110741 0 17110741 9.55 17333977 0 17333977 9.66 0.11

(2) Foreign

a. Individual(Non resident/foreign) 0 0 0 0 0 0 0 0 0

b. Bodies Corporate 0 0 0 0 0 0 0 0 0

c. Institutions 0 0 0 0 0 0 0 0 0

d. Qualified Foreign Investor 0 0 0 0 0 0 0 0 0

e. Any other(specify) 0 0 0 0 0 0 0 0 0

SUB TOTAL A(2) 0 0 0 0 0 0 0 0 0

Total Shareholding of promoter and 17110741 0 17110741 9.55 17333977 0 17333977 9.66 0.11Promoter Group (A) = A(1) + A(2)

B Public Shareholding

(1) Institutions

a. Mutual funds/UTI 389476 0 389476 0.22 2257 0 2257 0.00 -0.22

b. Financial Institutions/Banks 8882798 2250 8885048 4.96 6080828 2250 6083078 3.39 -1.57

c. Central Government 0 0 0 0 0 0 0 0 0

d. State Government(s) 0 0 0 0 0 0 0 0 0

e. Venture Capital Funds 0 0 0 0 0 0 0 0 0

f. Insurance Companies 400178 0 400178 0.22 387678 0 387678 0.22 0

g. Foreign Institutional Investors 21158801 10850 21169651 11.82 10610832 10850 10621682 5.92 -5.90

h. Foreign Venture Capital Investors 0 0 0 0 0 0 0 0 0

i. Qualified Foreign Investor 0 0 0 0 0 0 0 0 0

j. Any other(specify) 676806 0 676806 0.38 8064173 0 8064173 4.49 4.11

SUB TOTAL B(1) 31508059 13100 31521159 17.59 25145768 13100 25158868 14.02 -3.57(2) Non-Institutions

a. Bodies Corporate 47222220 19267 47241487 26.37 51873767 18367 51892134 28.92 2.55(Indian/Foreign/Overseas)

b. Individuals(Resident/NRI/Foreign National)

(i) Individual shareholders holding 31853322 9940428 41793750 23.33 30222194 9371156 39593350 22.06 -1.27Nominal share Capital upto $ 1 Lakh

(ii) Individual shareholders holding 37998252 1330271 39328523 21.95 41804539 1134189 42938728 23.93 1.98Nominal share Capital above $ 1 Lakh

c. Qualified Foreign Investor 0 0 0 0 0 0 0 0 0d. Any other(specify) 2170949 0 2170949 1.21 2544552 0 2544552 1.42 0.21

SUB TOTAL B(2) 119244743 11289966 130534709 72.86 126445052 10523712 136968764 76.32 3.46Total Public Share Holding 150752802 11303066 162055868 90.45 151590820 10536812 162127632 90.34 -0.11(B)=B(1)+B(2)TOTAL (A)+(B) 167863543 11303066 179166609 100.00 168924797 10536812 179461609 100.00 0

C Shares held by Custodians and against with 0 0 0 0 0 0 0 0 0Depository Receipts have been issued

GRAND TOTAL (A)+(B)+(C) 167863543 11303066 179166609 100.00 168924797 10536812 179461609 100.00 0

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94


(ii) Shareholding of promoters:

Sl.No.

Shareholder’s Name

Shareholding at thebeginning of the year

Shareholding at theend of the year %

changein shareholdingduring

the year

% of SharesPledged /

encumberedto totalshares

% of totalSharesof the

company

No. ofShares

% of SharesPledged /

encumberedto totalshares


company

No. ofShares

1 K R PRADEEP 4165285 2.32 0.00 4215285 2.35 0.00 0.03

2 ANURADHA PRADEEP 6216 0.00 0.00 6216 0.00 0.00 0.00

3 PRANAVA ELECTRONICS PRIVATE LIMITED 3412464 1.90 0.00 3412464 1.90 0.00 0.00

4 KARE ELECTRONICS AND DEVELOPMENT PRIVATE 1259569 0.70 0.00 1259569 0.70 0.00 0.00

LIMITED

5 S G PRABHAKHARAN 4004 0.00 0.00 4004 0.00 0.00 0.00

6 USHA R PRABAKARAN 115256 0.06 0.00 115256 0.06 0.00 0.00

7 G P PRAJNESH 14200 0.01 0.00 14200 0.01 0.00 0.00

8 G SUDHAKARA GUPTA 2000 0.00 0.00 2000 0.00 0.00 0.00

9 SASIKALADHEVI M R 1492 0.00 0.00 1500 0.00 0.00 0.00

10 ARISTON CAPITAL ASSET HOLDINGS PRIVATE LIMITED 1847559 1.03 1.03 1847559 1.03 0.46 0.00

11 TANGERINE CAPITAL ASSET HOLDINGS LLP 2685678 1.50 1.50 2812258 1.57 1.57 0.07

12 XS REAL PROPERTIES PRIVATE LIMITED 14008 0.01 0.00 14008 0.01 0.00 0.00

13 M P SHYAM 135622 0.08 0.00 135622 0.08 0.00 0.00

14 M S SHARMILA 69870 0.04 0.00 119870 0.07 0.00 0.03

15 M S NIVEDITA 10000 0.01 0.00 10000 0.01 0.00 0.00

16 M P VIKRAM SETTY 1202 0.00 0.00 1202 0.00 0.00 0.00

17 M K PANDURANGA SETTY 2071 0.00 0.00 2071 0.00 0.00 0.00

18 P VASANTHA 17082 0.01 0.00 17930 0.01 0.00 0.00

19 CAUVERY MOTORS PRIVATE LIMITED 1009759 0.56 0.56 1009759 0.56 0.56 0.00

20 ADVAITH MOTORS PRIVATE LIMITED 1972515 1.10 0.69 1972515 1.10 1.10 0.00

21 N MALAYALARAMAMIRTHAM 81628 0.05 0.02 81628 0.05 0.02 0.00

22 M GEETHA 19142 0.01 0.00 19142 0.01 0.00 0.00

23 M SHALINI 11925 0.01 0.00 12225 0.01 0.00 0.00

24 M BALASUBRAMANIAN 6531 0.00 0.00 6531 0.00 0.00 0.00

25 N SAIPRASAD 153281 0.09 0.01 152131 0.08 0.01 -0.01

26 N SUSILA 11965 0.01 0.00 11965 0.01 0.00 0.00

27 N SIVAKUMAR 56985 0.03 0.01 56985 0.03 0.01 0.00

28 N DWARAKANATHAN 4717 0.00 0.00 717 0.00 0.00 0.00

29 V N JAYAPRAKASH 18715 0.01 0.01 19365 0.01 0.01 0.00

Total 17110741 9.55 3.83 17333977 9.66 3.73 0.11

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95


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

Sl.No.

NAME


Increase /Decrease

Cumulative Shareholdingduring the year

No. ofShares

% of totalshares of the

Company

No. ofShares

No. of Shares% of total

shares of theCompany

1 K R PRADEEP

PAN :AALPP7910M

Opening Balance as on 01/04/2015 4165285 2.32

Add: 04/09/2015 Market Purchase 50000 4215285

Closing Balance as on 31/03/2016 4215285 2.35

2 ANURADHA PRADEEP

PAN :AALPP7909A



3 PRANAVA ELECTRONICS PRIVATE LIMITED

PAN :AADCP2196C



4 KARE ELECTRONICS AND DEVELOPMENT PRIVATE LIMITED

PAN :AABCK7679R



5 S G PRABHAKHARAN

PAN :AAHPP4774F



6 USHA R PRABAKARAN

PAN :AAAPU1920B



7 G P PRAJNESH

PAN :AWGPP5083N



8 G SUDHAKARA GUPTA

PAN :AAEPG3217F



9 SASIKALADHEVI M R

PAN :ASXPS1973K




10 ARISTON CAPITAL ASSET HOLDINGS PRIVATE LIMITED

PAN :AAGCA8511M



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96


Sl.No.

NAME


Increase /Decrease


No. ofShares


Company

No. ofShares No. of Shares


Company

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

11 TANGERINE CAPITAL ASSET HOLDINGS LLP

PAN: AAHFT8682L





12 XS REAL PROPERTIES PRIVATE LIMITED

PAN :AAACX0030G



13 M P SHYAM

PAN :AFAPS4343H



14 M S SHARMILA

PAN :AKWPS8613D




15 M S NIVEDITA

PAN : AHMPN4589N



16 M P VIKRAM SETTY

PAN :ADIPV3751G



17 M K PANDURANGA SETTY

PAN :ACIPP7049J



18 P VASANTHA

PAN :AASPV4548E




19 CAUVERY MOTORS PRIVATE LIMITED

PAN :AAACC5924A



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97


Sl.No.

NAME


Increase /Decrease


No. ofShares


CompanyNo. of Shares


Company


20 ADVAITH MOTORS PRIVATE LIMITED

PAN :AADCA2399A



21 N MALAYALARAMAMIRTHAM

PAN :AKHPM6607N



22 M GEETHA

PAN :AHWPG9290M



23 M SHALINI

PAN :BHDPS7018D




24 M. BALASUBRAMANIAN

PAN :AGQPB1246H



25 N SAIPRASAD

PAN :ABBPS6585L


Less: 10/04/2015 Market sale -100 153181

Less: 18/12/2015 Market sale -300 152881

Less: 25/12/2015 Market sale -250 152631

Less: 31/12/2015 Market sale -500 152131


26 N SUSILA

PAN :ALJPS1369J



27 N SIVAKUMAR

PAN :ABBPS6599J



28 N DWARAKANATHAN

PAN :AHLPD1263C


Less: 11/03/2016 Market sale -4000 717


No. ofShares

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98


(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

29 V N JAYAPRAKASH

PAN :AAHPJ6354P




Sl.No.

NAME


Increase /Decrease


No. ofShares


Company

No. ofShares

No. of Shares% of total

shares of theCompany


Sl.No.

NAME


Increase /Decrease

CumulativeShareholding

during the year

No. ofShares


Company

No. ofShares

No. ofShares

% of totalShares of

theCompany

1 STUPENDORS TRADERS PVT LTDPAN: AADCS7524FOpening Balance as on 01/04/2015 8057437 4.50

Less 08/01/2016 Market Sale -120000 7937437Less 05/02/2016 Market Sale -120500 7816937Less 26/02/2016 Market Sale -145000 7671937Less 04/03/2016 Market Sale -267366 7404571Less 11/03/2016 Market Sale -189192 7215379Less 18/03/2016 Market Sale -609769 6605610Less 25/03/2016 Market Sale -207540 6398070Less 31/03/2016 Market Sale -502410 5895660

Closing Balance as on 31/03/2016 5895660 3.292 M N Dastur And Co Pvt Ltd

PAN:AABCM2136MOpening Balance as on 01/04/2015 6677716 3.73

Add 15/05/2015 Market Purchase 500000 7177716Add 22/05/2015 Market Purchase 20000 7197716Add 29/05/2015 Market Purchase 25000 7222716Add 05/06/2015 Market Purchase 72904 7295620Add 12/06/2015 Market Purchase 125000 7420620Less 26/06/2015 Market Sale -10000 7410620Add 21/08/2015 Market Purchase 40000 7450620Add 11/09/2015 Market Purchase 240000 7690620Less 09/10/2015 Market Sale -25000 7665620Less 16/10/2015 Market Sale -100000 7565620Add 23/10/2015 Market Purchase 5976 7571596Add 30/10/2015 Market Purchase 50000 7621596Add 06/11/2015 Market Purchase 58297 7679893Add 13/11/2015 Market Purchase 9303 7689196Add 20/11/2015 Market Purchase 31244 7720440Add 04/12/2015 Market Purchase 30000 7750440Add 11/12/2015 Market Purchase 2500 7752940Add 18/12/2015 Market Purchase 2500 7755440Add 22/01/2016 Market Purchase 25000 7780440


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99


(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): (Contd.)

Sl.No.

NAME


Increase /Decrease


during the year

No. ofShares


Company

No. ofShares

No. ofShares

% of totalShares of

theCompany

3 MAXLIFE INSURANCE CO LTD A/C PARTICIPATING FUNDPAN: AACCM3201EOpening Balance as on 01/04/2015 5506951 3.07

Add 18/09/2015 Market Purchase 281233 5788184Add 25/09/2015 Market Purchase 470872 6259056Add 30/09/2015 Market Purchase 71556 6330612Add 02/10/2015 Market Purchase 73344 6403956Add 09/10/2015 Market Purchase 564716 6968672Add 30/10/2015 Market Purchase 300000 7268672Less 26/02/2016 Market Sale -563750 6704922Add 04/03/2016 Market Purchase 573735 7278657Add 18/03/2016 Market Purchase 202388 7481045Add 31/03/2016 Market Purchase 100000 7581045

Closing Balance as on 31/03/2016 7581045 4.234 JUPITER CAPITAL PRIVATE LIMITED

PAN: AABCJ5666ROpening Balance as on 01/04/2015 3729193 2.08

Add 12/06/2015 Market Purchase 45337 3774530Add 18/06/2015 Market Purchase 21000 3795530Add 26/06/2015 Market Purchase 16000 3811530Add 30/06/2015 Market Purchase 10500 3822030Add 31/07/2015 Market Purchase 25000 3847030Add 28/08/2015 Market Purchase 109887 3956917Add 11/09/2015 Market Purchase 31164 3988081Add 18/09/2015 Market Purchase 18836 4006917Less 08/01/2016 Market Sale -100433 3906484Less 15/01/2016 Market Sale -39567 3866917Less 29/01/2016 Market Sale -24236 3842681Less 05/02/2016 Market Sale -8116 3834565

Closing Balance as on 31/03/2016 3834565 2.145 MORGAN STANLEY MAURITIUS COMPANY LIMITED

PAN: AADCM5927GOpening Balance as on 01/04/2015 5300269 2.96

Less 10/04/2015 Market Sale -11234 5289035Less 17/04/2015 Market Sale -12179 5276856Less 24/04/2015 Market Sale -27321 5249535Less 08/05/2015 Market Sale -17351 5232184Less 15/05/2015 Market Sale -217985 5014199Less 22/05/2015 Market Sale -157819 4856380Less 29/05/2015 Market Sale -45158 4811222Less 05/06/2015 Market Sale -60339 4750883Less 12/06/2015 Market Sale -38362 4712521Less 18/06/2015 Market Sale -51343 4661178Less 26/06/2015 Market Sale -32535 4628643Less 30/06/2015 Market Sale -18039 4610604Less 03/07/2015 Market Sale -6027 4604577Less 10/07/2015 Market Sale -5561 4599016Less 31/07/2015 Market Sale -183550 4415466Less 07/08/2015 Market Sale -354373 4061093Less 14/08/2015 Market Sale -209767 3851326Less 21/08/2015 Market Sale -190518 3660808Less 28/08/2015 Market Sale -28829 3631979

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100



Sl.No.

NAME


Increase /Decrease


during the year

No. ofShares


Company

No. ofShares

No. ofShares

% of totalShares of

theCompany

Less 04/09/2015 Market Sale -47942 3584037Less 11/09/2015 Market Sale -38883 3545154Less 18/09/2015 Market Sale -20875 3524279Less 25/09/2015 Market Sale -30918 3493361Less 30/09/2015 Market Sale -25527 3467834Less 02/10/2015 Market Sale -9200 3458634Less 09/10/2015 Market Sale -29802 3428832Less 16/10/2015 Market Sale -32670 3396162Less 23/10/2015 Market Sale -33857 3362305Less 06/11/2015 Market Sale -2408 3359897Less 20/11/2015 Market Sale -4717 3355180Less 08/01/2016 Market Sale -15498 3339682Less 15/01/2016 Market Sale -6740 3332942Less 04/03/2016 Market Sale -222169 3110773Less 11/03/2016 Market Sale -90301 3020472Less 18/03/2016 Market Sale -1062532 1957940Less 25/03/2016 Market Sale -258217 1699723Less 31/03/2016 Market Sale -386610 1313113

Closing Balance as on 31/03/2016 1313113 0.736 KEDAR SHIVANAND MANKEKAR

PAN: AFMPM4965KOpening Balance as on 01/04/2015 3780000 2.11Closing Balance as on 31/03/2016 3780000 2.11

7 INDIA DEEP VALUE FUNDPAN: AABCI7868NOpening Balance as on 01/04/2015 3299523 1.84Closing Balance as on 31/03/2016 3299523 1.84

8 ALBULA INVESTMENT FUND LTDPAN: AAHCA3597QOpening Balance as on 01/04/2015 3747186 2.09

Less 10/04/2015 Market Sale -120000 3627186Less 17/04/2015 Market Sale -80000 3547186Less 24/04/2015 Market Sale -100000 3447186Less 01/05/2015 Market Sale -20000 3427186Less 15/05/2015 Market Sale -40000 3387186Less 22/05/2015 Market Sale -100000 3287186Less 29/05/2015 Market Sale -100000 3187186Less 05/06/2015 Market Sale -100000 3087186Less 12/06/2015 Market Sale -40000 3047186Add 27/11/2015 Market Purchase 83226 3130412Add 19/02/2016 Market Purchase 20000 3150412

Closing Balance as on 31/03/2016 3150412 1.769 NATIONAL WESTMINSTER BANK PLC AS TRUSTEE OF THE JUPITER INDIA FUND

PAN: AABTT4862EOpening Balance as on 01/04/2015 2933333 1.64Closing Balance as on 31/03/2016 2933333 1.64

10 INDIAN BANKPAN: AAACI1607GOpening Balance as on 01/04/2015 2844573 1.59

Less 10/04/2015 Market Sale -40000 2804573Less 17/04/2015 Market Sale -25000 2779573Less 01/05/2015 Market Sale -15000 2764573

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101


Less 05/06/2015 Market Sale -1000 2763573Less 23/10/2015 Market Sale -20000 2743573Less 30/10/2015 Market Sale -10000 2733573Less 27/11/2015 Market Sale -28000 2705573Less 04/12/2015 Market Sale -18500 2687073Less 11/12/2015 Market Sale -2231 2684842Less 18/12/2015 Market Sale -70389 2614453Less 25/12/2015 Market Sale -77000 2537453Less 31/12/2015 Market Sale -83000 2454453Less 08/01/2016 Market Sale -22907 2431546Less 29/01/2016 Market Sale -24000 2407546Less 05/02/2016 Market Sale -28000 2379546Less 12/02/2016 Market Sale -19897 2359649Less 19/02/2016 Market Sale -4000 2355649Less 26/02/2016 Market Sale -10000 2345649Less 04/03/2016 Market Sale -20000 2325649Less 18/03/2016 Market Sale -15000 2310649Less 25/03/2016 Market Sale -10000 2300649

Closing Balance as on 31/03/2016 2300649 1.2811 MARIANNAN AROKIA SWAMY

PAN: AAEPC4399QOpening Balance as on 01/04/2015 2624656 1.46

Add 30/09/2015 Market Purchase 10000 2634656Closing Balance as on 31/03/2016 2634656 1.47

12 THE FEDERAL BANK LTDPAN: AABCT0020HOpening Balance as on 01/04/2015 2575000 1.44

Less 05/06/2015 Market Sale -40000 2535000Less 18/06/2015 Market Sale -155000 2380000Less 19/06/2015 Market Sale -115350 2264650Less 26/06/2015 Market Sale -337768 1926882Less 30/06/2015 Market Sale -158000 1768882Less 24/07/2015 Market Sale -86000 1682882Less 31/07/2015 Market Sale -10600 1672282Less 07/08/2015 Market Sale -10000 1662282Less 25/12/2015 Market Sale -4900 1657382Less 31/12/2015 Market Sale -137266 1520116Less 08/01/2016 Market Sale -60440 1459676Less 15/01/2016 Market Sale -9000 1450676Less 05/02/2016 Market Sale -65500 1385176Less 12/02/2016 Market Sale -5684 1379492

Closing Balance as on 31/03/2016 1379492 0.7713 THE KARUR VYSYA BANK LTD

PAN: AAACT3373JOpening Balance as on 01/04/2015 2080000 1.16

Less 10/04/2015 Market Sale -235000 1845000Less 17/04/2015 Market Sale -40000 1805000

Closing Balance as on 31/03/2016 1805000 1.0114 SOUTH STAR DISTILLERIES AND BREWERIES PRIVATE LIMITED

PAN: ABLFS3967JOpening Balance as on 01/04/2015 812402 0.45

Add 12/06/2015 Market Purchase 398756 1211158


Sl.No.

NAME


Increase /Decrease


during the year

No. ofShares


Company

No. ofShares

No. ofShares

% of totalShares of

theCompany

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102


Add 28/08/2015 Market Purchase 616438 1827596Add 04/09/2015 Market Purchase 81037 1908633Add 11/09/2015 Market Purchase 177958 2086591Add 22/01/2016 Market Purchase 23003 2109594Less 05/02/2016 Market Sale -156361 1953233Less 12/02/2016 Market Sale -1763 1951470Add 19/02/2016 Market Purchase 20526 1971996Add 26/02/2016 Market Purchase 26548 1998544Add 04/03/2016 Market Purchase 2415 2000959

Closing Balance as on 31/03/2016 2000959 1.1215 MORGAN STANLEY ASIA (SINGAPORE) PTE.

PAN: AAECM3575FOpening Balance as on 01/04/2015 141748 0.08

Add 10/04/2015 Market Purchase 119988 261736Add 17/04/2015 Market Purchase 70167 331903Add 24/04/2015 Market Purchase 21924 353827Add 01/05/2015 Market Purchase 18002 371829Add 08/05/2015 Market Purchase 126444 498273Add 15/05/2015 Market Purchase 134570 632843Add 22/05/2015 Market Purchase 62363 695206Add 29/05/2015 Market Purchase 33255 728461Add 12/06/2015 Market Purchase 163977 892438Add 18/06/2015 Market Purchase 179664 1072102Add 19/06/2015 Market Purchase 37104 1109206Add 26/06/2015 Market Purchase 195363 1304569Add 30/06/2015 Market Purchase 77854 1382423Add 03/07/2015 Market Purchase 104982 1487405Add 24/07/2015 Market Purchase 57830 1545235Add 31/07/2015 Market Purchase 14519 1559754Add 14/08/2015 Market Purchase 161128 1720882Add 21/08/2015 Market Purchase 139100 1859982Add 04/09/2015 Market Purchase 27638 1887620Add 09/10/2015 Market Purchase 12661 1900281Add 06/11/2015 Market Purchase 9293 1909574Add 25/12/2015 Market Purchase 1689 1911263Add 31/12/2015 Market Purchase 8790 1920053Add 01/01/2016 Market Purchase 1434 1921487Add 08/01/2016 Market Purchase 1032 1922519Add 25/03/2016 Market Purchase 1584 1924103

Closing Balance as on 31/03/2016 1924103 1.0716 MUKUL AGRAWAL

PAN: AAFPA4859GOpening Balance as on 01/04/2015 1251155 0.70

Add 26/06/2015 Market Purchase 1200000 2451155Less 10/07/2015 Market Sale -1200000 1251155Add 25/09/2015 Market Purchase 1200000 2451155

Closing Balance as on 31/03/2016 2451155 1.3717 PLAZA AGENCIES (P) LTD

PAN: AACCP0589QOpening Balance as on 01/04/2015 20000 0.01

Add 16/10/2015 Market Purchase 278059 298059Less 23/10/2015 Market Sale -198059 100000


Sl.No.

NAME


Increase /Decrease


during the year

No. ofShares


Company

No. ofShares

No. ofShares

% of totalShares of

theCompany

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103


Add 30/10/2015 Market Purchase 99834 199834Add 13/11/2015 Market Purchase 44352 244186Add 20/11/2015 Market Purchase 468 244654Add 27/11/2015 Market Purchase 71476 316130Less 11/12/2015 Market Sale -116130 200000Add 18/12/2015 Market Purchase 375305 575305Less 25/12/2015 Market Sale -176650 398655Add 31/12/2015 Market Purchase 276047 674702Add 01/01/2016 Market Purchase 71193 745895Add 08/01/2016 Market Purchase 279472 1025367Add 22/01/2016 Market Purchase 975000 2000367Add 29/01/2016 Market Purchase 1000000 3000367Add 05/02/2016 Market Purchase 194725 3195092Add 12/02/2016 Market Purchase 652000 3847092Add 19/02/2016 Market Purchase 12914 3860006Add 26/02/2016 Market Purchase 355 3860361Add 25/03/2016 Market Purchase 40000 3900361

Closing Balance as on 31/03/2016 3900361 2.1818 NEELANCHAL MERCANTILE PVT LTD

PAN: AAACN8842NOpening Balance as on 01/04/2015 2163890 1.21

Add 10/04/2015 Market Purchase 145510 2309400Less 17/04/2015 Market Sale -626457 1682943Add 24/04/2015 Market Purchase 27239 1710182Less 08/05/2015 Market Sale -27239 1682943Add 15/05/2015 Market Purchase 15200 1698143Less 22/05/2015 Market Sale -85000 1613143Less 05/06/2015 Market Sale -15200 1597943Less 31/07/2015 Market Sale -315000 1282943Less 07/08/2015 Market Sale -1071903 211040Less 14/08/2015 Market Sale -56404 154636Less 21/08/2015 Market Sale -154604 32Add 04/09/2015 Market Purchase 154604 154636Less 20/11/2015 Market Sale -112814 41822Less 27/11/2015 Market Sale -41790 32

Closing Balance as on 31/03/2016 32 0.0019 GLOBE CAPITAL MARKET LIMITED

PAN: AAACG4267GOpening Balance as on 01/04/2015 2274587 1.27

Less 03/04/2015 Market Sale -3000 2271587Less 10/04/2015 Market Sale -500370 1771217Add 17/04/2015 Market Purchase 162422 1933639Less 24/04/2015 Market Sale -778997 1154642Add 01/05/2015 Market Purchase 141475 1296117Less 08/05/2015 Market Sale -39935 1256182Add 15/05/2015 Market Purchase 89080 1345262Add 22/05/2015 Market Purchase 207297 1552559Less 29/05/2015 Market Sale -228798 1323761Less 05/06/2015 Market Sale -100897 1222864Less 12/06/2015 Market Sale -227041 995823Less 18/06/2015 Market Sale -295692 700131Add 19/06/2015 Market Purchase 25 700156


Sl.No.

NAME


Increase /Decrease


during the year

No. ofShares


Company

No. ofShares

No. ofShares

% of totalShares of

theCompany

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104


Add 26/06/2015 Market Purchase 25865 726021Less 30/06/2015 Market Sale -40280 685741Less 03/07/2015 Market Sale -15887 669854Add 10/07/2015 Market Purchase 98658 768512Less 17/07/2015 Market Sale -60600 707912Less 24/07/2015 Market Sale -554886 153026Add 31/07/2015 Market Purchase 348296 501322Add 07/08/2015 Market Purchase 426050 927372Add 14/08/2015 Market Purchase 96497 1023869Add 21/08/2015 Market Purchase 18531 1042400Less 28/08/2015 Market Sale -976248 66152Add 04/09/2015 Market Purchase 21611 87763Less 11/09/2015 Market Sale -2057 85706Less 18/09/2015 Market Sale -24396 61310Less 25/09/2015 Market Sale -12000 49310Add 30/09/2015 Market Purchase 27437 76747Less 02/10/2015 Market Sale -15762 60985Less 09/10/2015 Market Sale -22395 38590Add 16/10/2015 Market Purchase 20202 58792Less 23/10/2015 Market Sale -45838 12954Add 30/10/2015 Market Purchase 38126 51080Less 06/11/2015 Market Sale -38069 13011Less 13/11/2015 Market Sale -50 12961Less 20/11/2015 Market Sale -1175 11786Add 27/11/2015 Market Purchase 5030 16816Add 04/12/2015 Market Purchase 55182 71998Add 11/12/2015 Market Purchase 40 72038Less 18/12/2015 Market Sale -60082 11956Less 25/12/2015 Market Sale -1056 10900Less 31/12/2015 Market Sale -1110 9790Less 01/01/2016 Market Sale -40 9750Add 08/01/2016 Market Purchase 124899 134649Less 15/01/2016 Market Sale -75704 58945Less 22/01/2016 Market Sale -7449 51496Less 29/01/2016 Market Sale -200 51296Add 05/02/2016 Market Purchase 50250 101546Less 12/02/2016 Market Sale -71671 29875Less 19/02/2016 Market Sale -11344 18531Less 26/02/2016 Market Sale -7300 11231Add 04/03/2016 Market Purchase 104636 115867Add 11/03/2016 Market Purchase 285078 400945Add 18/03/2016 Market Purchase 240084 641029Less 25/03/2016 Market Sale -500 640529Less 31/03/2016 Market Sale -382801 257728



Sl.No.

NAME


Increase /Decrease


during the year

No. ofShares


Company

No. ofShares

No. ofShares

% of totalShares of

theCompany

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105


(v) Shareholding of Directors and Key Managerial Personnel:

1 RAKESH SHARMA (MD&CEO till 09.09.2015)PAN :ADAPS7794JOpening Balance as on 01/04/2015 1100 0.00

Add 10/04/2015 Market Purchase 4000 5100Add 05/06/2015 ESOP 60000 65100Add 18/09/2015 ESOP 190000 255100Less 23/10/2015 Market Sale -5000 250100Less 06/11/2015 Market Sale -551 249549Less 13/11/2015 Market Sale -4449 245100Less 27/11/2015 Market Sale -2500 242600Less 05/02/2016 Market Sale -7500 235100Less 19/02/2016 Market Sale -1000 234100

Closing Balance as on 31/03/2016 234100 0.132 DODDY LAKSHMINARAYANARAO

PAN :AAIPL9135BOpening Balance as on 01/04/2015 9187 0.01Closing Balance as on 31/03/2016 9187 0.01

3 K R PRADEEPPAN :AALPP7910MOpening Balance as on 01/04/2015 4165285 2.32


4 S G PRABHAKHARANPAN :AAHPP4774FOpening Balance as on 01/04/2015 4004 0.00Closing Balance as on 31/03/2016 4004 0.00

5 S DATTATHREYANPAN :ACGPD9201LOpening Balance as on 01/04/2015 132219 0.07

Less 17/04/2015 Market Sale -6000 126219Less 18/12/2015 Market Sale -221 125998

Closing Balance as on 31/03/2016 125998 0.076 SHANKAR.P.A.

PAN :AHQPS4259JOpening Balance as on 01/04/2015 218 0.00Closing Balance as on 31/03/2016 218 0.00

7 N. MALAYALARAMAMIRTHAMPAN : AKHPM6607NOpening Balance as on 01/04/2015 81628 0.05Closing Balance as on 31/03/2016 81628 0.05

8 PANKAJ VAISHPAN: AABPV3825FOpening Balance as on 01/04/2015 100 0.00Closing Balance as on 31/03/2016 100 0.00

9 PRAKASH P MALLYAPAN: AANPM7346QOpening Balance as on 01/04/2015 100 0.00Closing Balance as on 31/03/2016 100 0.00

10 E. V. SUMITHASRIPAN : ABOPS9618ROpening Balance as on 01/04/2015 0 0.00


11 M. PALANIAPPAN, CFOPAN: AAIPP2176LOpening Balance as on 01/04/2015 14369 0.01

Add 08/05/2015 ESOP 45000 59369Closing Balance as on 31/03/2016 59369 0.03

Sl.No. NAME


Increase /Decrease


No. ofShares

% of totalShares of the

Company

No. ofShares

No. of Shares % of totalShares of the

Company

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V. INDEBTEDNESS:

Since deposits accepted and borrowings taken are in ordinary course of banking business, the disclosure is notapplicable to the Bank.

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A. Remuneration to Managing Director, Whole-time Directors and /or Manager: (Amount in $)

Sl. Particulars of Mr. Rakesh Sharma, Mr. Parthasarathi Mukherjee, TotalNo. Remuneration (MD & CEO till 09.09.2015) (MD&CEO from 25.01.2016)

1 Gross salary

(a) Salary as per provisions contained insection 17(1) of the Income-tax Act, 1961 21,20,000.00 8,90,322.58 30,10,322.58

(b) Value of perquisites u/s 17(2)Income-tax Act, 1961 1,13,06,741.33 1,35,113.44 1,14,41,854.77

(c) Profits in lieu of salary undersection 17(3) Income-tax Act, 1961 – – –

2 Stock Option * – – –

3 Sweat Equity – – –

4 Commission- as % of profit- others, specify… – – –

5 Others: (i) Employers' (i) Employers'Contribution to Contribution toProvident Fund - Provident Fund -2,54,400.00 36,89,381.67 89,032.00 93,240.00 37,82,621.67

(ii) Gas Electricity - (ii) Gas Electricity -45,348.00 200.00

(iii) Entertainment (iii) InsuranceExpenditure - Premium Payment -88,333.00 4,008.00

(iv) Medical Expenditure/Premium - 68,298.00

(v) Insurance PremiumPayment - 33,002.67

(vi) Child EducationReimbursement -5,00,000.00

(vii) Performance Bonus -23,00,000.00

(viii) Gratuity -4,00,000.00

Total (A) 1,71,16,123.00 11,18,676.02 1,82,34,799.02

* During the year, Mr. Parthasarathi Mukherjee, MD & CEO was granted 12,00,000 Options under LVB - ESOS 2010 Scheme on11.02.2016.However, the grant is subject to the approval of RBI.

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107


C. Remuneration to other Directors / Key Managerial Personnel other than MD / MANAGER / WTD: (Amount in $)

B. Remuneration to other Directors:

Sl. No. Particulars of Remuneration Name of Director Total Amount (in$)

1. Independent Directors

• Fee for attending Board/Committee Meetings D.L.N. Rao 13,25,000.00

S. Dattathreyan 11,30,000.00

PA. Shankar 10,70,000.00

Pankaj Vaish 11,00,000.00

Prakash Mallya 18,40,000.00

E V Sumithasri 8,45,000.00

• Commission NIL

• Others, please specify NIL

Total (1) 73,10,000.00

2. Other Non-Executive Directors

• Fee for attending Board/Committee Meetings K. R Pradeep 19,25,000.00

S.G. Prabhakharan 10,40,000.00

N. Malayalaramamirtham 12,60,000.00

• Commission NIL

• Others, please specify NIL

Total (2) 42,25,000.00

Total (B) = (1+2) 1,15,35,000.00

Total Managerial Remuneration (A+B) 2,97,69,799.02

Overall Ceiling as per the Act Lakshmi Vilas Bank Limited is a banking company regulated bythe Reserve Bank of India and as such relevant provisions of theCompanies Act, 2013 are not applicable.

Key Managerial PersonnelSl. Particulars of

M.Palaniappan, N.Ramanathan, TotalNo. RemunerationChief Financial Officer Company Secretary

1 (a) Salary as per provisions contained in 46,36,986.00 15,68,246.98 62,05,232.98section 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) – – –Income-tax Act, 1961

(c) Profits in lieu of salary under – – –section 17(3) Income-tax Act, 1961

2 Stock Option – – –

3 Sweat Equity – – –

4 Commission- as % of profit- others, specify… – – –

5 Others: (i) Employers' 14,75,762.00 (i) Employers' 2,64,328.83 17,40,090.83Contribution to Contribution toProvident Fund - Provident Fund -2,40,000.00 1,31,402.00

(ii) Medical Expenditure/ (ii) Leave FarePremium - 35,762.00 Concession -

20,604.00

(iii) Performance Bonus - (iii) Other Taxable12,00,000.00 Income- 1,04,829.83

(iv) Medical Expenditure/Premium - 7,493.00

Total (C) 61,12,748.00 18,32,575.81 79,45,323.81

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108


VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

TypeSection of

theCompanies

Act

Details ofPenalty /

Punishment/Compoundingfees imposed

BriefDescription

Authority[RD /NCLT/

COURT]

Appeal made,if any

(give Details)

A. COMPANY

Penalty

Punishment

Compounding

B. DIRECTORS

Penalty

Punishment

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

Punishment

Compounding

NIL

NIL

NIL

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109

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LVB ar 2016 Page 73 to 116.p65 07/05/2016, 1:04 PM109

110


Disclosure pursuant to the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014

Note:1 Sitting fees paid to Non-Executive Directors (` 35,000/- per meeting as on 31.03.2016) has not been considered. Apart from

MD&CEO, there is no other Executive/Whole Time Director in the Bank.

Sl.Particulars Disclosure

No.

1. The ratio of remuneration of each director to the medianemployees remuneration of the Company for thefinancial year

2. The percentage increase in remuneration of eachDirector, Chief Financial Officer, Chief Executive officer,Company Secretary in the financial year

3. The percentage increase in the median remunerationof employees in the financial year

4. The number of permanent employees on the rolls of thebank

5. The explanation on the relationship between averageincrease in remuneration and Bank's performance.

6. Comparison of the remuneration of Key ManagerialPersonnel against the performance of the Bank.

7. Variation in the market capitalization of the Bank, priceearnings ratio as at the closing date of the current financialyear and previous financial year and percentage increaseover decrease in the market quotations of the shares ofthe Bank in comparison to the rate at which the Bankcame out with the last public offer.

8. Average percentile increase already made in the salariesof employees other than the managerial personnel inthe last financial year and its comparison with thepercentile increase in the managerial remuneration andjustification thereof.

9. Comparison of each remuneration of the KMP's(individually) against the performance of the Bank* Part of the year

10. The Key parameters for any variable component ofremuneration availed by Directors

11. Ratio of the remuneration of the highest paid director tothat of the employees who are not directors but receiveremuneration in excess of the highest paid directorduring the year

12. Affirmation that the remuneration is as per theremuneration policy of the Bank

MD & CEO 9.5:111

Mr. Rakesh Sharma, EX-MD & CEO - 113.10%

Mr. Parthasarathi Mukherjee MD & CEO - NIL

Mr. M.Palaniappan, CFO - 1.73%

Mr. N.Ramanathan, CS - NIL

17.43%

3565

The Bank's PAT has grown from $132.29 Crs for FY-15 to $180.24Crs for FY-16, an increase of 36.25% against which the averageincrease in remuneration compares well and this increase is alignedwith the policy of the Bank

For the FY KMP's were paid approx. 1.45% of the Net Profit of theBank

Refer Table No.1

The average percentage increase made in the salaries of totalemployees excluding Managerial Personnel for the FY 2015-16 isaround 20.21% and the average percentage increase in theremuneration of the Managerial Personnel is around 28.70%.

Name & Remuneration PAT ($ in % inDesignation Crores) PAT

Mr.Rakesh Sharma* 17116123.00 0.95%Ex-MD & CEOMr.Parthasarathi 1118676.02 0.06%Mukherjee* MD & CEO

180.24Mr.M.Palaniappan, 6112748.00 0.34%CFOMr.N.Ramanathan, 1832575.81 0.10%Company Secretary

NA

No employee was paid any remuneration in excess of the highestpaid director (MD) during the year.

The remuneration paid is as per the remuneration policy of thebank

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111


Table No. 1

(Ref. Sl. No. 7 above)

Date Issued Capital Paid-up Closing Market EPS PE Ratio MarketCapital Price per share Capitalisation

($) ($) ($) ($ in Crores)

31.03.2015 1806749860 1791666090 101.60 9.16 11.09 1820.33

31.03.2016 1809699860 1794616090 81.15 10.05 8.07 1456.33

Increase / (Decrease) 2950000 2950000 (20.45) 0.89 (3.02) (364.00)

% of Increase / (Decrease) 0.16 0.16 (20.13) 9.72 (27.23) (20.00)

Issue Price of the share at the – – – – – –last Public Offer

Increase in market price as on – – – – – –31.03.2016 as compared toIssue Price of Rights

Increase in % – – – – – –

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112


Employee Stock Option Schemes (ESOSs)Disclosure Pursuant to Regulation 14 of SEBI (Share Based Employee Benefits) Regulation, 2014

Disclosure under Guidance Note on Accounting for Employee Share Based Payments

Employee Stock Options Scheme ('the Scheme')

The Employee Stock Option Scheme (ESOS) of the Bank (known as LVB ESOS 2010) was formulated as per Regulation 5 ofSecurities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines,1999. The scheme was approved by the shareholders through Special Resolution on 04.08.2010 to create, issue, grant / allot upto 50lakhs equity stock options to the eligible present and future employees including Directors of the Bank which entitles the optionholders to subscribe to 1 (one) equity share of the Bank of $10/- each and in aggregate 50,00,000 equity shares of the face value of$10/- at such price, in such manner, during such period and on such terms and conditions and in the manner as may be determinedby the Board.

Stock option activity under the Scheme for the year ended 31st March, 2016 is set out below:

Total for all grants No. of Options Weighted average exercise price ($)

Outstanding at the beginning of the year 545,000 50.93

Granted during the year 1,200,000 55.00

Forfeited during the year 250,000 36.95

Expired during the year - -

Exercised during the year 295,000 38.22

Outstanding at the end of the year 1,200,000 55.00

Exercisable at the end of the year - -

The weighted average share price in respect of options exercised during the year was $ 84.42.

Fair Value Methodology

On applying the fair value based method in Guidance Note on 'Accounting for Employee Share- based Payments' the impact onreported net profit and EPS would be as follows:

31st March, 2016

Net Profit (as reported) ($ in crores) 1,802,357,601

Add: Stock based employee compensation expense included in net income ($) 249,114

Less: Stock based employee compensation expense determined under fair valuebased method (proforma) ($) 614,155

Net Profit (Proforma) ($ in crores) 1,801,992,559

Earnings per share: Basic (in $ )

As reported 10.05

Proforma 10.05

Earnings per share: Diluted (in $)

As reported 10.05

Proforma 10.05

The fair value of the options is estimated on the date of the grant using the Black-Scholes options pricing model, with the followingassumptions:

31st March, 2016

Dividend yield 2.15%

Expected life 4.58 years

Risk free interest rate 7.56%

Volatility 36.16%

Volatility is the measure of the amount by which a price has fluctuated or is expected to fluctuate during a period. The measure ofvolatility used in the Black-Scholes options pricing model is the annualised standard deviation of the continuously compounded rates

Annexure - H

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113


of return on the stock over a period of time. For calculating volatility, the daily volatility of the stock prices on the National StockExchange, over a period prior to the date of grant, corresponding with the expected life of the options has been considered.

The weighted average fair value of options granted during the year ended 31st March, 2016 is $ 48.74.

Diluted EPS

Diluted Earnings Per Share pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standard(AS) 20 'Earnings Per Share' for FY 2015-16 is $10.05 per share.

Scheme Specific 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 -

The Employee Stock Option Scheme (ESOS) of the Bank (known as LVB ESOS 2010) was formulated as per Regulation 5 ofSecurities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines,1999. The scheme was approved by the shareholders through Special Resolution on 04.08.2010 to create, issue, grant / allot upto50 lakhs equity stock options to the eligible present and future employees including Directors of the Bank which entitles the optionholders to subscribe to 1 (one) equity share of the Bank of $10/- each and in aggregate 50,00,000 equity shares of the face value of$10/- at such price, in such manner, during such period and on such terms and conditions and in the manner as may be determinedby the Board.

Sl. No. Particulars Disclosures

1 Date of shareholder's approval 04-08-2010

2 Total number of options approved under ESOS 5,000,000

3 Vesting requirements Options granted under LVB ESOS 2010 would vest not lessthan one year and not more than three years from the date ofgrant of such options

4 Exercise price or pricing formula The exercise price shall be the Market price of the equityshares discounted by such percentage not exceeding 50%as determined by the Compensation Committee of the Board

5 Maximum term of options granted 8 years from the date of grant (3 years of vesting and 5 yearsof exercise period)

6 Source of shares (primary, secondary or combination) Primary

7 Variation in terms of options During the year, the Compensation Committee of the Boardhas adjusted the exercise price of the grants offered withoutany increase in the number of options to the then MD & CEOand CFO on account of post rights issue price adjustment

8 Method used for accounting of ESOS Intrinsic Value method for accounting(Intrinsic or fair value)

9 Fair Value Related Disclosure• Increase in the employee compensation cost • The employee compensation cost would increase

computed at fair value over the cost computed by $ 365,401using intrinsic cost method

• Net Profit, if the employee compensation cost • Net profit, if the employee compensation cost had beenhad been computed at fair value computed at fair value $ 1,801,992,559

• Basic EPS, if the employee compensation cost • Basic EPS, if the employee compensation cost had beenhad been computed at fair value computed at fair value $ 10.05

• Diluted EPS, if the employee compensation cost • Diluted EPS, if the employee compensation cost had beenhad been computed at fair value computed at fair value $ 10.05

10 Weighted average exercise price of the options whose:• exercise price equals market price Nil• exercise price exceeds market price Nil• exercise price is less than market price Weighted average exercise price of the stock options granted

during the year is $ 55.00

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Sl. No. Particulars Disclosures

11 Weighted average fair value of the options whose:• exercise price equals market price Nil• exercise price exceeds market price Nil• exercise price is less than market price Weighted average fair value of the stock options granted

during the year is $ 48.74

ii) Option movement during 2015-16:

Particulars ESOS 2010

Number of options outstanding at the beginning of the year 545,000

Number of options granted during the year 1,200,000

Number of options forfeited during the year 250,000

Number of options expired during the year -

Number of options exercised during the year 295,000

Number of options outstanding at the end of the year 1,200,000

Number of options vested during the year 250,000

Number of shares arising as a result of exercise of options 295,000

Money realized by exercise of options during the year (Rs. lacs) 112.75

Number of options exercisable at the end of the year Nil

Loan repaid by the Trust during the year from exercise price NA

iii) Employees details who were granted the options during the year:

Sr. Particulars Name of Designation Number of ExerciseNo. employee of employee options granted Price

during the year

1 Details of grants to senior managerial personnel Parthasarathi MD & CEO 1,200,000 $ 55Mukherjee

2 Employees who were granted, during any one year, Parthasarathi MD & CEO 1,200,000 $ 55options amounting to 5% or more of the options Mukherjee*granted during the year

3 Identified employees who were granted options, – – – –during any one year, equal or exceeding 1% of theissued capital (excluding outstanding warrants andconversions) of the Bank under the grant

* Pending for RBI Approval

iv) Accounting method and assumptions:

The fair value of the options is estimated on the date of the grant using the Black-Scholes options pricing model, with the followingassumptions:

As of 31st March, 2016

Dividend yield 2.15%

Expected life 4.58 years

Risk free interest rate 7.56%

Volatility 36.16%

Price of the underlying share in market at the time of the option grant.($) 92.95

Volatility is the measure of the amount by which a price has fluctuated or is expected to fluctuate during a period. The measure ofvolatility used in the Black-Scholes options pricing model is the annualized standard deviation of the continuously compounded ratesof return on the stock over a period of time. For calculating volatility, the daily volatility of the stock prices on the National StockExchange, over a period prior to the date of grant, corresponding with the expected life of the options has been considered.

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Form No. MR-3

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31st March 2016

[Pursuant to Section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To

The MembersLakshmi Vilas Bank LimitedKarur

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

Based on my verification of the bank's books, papers, minute books, forms and returns filed and other records maintained by theBank and also the information provided by the Bank, its officers, agents and authorized representatives during the conduct ofsecretarial audit, I hereby report that in my opinion, the Bank has, during the audit period covering the financial year ended on31st March 2016 complied with the statutory provisions listed hereunder and also that the Bank has proper Board-processes andcompliance-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 filed and other records maintained by the Bank for the financialyear ended on 31st March 2016 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 DirectInvestment, 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 (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines, 1999 / The Securities and Exchange Board of India (Share based Employee Benefits) Regulations 2014;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regardingthe Companies Act and dealing with client, which does not apply to the bank;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, which is not applicable as nodelisting was during the year; and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998, which is not applicable to thecompany as no buyback was 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;

Annexure - I

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(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) Foreign Exchange Management Act 1999 and Rules and Regulations made there under;

(h) Securitization and Reconstruction of Financial Assets and Enforcement of security Interest (SARFAESI) Act 2002;

(i) Prevention of Money Laundering Act (PMLA) 2002;

(j) Prevention of Money Laundering (Maintenance of Records, etc) Rules 2005;

(k) Banking Ombudsman Scheme 2006;

I have also examined compliance with the applicable clauses / Regulations of the following:

(i) Secretarial Standards 1 & 2 issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreements entered into by the bank with National Stock Exchange and BSE Ltd and The Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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-ExecutiveDirectors and Independent Directors. The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act / RBI directives.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent adequatelyin advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before themeeting and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members' views arecaptured and recorded as part of the minutes.

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

I further report that during the audit period the Bank has raised $ 140.10 Crores through issue of Tier II Basel III compliant bonds(Series IX) for augmenting Tier II Capital and for strengthening its capital adequacy.

K. MUTHUSAMYPlace : Coimbatore Practicing Company SecretaryDate : 27.04.2016 M No: F 5865; CP: 3176

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INTEGRATED TREASURY25/31, Aban House, 4th Floor, Saibaba Marg,

Kalaghoda, Fort Mumbai - 400 023Maharashtra

E-mail: [email protected]: 022- 22883149, 22040746, 22883261

Fax No. : 022 - 22822812

Our Swift Code - LAVBINBB

BENGALURU

No. 93, 2nd Floor, T.K.N. Mansion, K.H. Road(Double Road), Opp. to KSRTC Head Office,Bengaluru - 560 027.KarnatakaEmail : [email protected] : 080 - 22631300, 22631303

COIMBATORE

LVB Platinum Jubilee Building,68, Oppanakara Street, IInd Floor,Coimbatore - 641 001Tamil NaduEmail : [email protected] : 0422 - 2304997, 2301447Fax : 0422 - 2301447

DELHI

Flat No. 406-410,B Block, 4th Floor,21, K.G. Marg,Naurang House,New Delhi-110 001.Email : [email protected] : 011 - 45753401-402, 45753417

HYDERABAD

No. 2B & 2C, Ground Floor, Aditya Trade Centre,Lane Adjacent to Huda Mythrivanam,Ameerpet, Hyderabad - 500 038Andhra PradeshEmail : [email protected] : 040 - 23734333Fax : 040 - 23759211

SALEMS4 SRI NIVASAM ARCADE9/4 Advaitha Ashram Road,First Floor,Opposite to Holy Flower Matric SchoolSwarnapuri, Salem - 636004Tamil NaduEmail: [email protected]: 0427-2441316, 2331416

REGIONAL OFFICESCHENNAI

189, Ist Floor, Anna Salai, Aarthi Chambers,Chennai - 600 006Tamil NaduEmail : [email protected] : 044 - 28411711, 42085163Fax : 044 - 28547529

MUMBAI

Sterling Centre, 2nd Floor,Andheri-Kurla Road, Chakala,Mumbai - 400 093MaharashtraEmail : [email protected] : 022 - 28270236, 28270237Fax : 022 - 28270234

MADURAI

D.No. 49A, Bharathi Ula Road,Race Course, Thallakulam,Madurai - 625 002.Tamil NaduEmail : [email protected] : 0452 - 2545905 - 2545924

KARUR2nd Floor, Registered office (South wing),Salem Road, Kathaparai, Karur - 639006Tamil NaduEmail: [email protected] 04324 222046,222048Fax: 04324 223644

VIJAYAWADAD No: 31-23-1A, Besides BSNL Bhavan,Chuttu Gunta, Eluru Road,Vijayawada -520 004.Krishna Dist.Email: [email protected]: 0866-2440020

PUDUCHERRYNo:378 Mahatma Gandhi Road,Canel Street Corner,Puducherry-605001Email: [email protected]: 0413-2226431,432,433

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USA & CANADA

1 Standard Chartered Bank, New York.

2 Mashreq Bank, New York

3 Bank of New York Mellon.

4 Royal Bank of Canada, Toronto, Canada.

EUROPE

5 Standard Chartered Bank, Frankfurt, Germany.

6 Commerz Bank AG, Germany.

7 Deutsche Bank, Germany.

8 Intesa Sanpaolo Spa, Milan, Italy.

9 Zurcher Kantonalbank, Zurich, Switzerland.

10 Fortis Bank, Brussels.

11 Danske Bank, Copenhagen, Denmark.

12 Svenska Handlesbanken, Stockholm, Sweden.

ASIA PACIFIC

13 Standard Chartered Bank, Tokyo, Japan.

14 National Australia Bank, Melbourne, Australia.

15 Korea Exchange Bank, Beijing & Seoul

16 Woori Bank, Dhaka.

MIDDLE EAST REGION

17 Habib Bank AG, UAE

18 Doha Bank, Qatar

19 Standard Chartered Bank, Dubai.

20 Mashreq Bank Psc., Dubai.

21 Commercial Bank of Dubai, Dubai.

LIST OF OVERSEAS CORRESPONDENTS / AGENCY BANKS

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ANDHRA PRADESH

1 Adoni

2 Amalapuram

3 Anakapalle

4 Ananthapur

5 Ananthavarappadu

6 Angalakuduru

7 Bhavanipuram (Vijayawada)

8 Bhimavaram

9 C.Kothapeta

10 Chittoor

11 Doddavaram

12 Dommaranandyala

13 Dondapadu

14 Eluru

15 Gajuwaka - Hyderabad

16 Gopalpatnam

17 Governorpet (Vijayawada)

18 Guntur

19 Kadapa

20 Kadiam

21 Kakinada

22 Krishnapatnam

23 Kurnool

24 Lakshmipuram - Guntur(II)

25 Lam

26 Mangalagiri

27 Marichetlapalem

28 MVP Colony (Vishakapatnam)

29 Nandigama

30 Nandiyal

31 Narasaraopet

32 Nellore

33 Ongole

34 Ponnur

35 Prodattur

36 Rajamundri

37 Srikakulam

38 Tadepalli

39 Tanuku

40 Tenali

41 Thimmapuram

42 Thurputallu

43 Tirupathi

44 Vijayawada

45 Vijayawada (Ring Road)

46 Vinukonda

47 Vishakapatnam-town

48 Vizianagaram

CHATTISGARH

49 Dhamtari

50 Mahasamund

51 Raipur

52 Durg

GUJARAT

53 Ahmedabad54 Anand55 Gandhidham56 Gandhinagar57 Jamnagar58 Navasari59 Rajkot60 Surat I61 Surat II62 Vadodara63 Bharuch (Mumbai)64 Vapi

HARYANA

65 Faridabad66 Gurgaon67 Karnal68 Panipat

JHARKHAND

69 Jamshedpur70 Ranchi

KARNATAKA

71 Ballari72 Banashankari (Bengaluru)73 Bangarpet74 Basavanagudi (Bengaluru)75 Basaveshwaranagar76 Belagavi77 Bengalauru-main78 Bommanahalli (Bengaluru)79 BTM Layout (Bengaluru)80 Cantonment (Bengaluru)81 Channarayapatna82 Chitradurga83 City market (Bengaluru)84 Davangere85 Devanahalli (Bengaluru)86 Gadag87 Halasuru (Bengaluru)88 Hassan

89 Honnasandra90 Hosapete91 HSR Layout (Bengaluru)92 Hubballi93 Jalahalli (Bengaluru)94 Jayanagar (Bengaluru)95 Kalaburagi96 Kengeri (Bengaluru)97 Kollegal98 Koramangala (Bengaluru)99 Malleshwaram (Bengaluru)

100 Mandya101 Mangaluru102 Mudbidri103 Mysuru104 Puttur105 Raichur106 Rajarajeshwari nagar (Bengaluru)107 Ranebennur108 RT Nagar (Bengaluru)109 Shivamogga110 Sirsi111 Thippasandra (Bengaluru)112 Tumakuru113 Ullaibettu114 Vijayanagar (Mysuru)115 Vishveswarapura (Bengaluru)116 Yadgir117 Yelahanka (Bengaluru)

KERALA

118 Alappuzha119 Calicut120 Chalakudy121 Ernakulam (Cochin)122 Guruvayoor123 Kollam124 Kottayam125 Palakkad126 Perumbavoor127 Thiruvananthapuram128 Thrissur129 Vavvakavu

MADHYA PRADESH

130 Ashta131 Bhopal132 Indore133 Jabalpur

MAHARASHTRA

134 Andheri (Mumbai)135 Boisar136 Borivili (Mumbai)137 Chembur (Mumbai)

BRANCH OFFICES

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138 Fort (Mumbai)139 Ghatkopar (Mumbai)140 Kalyan (Mumbai)141 Kharghar (Mumbai)142 Kolhapur143 Malad(west) (Mumbai)144 Matunga (Mumbai)145 Nagpur146 Nasik147 Pune148 Thane149 Vasai150 Vashi (Mumbai)151 Panvel152 Mulund(West)

NEW DELHI

153 Jamukoli154 Janpath (New Delhi)155 Kalkaji (New Delhi)156 Karolbagh (New Delhi)157 Krishnanagar (New Delhi)158 Mahavir Nagar (New Delhi)159 Rohini (New Delhi)160 Shalimar Bagh (New Delhi)

ODISHA

161 Bhubaneshwar162 Cuttack163 Majhihara

PUDUCHERRY

164 Ambagarathur165 Karaikal166 Puducherry167 Lawspet

RAJASTHAN

168 Bhilwara169 Jaipur

TAMILNADU

170 Adambakkam (Chennai)171 Adayar (Chennai)172 Alathur173 Ambattur (Chennai)174 Ambilikkai175 Ambur176 Ammapet (Salem)177 Anbil178 Anna Nagar (Chennai)179 Anna Nagar (Madurai)180 Annur181 Arakandanallur182 Arantangi183 Arasappapillaipatti

184 Ariyalur185 Arni186 Aruppukkottai187 Attur188 Avalpoondurai189 Ayothiyapattinam190 Balasamudram191 Bargur192 Batlagundu193 Bhuvanagiri194 Bodinayakanur195 Bye Pass Road(Madurai II)196 C.K.Street (Salem)197 C.Pudupatti198 Cantonment (Trichy)199 Cathedral Road (Chennai)200 Chengalpattu201 Chennai Main202 Chinna Salem203 Chinnadharapuram204 Chinthalavadi205 Chittode206 Chrompet (Chennai)207 Coimbatore Main208 Cuddalore209 Cumbum210 Dharapuram211 Dharmapuri212 Dindigul213 Eachanari (Coimbatore)214 Erode215 Ganapathy (Coimbatore)216 Gandhigramam217 Gandhipuram (Coimbatore)218 G.N.Street (Chennai)219 Gingee220 Gobichettipalayam221 Gopalpatti222 Guduvancheri (Chennai)223 Gugai (Salem)224 Hosur225 Idayakottai226 Iyyampalayam227 J.Veeranam228 Jalakandapuram229 Jegadabi230 K.K.Nagar (Chennai)231 K.Vadamadurai (Coimbatore)232 Kachirapalyam233 Kadalangudi234 Kadambuliyur235 Kalangani236 Kallakurichi237 Kallalangudy238 Kambarasampettai239 Kancheepuram240 Kandili

241 Kangayam242 Kanjampatti243 Kanmai Soorangudi244 Karaikudi245 Karanodai246 Karur Main (Karur)247 KarurWest (Karur)248 Kathaparai (Karur)249 Kattugudalur250 Kattuputhur251 Kavaraipettai (Chennai)252 Kaveripattinam253 KK Pudur (Coimbatore)254 Kodambakkam (Chennai)255 Kolappakam (Chennai)256 Kondalampatti (Salem)257 Kondamanaickenpatty258 Kondikulam259 Kottivakkam (Chennai)260 Koundampalayam (Coimbatore)261 Kovaipudur (Coimbatore)262 Kovilpatti263 Krishnagiri264 Kulithalai265 Kumbakonam266 Kuniyur267 Kurumbapatti268 Lakkapuram269 Lalgudi270 M.N.Palayam271 M.Puthur272 Madipakkam (Chennai)273 Madukkur north274 Madurai Main275 Mahadhanapuram276 Manamedu277 Mangarai278 Mannargudi279 Marandahalli280 Markkampatti281 Mathur282 Mayiladuthurai283 Mecheri284 Melur285 Mettupalayam286 Mettur Dam287 Michealpatti288 Mogappair(Chennai)289 Mohanur290 Moolangudi291 Moolapalayam(Erode)292 Moulivakkam(Chennai)293 Mount Road (Chennai)294 Mudhugampatti295 Muthugapatti296 Muthupet297 Muthur

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298 Mylambadi299 Mylapore (Chennai)300 Nagapattinam301 Nagercoil302 Naicker New Street (Madurai)303 Namakkal304 Nathakadaiyur305 Nathamedu306 Nedumpuli307 Nerinjipettai308 Neyveli309 Nidur310 Nungambakkam (Chennai)311 Oddanchatram312 Olapalayam313 Othakadai(Madurai)314 P.Ayeepalayam315 Palacode316 Palani317 Palayamkottai318 Pallipalayam319 Panruti320 Papanad321 Papanasam322 Pattukottai323 Pennagaram324 Perambalur325 Perambur(Chennai)326 Peravurani327 Periyakulam328 Perungalathur(Chennai)329 Podakudy330 Pollachi331 Pudukkottai332 Pugalur333 Puliyakulam(Coimbatore)334 Punavasal East335 Purasawalkam (Chennai)336 R.Pudupatti337 R.S.Puram (Coimbatore)338 Rajapalayam339 Rajendram340 Ramanathapuram341 Ramanathapuram (Coimbatore)342 Ramapuram(Chennai)343 Rasipuram344 Rayakotta345 Royapuram(chennai)346 Saidapet(Chennai)347 Salem Town348 Sambankulam349 Sankarapuram350 Sankari351 Sathyamangalam352 Sattur353 Seevalaperi (Satellite Branch)354 Selaiyur(Chennai)

355 Sentharapatti356 Shevapet (Salem)357 Siddhapudur(Coimbatore)358 Sikkal359 Sindalapatti360 Sirumayangudi361 Sivakasi362 South Masi Street(Madurai)363 Sriperumpudur(Chennai)364 Srirangam(Trichy)365 Srivilliputhur366 Sundarapandiam367 Swarnapuri (Salem)368 T.Nagar (Chennai)369 Tanjore370 Tenkasi371 Thallakulam(Madurai)372 Thayanur373 Theni374 Thillainagar (Trichy)375 Thimmanandal376 Thindal377 Thirukattupalli378 Thirumangalam379 Thiruvaiyaru380 Thiruvallur (Chennai)381 Thiruvarur382 Thiruvidaikazhi383 Thittagudi384 Thokkavadi385 Thottiyam386 Tindivanam387 Tiruchengode388 Tirukadaiyur389 Tirukoilur390 Tirunelveli Town391 Tirupur392 Tiruthuraipoondi393 Tiruvannamalai394 Trichy(Main)395 Triplicane (Chennai)396 Turaiyur397 Tuticorin398 Udayamarthandapuram399 Udumalpet400 Ulipuram401 Unjalur402 Upplipalayam (Coimbatore)403 Uranganpatti404 Uttamarkoil(Trichy)405 Vadavalli(Coimbatore)406 Vadugapalayam407 Valasaravakkam (Chennai)408 Velacherry (Chennai)409 Vellakoil410 Velliyanai411 Vellore(NA)

412 Velur (Namakkal)

413 Vengaivasal (Chennai)

414 Vengamedu (Karur)

415 Venjuvancheri (Chennai)

416 Venkatakrishnapuram

417 Vettavalam

418 Vilangudi

419 Villapuram (Madurai)

420 Villivakkam (Chennai)

421 Villupuram

422 Virudhachalam

423 Virudhunagar

424 West Mambalam (Chennai)

425 West Tambaram (Chennai)

426 Yethapur

TELANGANA

427 A.S Rao Nagar (Hyderabad)

428 Adilabad

429 Ameerpet (Hyderabad)

430 Asifabad

431 Banjara Hills (Hyderabad)

432 Boduppal

433 Habsiguda (Hyderabad)

434 Hanumakonda

435 Hyderabad Main

436 Jadcherla

437 Karim Nagar

438 Khammam

439 Kompally

440 Kothapeta (Hyderabad)

441 Kukatpally (Hyderabad)

442 Madhapur (Hyderabad)

443 Malkajgiri (Hyderabad)

444 Mehdipatnam (Hyderabad)

445 Miryalguda

446 Nalgonda

447 Nizamabad

448 Peruvancha

449 Ponnal

450 Punjagutta (Hyderabad)

451 Ramachandrapuram

452 Secunderabad (Hyderabad)

453 Suryapet

454 Warangal

455 West Maredpally

UTTAR PRADESH

456 Ghaziabad

457 Noida

WEST BENGAL

458 Garia

459 Kolkata - New Alipur

460 Kolkata

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A DECADE OF PROGRESS(Amount given in Lacs)

Year 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Paid-up Capital 4780.51 4877.22 4877.62 9750.87 9752.58 9752.58 9754.07 9756.07 17916.67 17946.16

Reserve &

Surplus 34828.36 36890.54 40493.97 64148.86 79490.91 86083.93 91680.38 95603.85 137697.60 158413.25

Deposits 501987.23 561848.82 736090.00 907537.77 1114951.07 1411414.00 1561897.79 1857288.21 2196421.22 2543096.15

Advances 361270.30 385878.75 524583.00 627749.52 809442.28 1018867.97 1170279.56 1288918.96 1635201.90 1964373.90

Investments 130930.24 169367.77 186306.00 298322.23 351885.03 439511.80 432454.68 568867.76 605115.62 654540.46

Net Profit 1758.43 2526.91 5030.00 3066.80 10113.68 10702.22 9157.45 5965.55 13228.59 18023.58

Number of

Branches 236 239 251 271 274 290 291 361 400 460

Staff Position 1926 2078 2433 2655 2626 3054 3149 3292 3459 3565

Earning Per

Share ($) 3.60 5.18 10.31 4.95 10.37 10.97 9.39 6.11 9.16 10.05

Book Value ($) 81.18 85.63 93.02 75.79 83.23 90.14 92.88 100.16 82.48 88.70

Market Price ($) 77.70 97.95 63.50 79.21 98.00 85.05 81.35 71.15 101.60 81.15

Dividend Per

Share ($) 0.70 1.50 2.50 0.60 2.50 3.50 3.00 1.00 2.00 3.00

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Inauguration of our Villivakkam Branch, Chennai.

"Best bank award for Managing IT Infrastructure among small banks" from IDRBT.

Relief Materials being distributed by LVB during the recent Chennai Floods.

MD & CEO with the new incumbents of LVB at Manipal Academy of Banking, Bangalore.

Shri K. BABUJIRBI Nominee

BOARD OF DIRECTORS

Shri PARTHASARATHI MUKHERJEE Managing Director & CEO

Shri D.L.N. RAO Shri K.R. PRADEEP

Shri S.G. PRABHAKHARAN Shri S. DATTATHREYAN Shri P.A. SHANKAR

Shri N. MALAYALARAMAMIRTHAM Shri PANKAJ VAISH Shri PRAKASH P MALLYA

Smt. E.V. SUMITHASRI Shri SUVENDU PATIRBI Nominee

CIN L65110TN1926PLC001377

Registered Office: Salem Road, Kathaparai, Karur - 639 006.Corporate Office: "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

THE LAKSHMI VILAS BANK LIMITED

Notice is hereby given that the 89th Annual General Meeting of the Members of The Lakshmi Vilas Bank Limited ("Bank") will be heldat the Registered Office of the Bank, Salem Road, Kathaparai, Karur-639 006 on Friday, 10th June 2016 at 10.00 a.m. to transact thefollowing business.

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Financial Statements of the bank for the year ended 31st March, 2016 and theReport of the Directors' and the Auditors' thereon.

2. To declare dividend.

3. To appoint a Director in the place of Shri. N. Malayalaramamirtham, (DIN 06846587) who retires by rotation and being eligible,offers himself for re-appointment.

4. To appoint auditors and if thought fit to pass with or without modification(s) the following resolution as an ORDINARYRESOLUTION.

"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, includingstatutory modification(s) or re-enactment thereof for the time being in force and the rules, circulars, guidelines issued by theReserve Bank of India as applicable, M/s.R.K. Kumar & Co, Chartered Accountants, Chennai, Firm Registration No.001595Sbe and are hereby appointed as Statutory Auditors of the Bank to hold office from the conclusion of this meeting till theconclusion of the next Annual General Meeting, subject to the approval of the Reserve Bank of India on such remuneration andreimbursement of out-of-pocket expenses, if any, as may be fixed by the Board of Directors on the recommendation of the AuditCommittee of the Board."

SPECIAL BUSINESS

5. To consider and if thought fit, to pass with or without modification(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 StatutoryAuditors, the Branch Auditors who are qualified to act as Auditors, including Statutory Auditors pursuant to the provisions ofSection 143(8) and other applicable provisions of the Companies Act, 2013 for the purpose of audit of the Branches of the Bankand to decide the Branch Offices to be audited by such Branch Auditors and to fix their remuneration and reimbursement of outof pocket expenses incurred, if any in connection with the Audit, based on the recommendation of the Audit Committee of theBoard."

6. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARY RESOLUTION.

"RESOLVED THAT consent of members of bank be and is hereby accorded for the appointment of Shri. Parthasarathi Mukherjee(DIN. 02446180) as the Managing Director & CEO (MD & CEO) of the Bank and as approved by the Reserve Bank of Indiaunder Section 35B of the Banking Regulation Act, 1949 for a period of 3 years from the date of his taking charge on the termsand conditions as set out in the explanatory statement annexed to this notice, who will be a director of the bank not liable toretirement by rotation.

RESOLVED FURTHER THAT the consent of the members of the bank be and is hereby accorded to the Board of Directors torevise the remuneration and perquisite payable to Shri. Parthasarathi Mukherjee (DIN 02446180) as MD & CEO of the Bankfrom time to time subject to approval, as may be required from the Reserve Bank of India in terms of the provisions of Section35B of the Banking Regulation Act, 1949.

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7. To consider and if thought fit, to pass the following resolution as a SPECIAL RESOLUTION:

"RESOLVED THAT pursuant to the provisions of Section 14 and other applicable provisions, if any, of the Companies Act, 2013and Rules made thereunder (including any statutory modification(s) thereto or re-enactment thereof, for the time being in force),a new set of Articles of Association, placed before the Members, be and is hereby adopted and substituted in place of theexisting Articles of Association of the Bank, subject to the approval of the Reserve Bank of India as may be required.

RESOLVED FURTHER THAT the Board of Directors of the Bank be and is hereby authorised to perform and execute all suchacts, deeds, matters and things, as may be necessary, proper or expedient to give effect to this resolution and for the mattersconnected herewith or incidental thereto."

8. To consider and if thought fit, to pass with or without modification(s) the following resolutions as an ORDINARY RESOLUTION:

"RESOLVED THAT pursuant to Sections 61(1)(a) of the Companies Act, 2013, and the relevant rules formed thereunder andsubject to all other applicable provisions, if any, the Authorised Share Capital of the Bank be increased from $ 300,00,00,000/-(Rupees Three Hundred Crores Only) divided into 30,00,00,000 equity shares of $ 10/- each, to $ 500,00,00,000/- (RupeesFive Hundred Crores Only) divided into 50,00,00,000 equity shares of $ 10/- each, ranking pari-passu in all respect with theexisting Equity Shares of the Bank."

9. To consider and if thought fit, to pass with or without modification(s) the following resolution as an ORDINARY RESOLUTION:

"RESOLVED THAT the existing Clause 6 of the Memorandum of Association of the Bank be amended and shall stand substitutedas 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 $ 500,00,00,000/- (Rupees Five HundredCrores Only) divided into 50,00,00,000 equity shares of $ 10/- each. The authorized capital can be increased, reduced,sub-divided or modified by the Board of Directors with the consent of the General Body.

10. To consider and if thought fit, to pass with or without modification(s), the following resolution as a SPECIAL RESOLUTION.

"RESOLVED THAT pursuant to the provisions of Section 42, 62(1)(c), 71 and other applicable provisions, if any, of the CompaniesAct, 2013 (the Act) read with the Companies (Share Capital and Debentures) Rules, 2014, Companies (Prospectus and Allotmentof Securities) Rules, 2014 and such other rules as may be issued from time to time (including any statutory modification(s) orre-enactment thereof, for the time being in force), and in accordance with the provisions of Memorandum & Articles of Associationof the Bank, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("SEBI LODR Regulations"), theprovisions of Securities and Exchange Board of India ("SEBI") Act 1999, as amended from time to time, Securities and ExchangeBoard of India (Issue of Capital & Disclosure Requirements) Regulations, 2009, ("SEBI ICDR Regulations"), as amended,Foreign Exchange Management Act ("FEMA") 1999, as amended from time to time, Master Directions on Issue and Pricing ofShares by Private Sector Banks, 2016 issued by the Reserve Bank of India (RBI) and any other statutory guidelines / regulations,if any, prescribed by the SEBI, RBI, the Stock Exchanges, the Government of India ("GOI") or any other relevant authority fromtime to time, to the extent applicable, and subject to such approvals, consents, permissions, and sanctions as may be requiredand subject to such conditions and modifications as may be prescribed while granting such approvals, consents, permissionsand sanctions and which may be agreed to by the Board of Directors of the Bank (hereinafter referred to as "Board" which termshall be deemed to include any Committee(s) constituted / to be constituted by the Board to exercise its powers including thepowers conferred by this Resolution), the consent of the Bank be and is hereby accorded to the Board to issue, offer and allot,up to 4,25,00,000 Equity Shares of $ 10/- ("Equity Shares") each or hybrid instruments / securities ("Securities") resulting in, upto 4,25,00,000 Equity shares of $ 10/- each (including the provisions for reservation on firm and /or competitive basis, of suchpart of issue and for such categories of persons as may be permitted) in the course of one or more public or private offerings indomestic and / or international market(s), either in the form of Qualified Institutional Placement (QIPs) to Qualified InstitutionalBuyers (QIBs) and / or Equity Shares through Depository Receipts, including in the form of Global Depository Receipts (GDRs)and / or American Depository Receipts (ADRs) to eligible investors (whether residents and/or non-residents and/or strategicinvestors and / or institutions / banks and / or incorporated bodies and / or individuals and/or trustees and/ or stabilizationagents and/or mutual funds and / or venture capital funds, and/or Indian and / or multi-lateral financial institutions or otherwise,and irrespective of whether or not such investors are members of the Bank, through prospectus and/or letter of offer and / orplacement document or circular and /or on public and / or private, such issue and allotment to be made at such time(s) in oneor more tranches, by way of cash at such price or prices, in such manner, on such terms and conditions as the Board, may in itsabsolute discretion, decide at the time of issue of the aforesaid Securities.

RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby also authorised todetermine the form, terms and timing of the issue(s), including the class of investors to whom the Equity Shares / Securities are

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to be allotted, number of Equity Shares / Securities to be allotted in each tranche, issue price, face value, premium amount inissue/conversion/exercise/redemption, rate of interest, redemption period, listings on one or more stock exchanges in India orabroad as the Board may in its absolute discretion deems fit and to make and accept any modifications in the proposals as maybe required by the authorities involved in such issue(s) in India and/or abroad, to do all acts, deeds, matters and things and tosettle any questions or difficulties that may arise in regard to the issue(s).

RESOLVED FURTHER THAT in case of a qualified institutional placement pursuant to Chapter VIII of the SEBI ICDR Regulations,the allotment of Securities (or any combination of the Securities as decided by the Board) shall only be to Qualified InstitutionalBuyers within the meaning of Chapter VIII of the ICDR Regulations, such Equity Shares / Securities shall be fully paid-up andthe allotment of such Equity Shares / Securities shall be completed within 12 months from the date of this resolution at suchprice being not less than the price determined in accordance with the pricing formula provided under Chapter VIII of the ICDRRegulations and the Board may, in accordance with applicable law, also offer a discount of not more than 5% or such percentageas permitted under applicable law on the price calculated in accordance with the pricing formula provided under the ICDRRegulations, as amended from time to time.

RESOLVED FURTHER THAT in case of QIP issue the relevant date for determination of the floor price of the Equity Shares /Securities to be issued shall be -

I. In case of allotment of equity shares, the date of meeting in which the Board decides to open the proposed issue.

II. in case of allotment of eligible convertible securities, either the date of the meeting in which the Board decides to open theissue of such convertible securities or the date on which the holders of such convertible securities become entitled to applyfor the equity shares, as may be determined by the Board.

RESOLVED FURTHER THAT without prejudice to the generality of the above, the aforesaid issue of the Equity Shares /Securities may have all or any terms or conditions or combination of terms in accordance with applicable regulations, prevalentmarket practices etc.

RESOLVED FURTHER THAT the Board may enter into any arrangement with any agencies or bodies for the issue of depositoryreceipts represented by underlying equity shares in the share capital of the Bank with such features and attributes as areprevalent in international / domestic capital markets for instruments of this nature and to provide for the tradability and freetransferability thereof in accordance with market practices as per the domestic and / or international practice or regulations andunder the norms and practices prevalent in the domestic / international capital markets and subject to applicable laws andregulations and the Articles of Association of the Bank.

RESOLVED FURTHER THAT in the event of depository receipts, the pricing shall be determined in compliance with the principlesand provisions set out in the Depository Receipts Scheme, 2014, the Foreign Exchange Management (Transfer or Issue ofSecurities by a person resident outside India) Regulations, 2000 and such other notifications, clarifications, guidelines, rulesand regulations issued by relevant authorities (including any statutory modifications, amendments or re-enactment thereof).

RESOLVED FURTHER THAT in the event the Securities are proposed to be issued as foreign currency convertible bonds,subject to the provisions of the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depository ReceiptsMechanism) Scheme, 1993 including any statutory modifications, re-enactments or amendments from time to time and otherapplicable pricing provisions issued by the Ministry of Finance, the relevant date for the purpose of pricing of the security to beissued pursuant to such issue shall be the date of the meeting in which the Board or duly authorized committee of directorsdecides to open such issue after the date of this Resolution or such other date as may be prescribed under the applicable law.

RESOLVED FURTHER THAT the Board be and is hereby authorised to issue offer and allot such number of Equity Shares asmay be required to be issued and allotted upon conversion of any Securities referred to above and as may be necessary inaccordance with the terms of the offer, subject to the provisions of Memorandum and Articles of Association of the Bank orother applicable legal provisions and shall rank pari passu inter se with the then existing equity shares of the Bank in allrespects including as to dividend.

RESOLVED FURTHER THAT for the purpose of giving effect to the above Resolutions, the Board be and is hereby authorisedon behalf of the Bank, to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary ordesirable, and with power on behalf of the Bank to settle all questions, difficulties or doubts that may arise in this regard in itsabsolute discretion and deem necessary or desirable for such purpose, including without limitation the entering into of marketingand similar agreements and to remunerate the managers, and all other agencies/intermediaries by way of commission, brokerage,fees and the like as may be involved or connected in such offerings of Equity Shares / Securities, finalization of the number andprice of Equity Shares / Securities to be issued in each tranche thereof, form, terms and timing of the issue of Equity Shares /Securities including for each tranche of such issue of Equity Shares / Securities, identification of the investors to whom Equity

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Shares / Securities are to be offered, utilization of the proceeds and other related, incidental or ancillary matters as the Boardmay deem fit at its absolute discretion, to make such other applications to concerned statutory or regulatory authorities, withpower on behalf of the Bank to settle any questions, difficulties or doubts that may arise in regard to any such issue or allotmentas it may in its absolute discretion deem fit.

RESOLVED FURTHER THAT for the purpose of the aforesaid, the Board be and is hereby authorized to settle all questions,difficulties or doubts that may arise in regard to the issue, offer and allotment of Equity Shares / Securities and utilization of theissue proceeds including but without limitation to the creation of such mortgage / hypothecation / charge on the Bank's assetsunder Section 180(1) (a) of the said Act in respect of the aforesaid Equity Shares / Securities either on pari passu basis orotherwise or in the borrowing of loans as it may in its absolute discretion deem fit without being required to seek any furtherconsent or approval of the Members or otherwise to the end and intent that the Members shall be deemed to have given theirapproval thereto expressly by the authority of this resolution.

RESOLVED FURTHER THAT the Board shall have the authority and power to accept any modification in the proposal as maybe required or imposed by the Government of India / Reserve Bank of India / Securities & Exchange Board of India / StockExchanges where the shares of the Bank are listed or such other appropriate authorities at the time of according / granting theirapprovals, consents, permissions and sanctions to issue, allotment and listing thereof and as agreed to by the Board.

RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers herein conferred toany Committee of Directors or any one or more Executives of the Bank."

11. To consider and if thought fit, to pass with or without modification(s), the following resolution as a SPECIAL RESOLUTION:

"RESOLVED THAT pursuant to the provisions of Sections 42, 71 and other applicable provisions, if any, of the Companies Act,2013, as amended, and the rules made thereunder, Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations, 2008, as amended, the applicable provisions of the Banking Regulation Act, 1949, as amended, and the rules,circulars and guidelines issued by Reserve Bank of India ("RBI") from time to time (including any statutory amendment(s) ormodification(s) or re-enactment(s) thereof for the time being in force) and all other relevant provisions of applicable law(s), theprovisions 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 or regulatory authority(ies), the approval ofthe Members of the Bank be and is hereby accorded for borrowing/raising funds in Indian/ foreign currency by issue of debtsecurities including but not limited to non-convertible debentures, bonds (including bonds forming part of Tier I / Tier II capital,secured or unsecured, listed or unlisted, in accordance with and subject to the terms and conditions specified in the Basel IIICapital Regulations prescribed by RBI, long-term infrastructure bonds or such other bonds as may be permitted by RBI fromtime to time) upto $ 200 Crores (Rupees Two Hundred Crores Only) (collectively the "debt securities") by the Bank, in one ormore tranches and/or series, in domestic and /or overseas market, as per the agreed structure permitted by RBI and otherregulatory authorities, to eligible investors on private placement basis during a period of one year from the date of passing ofthis resolution, within the overall borrowing limits of the Bank, as approved by the Members, from time to time.

RESOLVED FURTHER THAT the Board of Directors (hereinafter referred to as "Board") of the Bank or any Committee of theBoard or such other persons as may be authorized by the Board or its Committee, be and are hereby authorized to negotiate,modify and finalize the terms and conditions of the debt securities and sign the relevant documents / agreements in connectionwith the private placement of the debt securities, including without limitation, the private placement offer letter (along with theapplication form), information memorandum, disclosure documents, debenture subscription agreement, debenture trusteeagreement, debenture trust deed and any other documents as may be required, in connection with 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 anyCommittee of Directors or any personnel of the Bank to act on their behalf as they may deem fit and to do all such other acts andthings and to execute all such documents as may be necessary for giving effect to this resolution."

BY ORDER OF THE BOARDFor THE LAKSHMI VILAS BANK LIMITED

Place : Bengaluru N. RAMANATHANDate : 06.05.2016 Company Secretary

ACS No. 28366

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Notes:

1. An Explanatory Statement as required under Section 102 of the Companies Act, 2013, pertaining to the special businesscontained in Item No.5 to 11 above is annexed herewith.

2. The Additional information pursuant to Regulation 36 (3) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirement) Regulations, 2015 in respect of the Director seeking re-election vide Item No.3 are detailed elsewherein the notice. The Director has furnished the requisite declaration for his appointment/re-appointment.

3. All relevant documents referred to in the Notice are open for inspection at the Registered Office of the Bank on all working daysbetween 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 TOATTEND AND VOTE INSTEAD OF HIM/HER. SUCH A PROXY/ PROXIES NEED NOT BE A MEMBER OF THE BANK. APERSON CAN ACT AS PROXY ON BEHALF OF MEMBERS NOT EXCEEDING FIFTY (50) AND HOLDING IN THEAGGREGATE NOT MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE BANK. THE INSTRUMENT OFPROXY IN ORDER TO BE EFFECTIVE, SHOULD BE DEPOSITED AT THE REGISTERED OFFICE OF THE BANK, DULYCOMPLETED AND SIGNED, NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. A PROXYFORM IS SENT HEREWITH. PROXIES SUBMITTED ON BEHALF OF THE COMPANIES, SOCIETIES ETC., MUST BESUPPORTED BY AN APPROPRIATE RESOLUTION / AUTHORITY, AS APPLICABLE.

5. The Register of Members and the Share Transfer Books of the Bank will remain closed from 04.06.2016 to 09.06.2016 (bothdays inclusive).

6. Dividend, if declared, will be paid to those members holding physical shares whose names stand on the Register of Membersof the Bank as on 09.06.2016 and in case of dematerialized shareholders, to those Beneficial owners whose names stand onthe records of the Depositories as at the close of working hours on 03.06.2016, subject to the relevant provisions of CompaniesAct, 2013.

7. In compliance of SEBI direction to all listed companies to maintain all works relating to share registry - both physical andelectronic at single point i.e. either in house or by SEBI Registered "Registrar & Transfer Agent (RTA)", Bank has appointedM/s. Integrated Enterprises (India) Limited, Chennai-600 017 as Share Transfer Agent for both physical and demat segmentswith effect from 30.01.2003.

Address of Share Transfer Agent:M/s Integrated Enterprises (India) LimitedII floor, "Kences Towers", No.1 Ramakrishna Street,North Usman Road, T.Nagar, Chennai - 600 017Ph: 044-28140801/2/3 Fax: 28142479/28143378Email: [email protected]

8. Members are requested to notify any change in their address along with the pin code immediately to Share Transfer Agent andin case their shares are held in demat form; this information should be sent to the concerned Depository Participant.

9. With a view to provide protection against fraudulent encashment of dividend warrants, members holding shares in physical formare requested to provide, if not already provided earlier, their bank account numbers, name and address of the bank andbranch, to Share Transfer Agent, M/s.Integrated Enterprises (India) Limited, Chennai-600 017 to incorporate the said details onthe dividend warrants. Members will appreciate that the bank will not be responsible for any loss arising out of fraudulentencashment of the dividend warrants.

10. Unclaimed Dividends:

a) Shareholders and Beneficial owners who have not so far encashed/claimed the dividends for the last 7 years i.e. from2008-2009 to 2014-2015 have to submit the dividend warrant(s) if any available with them for revalidation to the Registrar& Share Transfer Agent, M/s. Integrated Enterprises (India) Ltd, II Floor, "Kences Towers", No. 1 Ramakrishna Street,North Usman Road, T. Nagar, Chennai - 600 017. Shareholders who have lost the dividend warrants are advised toexecute the indemnity bond and send to the Registrar.

b) In terms of Section 125 of the Companies Act, 2013 the dividend which are unclaimed for a period of seven years have tobe transferred to "Investor Education and Protection Fund" maintained with Central Government and the Shareholders/Beneficial Owners cannot make any claim for the dividends once the unclaimed dividend(s) are transferred to such fund.The details of the unclaimed dividend of the shareholders are uploaded in the website of Investor Education and ProtectionFund as well as the website of the Bank and the shareholders may verify their details from the said websites.

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11. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) byevery participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN totheir Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical formcan submit their PAN details to the Bank or with our Registrar & Transfer Agent, M/s. Integrated Enterprises (India) Ltd, Chennai.

12. Green Initiatives in Corporate Governance - Shareholders who have not registered their email address so far are requested toregister their email address (for demat holders - with their respective DPs and for holders in physical form - with our Registrar& Transfer Agent, M/s. Integrated Enterprises (India) Ltd, Chennai).

13. Electronic copy of the Annual Report for 2015-2016 is being sent to all the members whose email IDs are registered with theirrespective DPs or with our Registrar & Transfer Agent, as stated above for communication purposes unless any member hasrequested for a hard copy of the same. For members who have not registered their email address, physical copies of the AnnualReport for 2015-2016 is being sent in the permitted mode.

14. Electronic copy of the Notice of the 89th 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 theBank/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 Notice of the 89th Annual General Meeting ofthe Bank inter alia indicating the process and manner of e-voting along with Attendance Slip and Proxy Form is being sent in thepermitted mode.

15. Members may also note that the Notice of the 89th Annual General Meeting and the Annual Report for 2015-2016 will also beavailable on the Bank's website www.lvbank.com for their download. The physical copies of the aforesaid documents will alsobe available at the Bank's Registered Office for inspection during normal business hours on working days. Even after registeringfor e-communication, members are entitled to receive such communication in physical form, upon making a request for thesame, by free of cost. For any communication, the shareholders may also send requests to the Bank's investors grievance emailid: [email protected]

16. Voting through electronic means:

In compliance with provisions of Section 108 of the Companies Act, 2013 and the Companies (Management and Administration)Rules, 2014, read with Regulation 44 of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Bank ispleased to provide members holding shares in physical or dematerialized form, facility to exercise their right to vote at the 89thAnnual General Meeting (AGM) by electronic means through 'Remote e-Voting' services provided by Central Depository ServicesLimited (CDSL).

The "cut-off date" for the 'Remote e-Voting' is Friday, 03.06.2016. 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 the89th Annual General Meeting.

17. Voting through Postal Ballot:

The bank is also providing the facility of ballot form to those shareholders, who do not have access to e-voting facility to sendtheir assent or dissent in writing in respect of the resolutions as set out in this Notice. The Ballot form along with the postageprepaid envelope and the instructions are enclosed along with the Annual Report. The last date for receiving the ballot form willbe 09.06.2016 at 5.00 p.m. Ballot forms received after this date shall not be considered.

The Shareholders may opt only for one mode of voting i.e., either by Postal Ballot or through e-voting. In case of shareholderscasting their vote by both postal ballot and e-voting, then only the votes cast through e-voting shall prevail and the votes castthrough postal ballot shall be treated as invalid.

18. In Compliance with the Companies (Management and Administration) Amendment Rules, 2015, the Bank is pleased to offer thefacility for voting through physical ballot at the AGM. The Shareholders, who are eligible to vote as on the "cut-off" date beingFriday, 03.06.2016, but have not exercised their right to vote either through e-voting or through postal ballot shall cast their votesat the AGM through Physical Ballots for all the resolutions set out in the Notice. Shareholders who have exercised their right tovote either through e-voting or through postal ballot may attend the AGM but shall not vote at the AGM.

19. By virtue of clause 31 of the Articles of Association of the bank, no suit or other proceeding by or at the instance of any Memberof the Bank relating to any General Meeting of the Bank, whether Annual General Meeting or Extraordinary General Meeting ormeetings of Board or Committee of Directors, seeking any direction with reference to such meeting or to restrain any proceedingsthereat or the passing of any resolution or the transaction of any business shall be instituted in any Court other than the Courtsin Karur which is the place of residence of the Bank for this purpose by reason of location of its Registered Office.

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20. The bank's shares are traded in demat form in the stock exchanges. For your own safety and other benefits in demat form, theshareholders holding shares in physical form are requested to dematerialize their shares and get the benefits by holding theshares in demat form.

Additional information pursuant to Regulation 36 (3) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of the Directors' seekingre-election.

Item No. 3

Shri.N. Malayalaramamirtham, (DIN. 06846587), age 67 is one of the promoter directors of the Bank. He is a Non-Independent andNon-Executive Director. In this present tenure, he has been associated with the Bank since 07.03.2014. Earlier, he had been aDirector of the Bank from 28.09.1983 to 26.06.1990 and from 26.03.1998 to 18.03.2006. He holds a Bachelor's degree in Commerce.He is the Managing Partner of M/s.Venkateswara Exports, Karur and Partner of M/s. KVN Finance. He has more than 38 years ofexperience in Textile business and has travelled abroad to USA, Europe and participated in International Fairs and Buyer SellerMeets for Business Promotion.

As on March 31, 2016, Shri.N. Malayalaramamirtham was a member of Stakeholders Relationship Committee, ManagementCommittee, Fraud Monitoring Committee and Review Committee on Non-Cooperative Borrowers, Corporate Social ResponsibilityCommittee and he was also the Chairman of Infrastructure Development Committee.

Shri. N. Malayalaramamirtham does not hold any directorship in any other Listed Company as on 31.03.2016. Shri.N.Malayalaramamirtham holds 81628 equity shares in the bank as on 31.03.2016.

He is not related to any other directors in the Bank and none of the directors and Key Managerial Personnel and their relatives otherthan Shri. N. Malayalaramamirtham is concerned or interested in this resolution.

Note on appointment of Statutory Central Auditors:

Item No. 4

M/s. R.K. Kumar & Co, Chartered Accountants Chennai was appointed as the Statutory Central Auditors by the Members at the88th Annual General Meeting held on 03.09.2015 to hold office from the conclusion of the 88th Annual General Meeting till conclusion of the89th Annual General Meeting. In terms of Section 139 of the Companies Act, 2013, the approval is being sought from the members for there-appointment of M/s. R.K. Kumar & Co., Chartered Accountants as Statutory Central Auditors for the Financial Year 2016-17.

The Audit Committee of the Board and the Board of Directors have recommended the appointment of M/s. R.K. Kumar & Co,Chartered Accountants, Chennai, as the Statutory Central Auditors of the bank to audit the accounts for the financial year 2016-17including Tax Audit and also to conduct "Limited Reviews" occurring between ensuing Annual General Meeting and Next AnnualGeneral Meeting. The Bank has sought for an approval from the Reserve Bank of India as per applicable provisions of the BankingRegulation Act, 1949.

Accordingly it is being proposed by the Board to appoint M/s. R.K. Kumar & Co, Chartered Accountants, Chennai, Firm RegistrationNo. 001595S to hold office from the conclusion of this AGM till the conclusion of next AGM as set out in item No.4 of the Notice.

None of the Directors and Key Managerial Personnel and their relatives is in anyway concerned or interested in this resolution.

Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013

Item No. 5

In terms of Section 143(8) of the Companies Act, 2013, the Branch Offices of the Bank have to be audited either by StatutoryAuditors or other qualified Auditors. Bank intends to entrust the Audit of Branch Offices either to the Statutory Auditors or to otherqualified Auditors in consultation with Statutory Auditors on such remuneration and on such terms and conditions as the Boarddeems fit 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 in this resolution.

Item No. 6

Appointment of Shri. Parthasarathi Mukherjee, Managing Director & CEO of the Bank.

The Board of Directors of the Bank at their meeting held on 22.01.2016 took on record the Letter No. DBR.Appt.No. 7973/08.44.001/2015-16 dated 18.12.2015 received from DBR, RBI, Mumbai on the appointment of Managing Director & CEO of the Bank and

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co-opted Shri. Parthasarathi Mukherjee (DIN. 02446180) as Additional Director of the Bank and also appointed him as ManagingDirector & CEO of the Bank for a period of three years from the date of his taking charge i.e. 25.01.2016.

Pursuant to the provisions of section 196 of the Companies Act, 2013, the appointment of the Managing Director and the terms andconditions of such appointment and remuneration payable to him as approved by the Board of Directors and the Reserve Bank ofIndia is placed before the shareholders for their approval.

Abstract of the terms and conditions of appointment as approved by the RBI is as follows:

Abstract of Terms & Conditions of Appointment

S.No Particulars Amount in $

Remuneration

1. Salary $ 48,00,000 per annum

2. Dearness Allowance Not Applicable

3. House Rent Allowance Not Applicable

4. Conveyance Allowance Not Applicable

5. Entertainment Allowance Reimbursement of actual

6. Other Allowances Share/Stock OptionWith prior approval of RBI.Performance BonusAs may be approved by Board, subject to RBI approval.

Perquisites

1. Free Furnished house Free furnished residential accommodation.

2. Free use of bank's car for

- official purpose Bank's Car with chauffeur with fuel at Bank's cost.

- private purpose on compensating the bankwith suitable amount.

3. Provident Fund / Gratuity PF - 10% on salary / pay on contributory basis.Gratuity - 1 month's salary and pay for every completed yearof service - payable on completion of tenure approved by RBI

4. Travelling, Lodging and Halting Allowance As applicable to CMD of Public sector banks.

5. Medical benefits Actual for self and dependent family members for hospitalizedtreatment in India.

6. Other benefits a. Communicative Modes - free useb. Insurance Coverage

– $ 25 Lakh for travel by air / train / road– $ 50 Lakh for life insurance

c. Sitting fees - Not Eligibled. Membership in club - subscription to two service clubse. Child Education: $ 5 Lakhs p.a on aggregate.f. Relocation Expenses: A one-time relocation expense

upto a maximum of $ 10 Lakhs for.

7. Leave Fare Concession Once in a year to any place in India for self and family. Singlereturn fare by the highest available class including incidentals.

Note: Shri. Parthasarathi Mukherjee has been granted 12,00,000 options by the Compensation Committee of the Board on 11.02.2016and the bank has requested approval from Reserve Bank of India, which is awaited.

Memorandum of Interest: None of the Directors of the bank and Key Managerial Personnel of the bank and their relative is interestedor concerned except Shri Parthasarathi Mukherjee has it relate to him.

Item No. 7

The Articles of Association of the Bank currently in force were amended from time to time in accordance with the provisions of theCompanies Act, 1956. With the introduction of the Companies Act, 2013, it is proposed to amend the existing Articles of Associationto make it consistent with the provisions of Companies Act, 2013 including the Rules framed thereunder.

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A copy of the proposed set of new Articles of Association of the Bank would be available for inspection at the Registered Office of theBank during the business hours on any working day, up to the date of the Annual General Meeting and during the Annual GeneralMeeting. The proposed set of new Articles of Association of the Bank would be available for download from the website of the bankwww.lvbank.com up to the date of the Annual General Meeting.

Your Directors recommend passing of the Resolution at Item No. 7 of the Notice, as a Special Resolution.

None of the Directors of the bank and Key Managerial Personnel of the Bank and their relatives are concerned or interested in thepassing of these Resolutions.

Item No. 8 and 9

It is proposed to alter and increase the Authorised Share Capital from $ 300,00,00,000 (Rupees Three Hundred Crores Only)divided into 30,00,00,000 equity shares of $ 10/- each to $ 500,00,00,000 (Rupees Five Hundred Crores Only) divided into 50,00,00,000equity shares of $ 10/ each. Accordingly, Clause 6 of the Memorandum of Association is sought to be amended to reflect theincreased capital.

The Resolutions contained in Item Nos.8 and 9 seek to increase the Authorised Share Capital of the Bank, as aforesaid and to alterthe Memorandum of Association of the Bank, consequent to such increase in the Authorised Share Capital of the Bank.

The Board of Directors recommends the Resolutions set out at Item Nos.8 and 9 for the approval of the members.

None of the Directors of the bank and Key Managerial Personnel of the bank and their relatives are concerned or interested in thepassing of these Resolutions.

Item No. 10

The Bank intends to raise funds for augmenting Tier I capital in line with growth in our Business, expanding business requirementsby issue of securities in the domestic / international markets. The proposed resolution at Item no.10 seeks the enabling authorizationto the Board of Directors of the Bank or any of its Committees, to raise Tier I capital through the issue of Equity Shares in thedomestic and / or international markets in one or more tranches, in such form, on such terms, in such manner, at such price and atsuch time as may be considered appropriate by the Board or any of its Committees, to the various categories of investors. In the bestinterest of the Bank, the above enabling resolution is being proposed to be passed to give adequate flexibility and discretion to theBoard to finalise the terms of the issues.

In case of a qualified institutional placement, the pricing of Equity Shares / Securities as may be issued to the qualified institutionalbuyers, pursuant to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009("ICDR Regulations"), shall be not less than the price determined in accordance with the pricing formula provided under Chapter VIIIof the ICDR Regulations (QIP Floor Price) subject to applicable law, and a discount of not more than 5% (Five Percentage) or suchpercentage as permitted may be offered under ICDR Regulations on the QIP Floor Price, and further the relevant date for pricingshall be the date of the meeting in which the Board decides to open the proposed QIP issue.

In case of a qualified institutional placement, the relevant date for determination of the floor price of the Equity Shares / Securities tobe issued shall be -

I. In case of allotment of equity shares, the date of meeting in which the Board decides to open the proposed issue.

II. in case of allotment of eligible convertible securities, either the date of the meeting in which the Board decides to open the issueof such convertible securities or the date on which the holders of such convertible securities become entitled to apply for theequity shares, as may be determined by the Board.

As per the provisions of Section 62 of the Companies Act, 2013 and such other provisions as may be applicable, the above proposalrequires the approval of the members by way of Special Resolution.

The Board of Directors accordingly recommends the resolution set out at Item No. 10 of the accompanying notice for the approval ofmembers.

The directors or the Key Managerial Personnel or their relatives of the bank may be deemed to be concerned or interested in theresolution to the extent of securities that may be subscribed to by the companies/institutions of which they are directors or members.

Item No. 11

Your Bank has been borrowing funds to meet the capital adequacy norms within the limits approved by you by way of issuance ofvarious debt securities (bonds/ debentures) as permitted by Reserve Bank of India ("RBI") and in accordance with the provisions ofSecurities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008, as amended, and other applicablelaws, from time to time.

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In terms of Sections 42, 71 and other applicable provisions of the Companies Act, 2013 read with Companies (Prospectus andAllotment of Securities) Rules, 2014 and Companies (Share Capital and Debenture) Rules 2014, Bank can make private placementof securities subject to the condition that the proposed offer of securities or invitation to subscribe securities has been previouslyapproved by the Members of the Bank, by a special resolution, for each of the offers or invitations / subscriptions. In case of offer orinvitation for subscription of non-convertible debentures, it shall be sufficient if the Bank passes a special resolution only once in ayear for all the offers or invitation for subscription of such debentures during the year.

Further, considering the attractive features of the revised guidelines issued by RBI on issue of long term bonds / Basel III Tier I / TierII bonds and the fact that these bonds will also assist the Bank in reducing asset-liability mismatches, the Board of Directors hasproposed to obtain the consent of the Members of the Bank for borrowing/ raising funds in Indian / foreign currency by issue of debtsecurities pursuant to the relevant provisions of the applicable circulars or guidelines issued by RBI, upto $ 200 Crores (Rupees TwoHundred Crores Only), secured or unsecured, listed or unlisted, in one or more tranches in domestic and /or overseas market, as perthe structure permitted by RBI and other regulatory authorities, to eligible investors on private placement basis, on such terms andconditions as the Board of Directors or any Committee(s) thereof or such other persons as may be authorized by the Board, fromtime to time, determine and consider proper and appropriate for the Bank. The Resolution under Section 42 of Companies Act, 2013shall be valid for a period of one year from the date of passing of this resolution.

The pricing of the debt securities referred above depends primarily upon the rates prevailing for risk free instruments, rates on othercompeting instruments of similar rating and tenor in the domestic or overseas markets, investor appetite for such instruments andinvestor regulations which enable investments in such instruments. Further, debt securities would be issued for cash either at par orpremium or at discount to the face value depending upon the prevailing market conditions, as permitted under the Laws.

Accordingly, the approval of Members is being sought by way of special resolution as set out at in Item No. 11 of this Notice.

The directors or the Key Managerial Personnel or their relatives of the bank may be deemed to be concerned or interested in theresolution to the extent of securities that may be subscribed to by them or the companies/institutions of which they are directors ormembers.

BY ORDER OF THE BOARDFor THE LAKSHMI VILAS BANK LIMITED

Place : Bengaluru N. RAMANATHANDate : 06.05.2016 Company Secretary

ACS No. 28366

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E – VotingDear Shareholders,

In terms of Sections 107 and 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 formas on 03.06.2016, to exercise their right to vote by electronic means on any or all of the business specified in the accompanyingnotice. The Bank has appointed Mr. K. Muthusamy, Practicing Company Secretary (CP No. 3176) as the scrutinizer for conductingthe e-Voting process in a fair and transparent manner. The Scrutinizer shall within a period not exceeding three (3) working days fromthe conclusion of e-voting period unblock the votes in the presence of atleast two witnesses not in the employment of the Bank andmake a scrutinizer's report of the votes cast in favour or against, if any forthwith to the Chairman. The results shall be declared onor after the AGM of the Bank. The results declared along with the Srutinizer's Report shall be available on the Bank's website withintwo (2) days of passing of the resolution at the AGM of the Bank and communicated to the Stock Exchange/s.

The Bank has engaged the services of CDSL as the authorized agency to provide the e-voting facilities.

The instructions for shareholders voting electronically are as under:

(i) The voting period begins on 07.06.2016 at 10.00 A.M. and ends on 09.06.2016 at 05.00 P.M. During this period shareholders'of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date (record date) of 03.06.2016may cast their vote electronically. The e-Voting module shall be disabled by CDSL for voting thereafter.

(ii) Shareholders who have already voted prior to the meeting date would not be entitled to vote at the meeting venue.

(iii) The shareholders should log on to the e-Voting website www.evotingindia.com.

(iv) Click on Shareholders.

(v) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,

b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

c. Members holding shares in Physical Form should enter Folio Number registered with the Company.

(vi) Next enter the Image Verification as displayed and Click on Login.

(vii) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of anycompany, then your existing password is to be used.

(viii) If you are a first time user follow the steps given below:

For Members holding shares in Demat Form and Physical Form

PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both dematshareholders as well as physical shareholders)

• Members who have not updated their PAN with the Company/Depository Participant are requestedto use the first two letters of their name and the 8 digits of the sequence number in the PAN field.

• In case the sequence number is less than 8 digits enter the applicable number of 0's before thenumber after the first two characters of the name in CAPITAL letters. Eg. If your name is RameshKumar with sequence number 1 then enter RA00000001 in the PAN field.

Dividend Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your dematBank Details account or in the company records in order to loginOR Date of Birth • If both the details are not recorded with the depository or company please enter the member id / folio(DOB) number in the Dividend Bank details field as mentioned in instruction (v).

(ix) After entering these details appropriately, click on "SUBMIT" tab.

(x) Members holding shares in physical form will then directly reach the Company selection screen. However, members holdingshares in demat form will now reach 'Password Creation' menu wherein they are required to mandatorily enter their loginpassword in the new password field. Kindly note that this password is to be also used by the demat holders for voting forresolutions of any other company on which they are eligible to vote, provided that company opts for e-Voting through CDSLplatform. It is strongly recommended not to share your password with any other person and take utmost care to keep yourpassword confidential.


(xi) For Members holding shares in physical form, the details can be used only for e-Voting on the resolutions contained in thisNotice.

(xii) Click on the EVSN for the relevant <Company Name> on which you choose to vote.

(xiii) On the voting page, you will see "RESOLUTION DESCRIPTION" and against the same the option "YES/NO" for voting. Selectthe option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that youdissent to the Resolution.

(xiv) Click on the "RESOLUTIONS FILE LINK" if you wish to view the entire Resolution details.

(xv) After selecting the resolution you have decided to vote on, click on "SUBMIT". A confirmation box will be displayed. If you wishto confirm your vote, click on "OK", else to change your vote, click on "CANCEL" and accordingly modify your vote.

(xvi) Once you "CONFIRM" your vote on the resolution, you will not be allowed to modify your vote.

(xvii) You can also take a print of the votes cast by clicking on "Click here to print" option on the Voting page.

(xviii) If a demat account holder has forgotten the login password then Enter the User ID and the image verification code and click onForgot Password & enter the details as prompted by the system.

(xix) Note for Non - Individual Shareholders and Custodians

• Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on towww.evotingindia.com and register themselves as Corporates.

• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed [email protected].

• After receiving the login details a Compliance User should be created using the admin login and password. The ComplianceUser would be able to link the account(s) for which they wish to vote on.

• The list of accounts linked in the login should be mailed to [email protected] and on approval of the accountsthey would be able to cast their vote.

• A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian,if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.

(xx) In case you have any queries or issues regarding e-Voting, you may refer the Frequently Asked Questions ("FAQs") ande-Voting manual available at www.evotingindia.com, under help section or write an email to [email protected].


CIN L65110TN1926PLC001377

Registered Office: Salem Road, Kathaparai, Karur - 639 006.Corporate Office: "LVB House", No. 4, Sardar Patel Road, Guindy, Chennai - 600 032.

Website: www.lvbank.com, Tel No.: 044-22205306, Email: [email protected]


POSTAL BALLOT FORM1 Name of Sole / First Member

2 Name(s) of Joint Member(s), if any

3 Registered Folio No. / DPID No. / Client ID No.

4 No. of Shares held

Item Description Type of No. of I / We I / WeNo. resolution Shares assent to dissent from

( Ordinary / the resolution the resolutionSpecial) (FOR) (AGAINST)

1 Adoption of audited financial statements of the bank for theyear ended 31st March 2016 and the Report of the Directors'and the Auditors' thereon.

2 Declaration of Dividend on equity shares. Ordinary

3 Appointment of Director in place of Shri. N. Malayalaramamirthamwho retires by rotation and being eligible, offers himself forre-appointment

4 Appointment of Statutory Auditors. Ordinary

5 Appointment of Branch Auditors. Ordinary

6 Appointment of Shri. Parthasarathi Mukherjee as ManagingDirector and Chief Executive Officer of the Bank.

7 Adoption of fresh Articles of Association in line with theCompanies Act, 2013

8 Increasing the Authorized Share Capital of the Bank.

9 Amendment to the Clause 6 (Capital Clause) of the Memorandumof Association.

10 Raising of capital through QIP, GDR, ADR etc.

11 Approval for borrowing / raising funds in Indian / foreign currencyby issue of debt securities upto $ 200.00 crores to eligibleinvestors on private placement basis.

I/We hereby exercise our right to vote in respect of the Resolution(s) for the business stated in the AGM Notice dated 06.05.2016of the Bank by conveying my / our assent or dissent to the said resolution(s) by placing the tick (�) mark at the appropriate boxbelow:

Place :

Date :(Signature of Member/s)

Note : Kindly read the instructions printed overleaf before filling the form.

Last date for receipt of postal ballot forms by Scrutinizer is Thursday, the 9th day of June 2016 not later than 5.00 P.M.

Ordinary

Ordinary

Ordinary

��

Special

Special

Special

Ordinary

Ordinary


1. The Bank is providing the facility of postal ballot, to enablethose shareholders, who do not have access to e-Votingfacility, to send their assent or dissent in writing through postalballot as per the provisions of the Companies (Managementand Administration) Rules, 2014 and amendments madethereto. Accordingly, this Postal Ballot Form is being providedto facilitate e-Voting provided under Section 108 of theCompanies Act, 2013.

2. A member desiring to exercise his/her vote by Postal BallotForm should complete this Postal Ballot Form and send theduly signed Form through the enclosed self-addressedpostage pre-paid envelope so as to reach the Scrutinizer asper instruction below at the address Mr. K. Muthusamy(Scrutinizer), C/o. M/s Integrated Enterprises (India) Limited,II floor, "Kences Towers" No.1 Ramakrishna Street, NorthUsman Road, T.Nagar, Chennai - 600 017. Postage will beborne and paid by the Bank. Envelopes containing PostalBallots, deposited in person or sent by courier at the expenseof the Members will also be accepted.

3. The self-addressed envelope bears the name of theScrutinizer appointed by the Board of the Bank and theaddress at which the Postal Ballot Form is to be sent.

4. The Postal Ballot form should be completed and signed bythe Members. In the case of joint shareholding, this formshould be completed and signed by the first named Memberand in his absence; by the next named Member. UnsignedPostal Ballot forms will be rejected. The signature on thePostal Ballot Form must tally with the specimen signatureregistered with the Bank.

5. For the votes to be considered valid, the institutionalshareholders (i.e., other than individuals, HUF, NRIs etc.)are required to send certified copy of the relevantauthorization / board resolution along with the Postal BallotForm. A member may sign the Form through an Attorneyappointed specifically for this purpose, in which case, anattested true copy of the Power of Attorney should be attachedto the Postal Ballot Form.

6. Duly completed Postal Ballot Forms should reach theScrutinizer not later than 05.00 P.M., on 09.06.2016.Any Postal Ballot Form received after this time and date will

POSTAL BALLOT INSTRUCTION

be treated as if the reply from the Member has not beenreceived.

7. A member may request for a duplicate Postal Ballot Form,if so required. However the duly filled in duplicate Postal BallotForm should reach the Scrutinizer not later than the timeand date specified at Sl. No. 6 above.

8. Voting rights will be reckoned on the paid-up value of sharesregistered in the name of the Member on 03.06.2016, whichis the cutoff date is fixed for this purpose.

9. Members are requested not to send any other paper alongwith the Postal Ballot Form in the enclosed self-addressedpostage pre-paid envelope in as much as all suchenvelopes will be sent to the Scrutinizer and any extra paperfound in such envelope would be destroyed by theScrutinizer.

10. There will be one Postal Ballot Form for every folio irrespectiveof the number of joint members(s).

11. A member need not use all the votes nor does he need tocast all the votes in the same way.

12. The Scrutinizer's decision on the validity of a Postal Ballotwill be final and binding.

13. Incomplete, unsigned or incorrect Postal Ballot Forms will berejected.

14. The date of AGM will be the deemed date of passingresolution(s) through e-Voting / Postal ballot. It may also benoted that, in terms of Section 114 of the Companies Act,2013, the resolutions contained in the AGM Notice will bedeemed to have been passed through the e-Voting and ballot.The results shall be declared in terms of Rule 20 of theCompanies (Management and Administration) Rules, 2014,as amended, as the case may be.

15. The right of e-Voting and Postal Ballot Form shall not beexercised by a Proxy.

16. Members may please note that they have to vote throughany one of the modes viz., e-Voting, Postal Ballot or voting atthe AGM Venue. Members who have already voted prior tothe meeting date would not be entitled to vote at the AGMvenue.


CIN L65110TN1926PLC001377Registered Office: Salem Road, Kathaparai, Karur - 639 006.

Corporate Office: "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 Office Salem Road, Kathaparai, Karur - 639 006.

Name of the member(s)

Registered Address

E-mail 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


Address

E-mail ID

Signature Failing him


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 89th Annual General Meeting of the bank, to be held on the10th June, 2016 at 10.00 A.M. at the Registered Office, Salem Road, Kathaparai, Karur- 639 006 and at any adjournment thereof in respect of suchresolution as indicated below:

Res. No. Resolution

1. Adoption of audited financial statements of the bank for the year ended 31st March 2016 and the Report of the Directors' and the Auditors'thereon.

2. Declaration of Dividend on equity shares.

3. Appointment of Director in place of Shri. N. Malayalaramamirtham who retires by rotation and being eligible, offers himself for re-appointment

4. Appointment of Statutory Auditors.

5. Appointment of Branch Auditors.

6. Appointment of Shri. Parthasarathi Mukherjee as Managing Director and Chief Executive Officer of the Bank.

7. Adoption of fresh Articles of Association in line with the Companies Act, 2013

8. Increasing the Authorized Share Capital of the Bank.

9. Amendment to the Clause 6 (Capital Clause) of the Memorandum of Association.

10. Raising of capital through QIP, GDR, ADR etc.

11. Approval for borrowing / raising funds in Indian / foreign currency by issue of debt securities upto $ 200.00 crores to eligible investors onprivate placement basis.

Affix` 1/-

RevenueStamp

Signed this……………………………………………… day of …………………………………….. 2016.

Signature of Shareholder: ……………………………………….........................................……………

Signature of Proxy holder(s): ……………………………..........................................………………….

Note : This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Bank, not lessthan 48 hours before the commencement of the meeting

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ROUTE MAP TO THE VENUE OF THE AGM

Govt. Hospital

Karur Bus stand

Lakshmi Vilas Bank Registered Office

J a w a h a r B a z z a r

K o v a i R o a d

National Highways (NH) (NH)

Railway station

Pasubathiswarar Temple

Church

Vengamedu

Vengamedu

N

Sri KalyanaPasupatheeswarar

Temple


board of directors€¦ · deposits grew by 15.78%, from $ 21,964.21 crores as at 31st march 2015...

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