REG - Federal Bank Ltd The - Annual Financial Report
SDF-24/ /2020-21 May 29, 2020
To,
The London Stock Exchange
Dear Sir,
We enclose herewith the Audited Financial Results of the Bank for the quarter and year ended March 31, 2020 (both standalone and consolidated) along with Audit Report issued by the Joint Central Statutory Auditors of the Bank, which were reviewed and recommended by Audit Committee of the Board and duly approved by the Board of Directors at their respective meetings held on May 28, 2020.
Kindly take the same on your record.
For The Federal Bank Limited
Sd/-
Samir P Rajdev
Company Secretary
B S R & Co. LLP
M.M. Nissim & Co.
Chartered Accountants
Chartered Accountants
5th Floor, Lodha Excelus
Barodawala Mansion, B-Wing
Apollo Mills Compound
3rd Floor, 81
N.M. Joshi Marg, Mahalaxmi
Dr. Annie Besant Road
Mumbai - 400 011
Worli, Mumbai - 400 018
Auditor's Report on the Standalone Annual Financial Results of
The Federal Bank Limited pursuant to the Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
Independent Auditor's Report
To the Board of Directors of
The Federal Bank Limited
Report on the audit of the Standalone Annual Financial Results
Opinion
We have audited the accompanying standalone annual financial results of The Federal Bank Limited ("the Bank") for the year ended 31 March 2020, attached herewith, (the "standalone Financial Results"), being submitted by the Bank pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("Listing Regulations"). except for the disclosures relating to Pillar 3 disclosure as at 31 March 2020, including leverage ratio and liquidity coverage ratio under Basel III Capital Regulations as have been disclosed on the Bank's website and in respect of which a link has been provided in the standalone Financial Results and have not been audited by us. Attention is drawn to the fact that the figures for the last quarter ended 31 March 2020 and the corresponding quarter ended in the previous year as reported in these standalone Financial Results are the balancing figures between audited figures in respect of the full financial year and the published year to date figures up to the end of the third quarter of the relevant financial year. Also the figures up to the end of the third quarter had only been reviewed and not subjected to audit.
In our opinion and to the best of our information and according to the explanations given to us, these standalone Financial Results:
i. are presented in accordance with the requirements of Regulation 33 of the Listing Regulations in this regard except for the disclosures relating to Pillar 3 disclosure as at 31 March 2020, including leverage ratio and liquidity coverage ratio under Basel III Capital Regulations as have been disclosed on the Bank's website and in respect of which a link has been provided in the standalone Financial Results and have not been audited by us; and
ii. give a true and fair view, in conformity with the recognition and measurement principles laid down in the applicable accounting standards, RBI guidelines and other accounting principles generally accepted in India of the net profit and other financial information for the year ended 31 March 2020.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing ("SAs") specified under section 143(10) of the Companies Act, 2013 ("the Act"). Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone Annual Financial Results section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone Financial Results , and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
As more fully described in Note 11 to the standalone Financial Results, the Bank has recognized provision on certain loans that were though overdue but standard as at 29 February 2020, for which moratorium benefit has been granted, based on the days past due status as on that date in accordance with the Reserve Bank of India COVID-19 Regulatory Package.
As more fully described in Note 11 to the standalone Financial Results, the extent to which the COVID-19 pandemic will have impact on the Bank's financial performance is dependent on future developments, which are highly uncertain.
Our opinion on the standalone financial results is not modified in respect of the above matters.
Responsibilities of Management and those Charged with Governance for the Standalone Annual Financial Results
These standalone Financial Results have been prepared on the basis of the standalone annual financial statements and reviewed quarterly standalone Financial Results upto the end of the third quarter. The Bank's Management and the Board of Directors are responsible for the preparation of these standalone Financial Results that give a true and fair view of the net profit and other financial information in accordance with the recognition and measurement principles laid down in the Accounting Standards specified under Section 133 of the Act, the relevant provisions of the Banking Regulation Act, 1949, the circulars, guidelines and directions issued by the Reserve Bank of India (RBI) from time to time ("RBI Guidelines") and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Financial Results that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Financial Results, the Management and the Board of Directors are responsible for assessing the Bank's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management and Board of Directors either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Bank's financial reporting process
Auditor's Responsibilities for the Audit of the Standalone Annual Financial Results
Our objectives are to obtain reasonable assurance about whether the standalone Financial Results as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Financial Results.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
§ Identify and assess the risks of material misstatement of the standalone Financial Results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
§ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Bank has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
§ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.
§ Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone Financial Results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Bank to cease to continue as a going concern.
§ Evaluate the overall presentation, structure and content of the standalone Financial Results, including the disclosures, and whether the standalone Financial Results represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Other Matters
The standalone Financial Results incorporate the relevant returns of 80 Branches and Treasury Branch audited by either of us and audited returns in respect of 1,169 branches audited by other branch auditors. The Branches audited by us cover 47.76% of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 32.73% of non-performing advances of the Bank.
For B S R & Co. LLP
For M.M. Nissim & Co.
Chartered Accountants
Chartered Accountants
Firm's Registration No: 101248W / W-100022
Firm's Registration No: 107122W
Akeel Master
Varun P Kothari
Partner
Partner
Membership No: 046768
Membership No: 115089
ICAI UDIN:20046768AAAAIJ4071
ICAI UDIN: 20115089AAAAIM3669
Mumbai
Mumbai
28 May 2020
28 May 2020
B S R & Co. LLP
M.M. Nissim & Co.
Chartered Accountants
Chartered Accountants
5th Floor, Lodha Excelus
Barodawala Mansion, B-Wing
Apollo Mills Compound
3rd Floor, 81
N.M. Joshi Marg, Mahalaxmi
Dr. Annie Besant Road
Mumbai - 400 011
Worli, Mumbai - 400 018
Auditor's Report on the Consolidated Annual Financial Results of The Federal Bank Limited pursuant to the Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
Independent Auditor's Report
To the Board of Directors of
The Federal Bank Limited
Report on the audit of the Consolidated Annual Financial Results
Opinion
We have audited the accompanying Consolidated Annual Financial Results of The Federal Bank Limited ('the Bank'), its subsidiaries and associates (the parent and its subsidiaries together referred to as 'the Group') for the year ended 31 March 2020 (the 'Consolidated Financial Results'), attached herewith, being submitted by the Bank pursuant to the requirement of Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('the Listing Regulations') except for the disclosures relating to consolidated Pillar 3 disclosure as at 31 March 2020, including leverage ratio and liquidity coverage ratio under Basel III Capital Regulations as have been disclosed on the Bank's website and in respect of which a link has been provided in the consolidated financial results and have not been audited by us. Attention is drawn to the fact that the figures for the last quarter ended 31 March 2020 and the corresponding quarter ended in the previous year as reported in these consolidated financial results are the balancing figures between consolidated audited figures in respect of the full financial year and the published year to date consolidated figures up to the end of the third quarter of the relevant financial year. Also the figures up to the end of the third quarter had only been reviewed and not subjected to audit.
In our opinion and to the best of our information and according to the explanations given to us, and based on consideration of reports of other auditors on separate audited financial statements of the subsidiaries and associates, the aforesaid Consolidated Financial Results:
iii. include the annual audited financial results of the following entities;
a. Federal Bank Limited (the parent)
b. Fedbank Financial Services Limited (the Subsidiary)
c. Federal Operations and Services Limited (the Subsidiary)
d. IDBI-Federal Life Insurance Company Limited (the Associate)
e. Equirus Capital Private Limited (the Associate)
iv. are presented in accordance with the requirements of Regulation 33 of the Listing Regulations except for the disclosures relating to Pillar 3 disclosure as at 31 March 2020, including leverage ratio and liquidity coverage ratio under Basel III Capital Regulations as have been disclosed on the Bank's website and in respect of which a link has been provided in the consolidated Financial Results and have not been audited by us; and
v. give a true and fair view, in conformity with the applicable accounting standards, RBI guidelines and other accounting principles generally accepted in India, of the consolidated net profit and other financial information of the Group including its associate for the year ended 31 March 2020.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing ("SAs") specified under section 143(10) of the Companies Act, 2013 ("the Act"). Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Consolidated Annual Financial Results section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Consolidated Financial Results, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us and other auditors in terms of their report referred to in "Other Matter" paragraph below, is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
As more fully described in Note 12 to the Consolidated Financial Results, the Bank has recognized provision on certain loans that were though overdue but standard as at 29 February 2020, for which moratorium benefit has been granted, based on the days past due status as on that date in accordance with the Reserve Bank of India COVID-19 Regulatory Package.
As more fully described in Note 12 to the Consolidated Financial Results, the extent to which the COVID-19 pandemic will have impact on the Bank's financial performance is dependent on future developments, which are highly uncertain.
Our opinion on the Consolidated Financial Results is not modified in respect of the above matters.
Responsibilities of Management and those Charged with Governance for the Consolidated Annual Financial Results
These Consolidated Financial Results have been prepared on the basis of the consolidated annual financial statements and reviewed quarterly consolidated financial results up to the end of the third quarter. The Bank's Management and Board of Directors are responsible for the preparation and presentation of these Consolidated Financial Results that give a true and fair view of the consolidated net profit and other financial information of the Group including its associate in accordance with the Accounting Standards specified under section 133 of the Act, the relevant provisions of the Banking Regulation Act, 1949, the circulars, guidelines and directions issued by the Reserve Bank of India (RBI) from time to time ("RBI Guidelines") and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. The respective Board of Directors of the entities included in the Group and of its associate are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating
Auditor's Report on the Consolidated Annual Financial Results of The Federal Bank Limited pursuant to the Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Continued)
The Federal Bank Limited
Responsibilities of Management and those Charged with Governance for the Consolidated Annual Financial Results (continued)
effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Consolidated Financial Results that give a true and fair view and are free from material misstatement, whether due to fraud or error which have been used for the purpose of preparation of the consolidated financial results by the Directors of the Bank, as aforesaid.
In preparing the Consolidated Financial Results, the respective Management and Board of Directors of the entities included in the Group and its associate are responsible for assessing the ability of the Group and of its associate to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management and Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors of the entities included in the Group and of its associate are responsible for overseeing the financial reporting process of the Group and of its associate.
Auditor's Responsibilities for the Audit of the Consolidated Annual Financial Results
Our objectives are to obtain reasonable assurance about whether the Consolidated Financial Results as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Consolidated Financial Results.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
§ Identify and assess the risks of material misstatement of the Consolidated Financial Results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
§ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Bank has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
§ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.
Auditor's Report on the Consolidated Annual Financial Results of The Federal Bank Limited pursuant to the Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Continued)
The Federal Bank Limited
Auditor's Responsibilities for the Audit of the Consolidated Annual Financial Results (continued)
§ Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group and its associate to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Consolidated Financial Results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group and its associate to cease to continue as a going concern.
§ Evaluate the overall presentation, structure and content of the Consolidated Financial Results, including the disclosures, and whether the Consolidated Financial Results represent the underlying transactions and events in a manner that achieves fair presentation.
· Obtain sufficient appropriate audit evidence regarding the financial results/ financial information of the entities within the Group to express an opinion on the Consolidated Financial Results. We are responsible for the direction, supervision and performance of the audit of financial information of such entities included in the Consolidated Financial Results of which we are the independent auditors. For the other entities included in the Consolidated Financial Results, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.
We communicate with those charged with governance of the Bank regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
We also performed procedures in accordance with the circular issued by the SEBI under Regulation 33(8) of the Listing Regulations, as amended, to the extent applicable.
Auditor's Report on the Consolidated Annual Financial Results of The Federal Bank Limited pursuant to the Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Continued)
The Federal Bank Limited
Other Matters
· We did not audit the financial statements/ information of two subsidiaries, whose financial statements reflect total assets of Rs. 404,183 lakhs as at 31 March 2020, total revenues of Rs. 49,005 lakhs and total net profit after tax of Rs. 4,080 lakhs for the year ended 31 March 2020, and net cash inflow amounting to Rs. 15,882 lakhs for the year ended on that date, as considered in the Consolidated Financial Results. The Consolidated Financial Results also include the Group's share of net profit of Rs. 3,771 lakhs for the year ended 31 March 2020, as considered in the Consolidated Financial Results, in respect of two associates, whose financial statements have not been audited by us. These financial statements have been audited by other auditors whose report has been furnished to us by the Management and our opinion on the Consolidated Financial Results, in so far as it relates to the amounts and disclosures included in respect of its subsidiaries and its associates, is based solely on the reports of the such auditors and the procedures performed by us are as stated in section above.
· The auditors of IDBI-Federal Life Insurance Company Limited ('the associate') have reported, 'The actuarial valuation of the liabilities for life policies in force and for discontinued policies where liability exists is the responsibility of the Company's Appointed Actuary ("the appointed Actuary").The actuarial valuation of these liabilities as at 31 March 2020 has been duly certified by the Appointed Actuary and in his opinion, the assumption for such valuation are in accordance with guidelines and norms issued by the Insurance regulatory and Development Authority of India and the Actuarial Society of India in concurrence with the Authority. We have relied upon the Appointed Actuary's certificate in this regard for forming our opinion on the financial statements of the Company'.
Our opinion on the Consolidated Financial Results is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors.
For B S R & Co. LLP
For M.M. Nissim & Co.
Chartered Accountants
Chartered Accountants
Firm's Registration No: 101248W / W-100022
Firm's Registration No: 107122W
Akeel Master
Varun P Kothari
Partner
Partner
Membership No: 046768
Membership No: 115089
ICAI UDIN:20046768AAAAIK7207
ICAI UDIN: 20115089AAAAIN2079
Mumbai
Mumbai
28 May 2020
28 May 2020
THE FEDERAL BANK LIMITED
REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101
(CIN: L65191KL1931PLC000368)
STANDALONE AUDITED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED MARCH 31, 2020
(` in Lakhs)
Particulars
Quarter ended
Year ended
31.03.2020
31.12.2019
31.03.2019
31.03.2020
31.03.2019
Audited
(Refer Note 14 below)Unaudited
Audited
(Refer Note 14 below)Audited
Audited
1. Interest earned (a)+(b)+(c)+(d)
339,684
333,036
303,232
1,321,075
1,141,903
(a)
Interest/discount on advances/bills
272,435
270,278
241,305
1,067,087
908,962
(b)
Income on investments
56,529
53,611
53,638
218,407
203,745
(c)
Interest on balances with Reserve Bank of India and other inter bank funds
4,686
3,527
1,178
13,996
7,347
(d)
Others
6,034
5,620
7,111
21,585
21,849
2. Other income
71,111
40,786
41,172
193,141
135,102
3. TOTAL INCOME (1+2)
410,795
373,822
344,404
1,514,216
1,277,005
4. Interest expended
218,083
217,543
193,579
856,185
724,268
5. Operating expenses (i)+(ii)
96,780
81,897
75,350
337,561
276,427
(i)
Employees cost
51,906
41,476
37,015
177,236
137,776
(ii)
Other operating expenses
44,874
40,421
38,335
160,325
138,651
6. TOTAL EXPENDITURE (4+5)
(excluding provisions and contingencies)314,863
299,440
268,929
1,193,746
1,000,695
7. OPERATING PROFIT (3-6)
(Profit before provisions and contingencies)95,932
74,382
75,475
320,470
276,310
8. Provisions (other than tax) and contingencies
56,750
16,086
17,776
117,217
85,585
9. Exceptional items
-
-
-
-
-
10. Profit from Ordinary Activities before tax
(7-8-9)39,182
58,296
57,699
203,253
190,725
11. Tax expense
9,059
14,232
19,548
48,975
66,336
12. Net Profit from Ordinary Activities after tax (10-11)
30,123
44,064
38,151
154,278
124,389
13. Extraordinary items (net of tax expense)
-
-
-
-
-
14. Net Profit for the period (12-13)
30,123
44,064
38,151
154,278
124,389
15. Paid-up Equity Share Capital
(Face value ` 2/- per Equity Share)39,853
39,846
39,701
39,853
39,701
16. Reserves excluding Revaluation Reserve
1,411,407
1,287,102
17. Analytical Ratios
(i)
Percentage of shares held by Government of India
NIL
NIL
NIL
NIL
NIL
(ii)
Capital Adequacy ratio (%)
Under Basel III
14.35
13.64
14.14
14.35
14.14
(iii)
Earnings per Share (EPS) (in `)
(a) Basic EPS (before and after extra ordinary items)
1.51*
2.21*
1.92*
7.76
6.28
(b) Diluted EPS (before and after extra ordinary items)
1.50*
2.20*
1.91*
7.70
6.24
(iv)
NPA Ratios
a) Gross NPA
353,083
361,869
326,068
353,083
326,068
b) Net NPA
160,717
194,101
162,620
160,717
162,620
c) % of Gross NPA
2.84
2.99
2.92
2.84
2.92
d) % of Net NPA
1.31
1.63
1.48
1.31
1.48
(v)
Return on Assets (%)
0.17*
0.26*
0.25*
0.94
0.88
* Not Annualised
Segment Information@
(` in Lakhs)
Particulars
Quarter ended
Year ended
31.03.2020
31.12.2019
31.03.2019
31.03.2020
31.03.2019
Audited
(Refer Note 14 below)Unaudited
Audited
(Refer Note 14 below)Audited
Audited
Segment Revenue:
Treasury
102,236
70,179
66,515
314,209
254,761
Corporate/Wholesale Banking
139,527
135,913
145,079
562,327
507,376
Retail Banking
161,319
160,131
121,852
609,272
488,342
Other Banking operations
7,713
7,599
10,958
28,408
26,526
Unallocated
-
-
-
-
-
Total Revenue
410,795
373,822
344,404
1,514,216
1,277,005
Less: Inter Segment Revenue
-
-
-
-
-
Income from Operations
410,795
373,822
344,404
1,514,216
1,277,005
Segment Results (net of provisions):
Treasury
39,033
15,456
10,950
82,200
41,085
Corporate/Wholesale Banking
(35,680)
(11,340)
14,328
(32,879)
25,969
Retail Banking
36,349
54,381
28,188
156,061
120,186
Other Banking operations
1,968
620
5,280
3,817
6,690
Unallocated
(2,488)
(821)
(1,047)
(5,946)
(3,205)
Profit before tax
39,182
58,296
57,699
203,253
190,725
Segment Assets
Treasury
4,183,243
3,519,353
3,575,297
4,183,243
3,575,297
Corporate/Wholesale Banking
6,264,764
6,000,398
5,816,960
6,264,764
5,816,960
Retail Banking
6,669,709
6,535,673
5,668,073
6,669,709
5,668,073
Other Banking operations
375
2,049
1,138
375
1,138
Unallocated
945,714
1,221,607
872,531
945,714
872,531
Total
18,063,805
17,279,080
15,933,999
18,063,805
15,933,999
Segment Liabilities
Treasury
4,075,361
3,406,295
3,476,144
4,075,361
3,476,144
Corporate/Wholesale Banking
6,024,101
5,922,863
5,600,730
6,024,101
5,600,730
Retail Banking
6,421,436
6,458,732
5,461,130
6,421,436
5,461,130
Other Banking operations
24
14
4
24
4
Unallocated
91,122
70,038
68,687
91,122
68,687
Total
16,612,044
15,857,942
14,606,695
16,612,044
14,606,695
Capital employed:
(Segment Assets - Segment Liabilities)
Treasury
107,882
113,058
99,153
107,882
99,153
Corporate/Wholesale Banking
240,663
77,535
216,230
240,663
216,230
Retail Banking
248,273
76,941
206,943
248,273
206,943
Other Banking operations
351
2,035
1,134
351
1,134
Unallocated
854,592
1,151,569
803,844
854,592
803,844
Total
1,451,761
1,421,138
1,327,304
1,451,761
1,327,304
@
For the above segment reporting, the reportable segments are identified as Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations in compliance with the RBI guidelines.
Statement of Assets and Liabilities of the Bank as on March 31, 2020 is given below:
(` in Lakhs)
Particulars
As at 31.03.2020
As at 31.03.2019
Audited
Audited
CAPITAL AND LIABILITIES
Capital
39,853
39,701
Reserves and Surplus
1,411,908
1,287,603
Deposits
15,229,008
13,495,434
Borrowings
1,037,243
778,132
Other Liabilities and Provisions
345,793
333,129
Total
18,063,805
15,933,999
ASSETS
Cash and Balances with Reserve Bank of India
617,491
641,917
Balance with Banks and Money at Call and Short Notice
639,967
364,763
Investments
3,589,268
3,182,447
Advances
12,226,791
11,022,295
Fixed assets
47,999
47,204
Other assets
942,289
675,373
Total
18,063,805
15,933,999
Notes:
1
The above Financial Results for the quarter and year ended March 31, 2020 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on May 28, 2020. These Results have been subjected to "Audit" by the Statutory Central Auditors of the Bank and an unqualified report has been issued by them.
2
The Bank has consistently applied its significant accounting policies in the preparation of the quarterly financial results and its annual financial statements during the years ended March 31, 2020 and March 31, 2019.
3
The working results have been arrived at after considering provision for standard assets, including requirements for exposures to entities with Unhedged Foreign Currency Exposures, non-performing assets (NPAs), depreciation on investments, income-tax and other usual and necessary provisions.
4
Other income includes fees earned from providing services to customers, commission from non-fund-based banking activities, earnings from foreign exchange and derivative transactions, selling of third-party products, profit on sale of investments (net), recoveries from advances written off etc.
5
During the quarter ended June 30, 2018, as per RBI Circular, the Bank had exercised the option of spreading the provision for Mark to Market (MTM) losses of ` 5,893.97 Lakhs equally over 4 quarters and accordingly unamortised MTM losses of ` 4,420.48 Lakhs were deferred to be amortised in remaining quarters of FY 2019, which was fully amortised in FY 2019.
6
The Capital Adequacy Ratio is computed on the basis of RBI guidelines applicable on the relevant reporting dates and the ratio for the corresponding previous period is not adjusted to consider the impact of subsequent changes if any, in the guidelines.
7
The Business operations of the Bank are largely concentrated in India and for the purpose of Segment reporting, the bank is considered to operate only in domestic segment, though the bank has its operations in International Finance Service Centre (IFSC) Banking Unit in Gujarat International Finance Tec-city (GIFT). The business conducted from the same is considered as part of Indian operations.
8
During the quarter and year ended March 31, 2020, the Bank has allotted 386,640 and 7,612,869 equity shares of ` 2 each, pursuant to the exercise of stock options by employees.
9
During the quarter ended September 30, 2019, the Bank had elected to exercise the option permitted under section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019. Accordingly, the Bank has recognised Provision for Income Tax for quarter and year ended March 31, 2020 and re-measured its Deferred tax liability, basis the rate prescribed in the aforesaid section and recognized the effect of change by revising the annual effective income tax rate.
10
In accordance with RBI Circular DBR.No.BP.BC.1/21.06.201/2015-16 on Basel III Capital Regulations dated July 01, 2015 and RBI Circular DBR.No.BP.BC.80/21.06.201/2014-15 dated March 31, 2015 - 'Prudential Guidelines on Capital Adequacy and Liquidity Standards - Amendments', Banks are required to make Pillar 3 disclosure requirements including Leverage Ratio disclosure requirements that are to be made along with the publication of Financial Results. Accordingly, such applicable disclosures have been placed on the website of the Bank which can be accessed at the following link: http://www.federalbank.co.in/regulatory-disclosures. These disclosures have not been subjected to audit or review by the Statutory Central Auditors of the Bank.
11
The SARS-CoV-2 virus responsible for COVID-19 continues to spread across the globe and India, which has contributed to a significant volatility in global and Indian Financial markets and a significant decrease in the global and local economic activities. COVID-19 outbreak was declared as a global pandemic on March 11, 2020 by World Health Organisation. The Government of India had announced a series of lock-down measures on March 24, 2020 which has been extended from time to time up to May 31, 2020. The recent directions from the Government indicates calibrated and gradual withdrawal of lockdown and partial resumption of economic activities, though major economic centres still continue to be under strict lockdown. The extent to which the COVID-19 pandemic will impact the Bank's results will depend on future developments, which are highly uncertain, including among other things, any new information concerning the severity of the COVID-19 pandemic and action to contain its spread or mitigate its impact whether government mandated or elected by the Bank. The Bank's capital and liquidity position is strong and would continue to be the focus area for the Bank during this period.
In accordance with the 'COVID-19 Regulatory Packages' announced by the RBI on March 27, 2020 and April 17, 2020 ('the RBI guidelines'), with regard to providing relief to borrowers' on account of COVID-19 pandemic whose accounts were standard as on February 29, 2020 , the Bank, in accordance with the Board approved policy had offered moratorium on repayment of loan instalments and/or deferment of interest due between March 1, 2020 and May 31, 2020 including relaxation in certain parameters, to all eligible borrowers, without considering the same as restructuring. Further on May 22, 2020, RBI has permitted the Banks to extend such benefits to eligible borrowers for another three months, from June 1, 2020 to August 31, 2020. In accordance with the RBI guidelines, the Bank is required to make provision @ 10% of outstanding advances over two quarters beginning with quarter ending March 31, 2020 in respect of such borrowers whose accounts, though classified as standard as on March 31, 2020, would have become non-performing but for these benefits/relaxations extended as per RBI guidelines. The Bank, as a prudent measure, has made the entire 10% provision amounting to ` 3,026.60 Lakhs in the current quarter.
Further, in addition to the above, as a prudent measure, the Bank has made additional provision of ` 6,303.40 Lakhs as at March 31, 2020 against the likely impact of COVID-19 pandemic in respect of exposure of the Bank to certain specified sectors based on assessment of presently available information. The entire provision of ` 9,330.00 Lakhs in respect of COVID-19 impact is grouped under Other liabilities and provisions in the Balance sheet of the Bank.
12
The Reserve Bank of India, vide its circular dated April 17, 2020, has decided that banks shall not make any further dividend payouts from profits pertaining to the financial year ended March 31, 2020 until further instructions, with a view that banks must conserve capital in an environment of heightened uncertainty caused by COVID-19 pandemic. Accordingly, the Board of Directors of the Bank have not recommended any dividend for the year 2019-20 (Previous Year 70% i.e ` 1.40/- per Equity Share).
13
During the quarter and year ended March 31, 2020, the Bank has invested ` 5,920.00 Lakhs and ` 6,420.00 Lakhs respectively in its subsidiaries (` 500.00 Lakhs in Preference shares with face value ` 10 each of Federal Operations and Services Limited & ` 5,920.00 Lakhs in equity shares with face value ` 10 each of Fedbank Financial Services Limited) and ` Nil and ` 66.61 Lakhs in Preference shares with face value ` 5 each respectively in its associate Equirus Capital Private Limited.
14
The figures of the last quarter are the balancing figures between the audited figures in respect of the full financial year and the published year to date figures upto the end of third quarter of the respective financial year, which was subject to limited review.
15
Previous period's / year's figures have been regrouped / reclassified, where necessary to conform to current period's classification.
SHYAM SRINIVASAN
Kochi
MANAGING DIRECTOR & CEO
May 28, 2020
(DIN: 02274773)
THE FEDERAL BANK LIMITED
REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101
(CIN: L65191KL1931PLC000368)
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2020
(` in Lakhs)
Year ended
March 31, 2020Year ended
March 31, 2019Cash Flow from Operating Activities
Net Profit before taxes
203,253
190,725
Adjustments for:
Depreciation on Bank's Property
11,946
12,037
Depreciation on Investments
6,319
10,293
Amortisation of Premium on Held to Maturity Investments
7,401
5,289
Provision for Non Performing Investments
537
2,028
Provision / Charge for Non Performing Assets
101,047
63,055
Provision for Standard Assets
9,908
9,786
(Profit)/Loss on sale of fixed assets (net)
(535)
(1,819)
Provision for Restructured assets
(1,030)
-
Provision for Other Contingencies
435
424
339,281
291,818
Adjustments for working capital changes:-
(Increase)/ Decrease in Investments [excluding Held to Maturity Investments]
33,635
203,789
(Increase)/ Decrease in Advances
(1,305,543)
(1,889,603)
(Increase)/ Decrease in Other Assets
(257,121)
(70,323)
Increase/ (Decrease) in Deposits
1,733,574
2,296,186
Increase/ (Decrease) in Other liabilities and provisions
12,216
55,166
216,761
595,215
Direct taxes paid
(67,635)
(69,944)
Net Cash Flow from / (Used in) Operating Activities
488,407
817,089
Cash Flow from Investing Activities
Purchase of Fixed Assets
(13,046)
(13,836)
Proceeds from Sale of Fixed Assets
842
2,150
Investment in Subsidiary
(6,420)
(500)
Investment in Associate
(67)
(685)
(Increase)/ Decrease in Held to Maturity Investments
(448,227)
(324,553)
Net Cash generated / (Used in) Investing Activities
(466,918)
(337,424)
Cash Flow from Financing Activities
Proceeds from Issue of Share Capital
152
258
Proceeds from Share Premium
3,131
5,279
Proceeds from Issue of Subordinate Debt
30,000
-
Increase/(Decrease) in Borrowings (Excluding Subordinate Debt)
229,110
(375,217)
Dividend Paid (Including Tax on Dividend)
(33,541)
(23,871)
Net Cash generated from Financing Activities
228,852
(393,551)
Effect of exchange fluctuation on translation reserve
437
225
Net Increase in Cash and Cash Equivalents
250,778
86,339
Cash and Cash Equivalents at the beginning of year
1,006,680
920,341
Cash and Cash Equivalents at the end of year
1,257,458
1,006,680
Note:
Cash and Cash Equivalents comprise of Cash in hand (including foreign currency notes), Balances with Reserve Bank of India, Balances with banks and money at call and short notice.
SHYAM SRINIVASAN
Kochi
MANAGING DIRECTOR & CEO
May 28, 2020
(DIN: 02274773)
THE FEDERAL BANK LIMITED
REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101
(CIN: L65191KL1931PLC000368)
CONSOLIDATED AUDITED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED MARCH 31, 2020
(` in Lakhs)
Particulars
Quarter ended
Year ended
31.03.2020
31.12.2019
31.03.2019
31.03.2020
31.03.2019
Audited
(Refer Note 15 below)Unaudited
Audited
(Refer Note 15 below)Audited
Audited
1. Interest earned (a)+(b)+(c)+(d)
354,448
341,395
310,665
1,359,039
1,163,544
(a)
Interest/discount on advances/bills
286,778
278,601
248,706
1,104,518
930,412
(b)
Income on investments
56,560
53,647
53,670
218,550
203,936
(c)
Interest on balances with Reserve Bank of India and other inter bank funds
4,686
3,527
1,178
13,996
7,347
(d)
Others
6,424
5,620
7,111
21,975
21,849
2. Other income
67,839
42,076
39,512
188,181
133,522
3. TOTAL INCOME (1+2)
422,287
383,471
350,177
1,547,220
1,297,066
4. Interest expended
222,137
220,564
195,370
867,831
731,633
5. Operating expenses (i)+(ii)
102,416
86,872
77,691
354,670
283,658
(i)
Employees cost
55,371
44,365
38,510
187,598
142,566
(ii)
Other operating expenses
47,045
42,507
39,181
167,072
141,092
6. TOTAL EXPENDITURE (4+5)
(excluding provisions and contingencies)324,553
307,436
273,061
1,222,501
1,015,291
7. OPERATING PROFIT (3-6)
(Profit before provisions and contingencies)97,734
76,035
77,116
324,719
281,775
8. Provisions (other than tax) and contingencies
57,794
16,254
18,031
118,722
85,765
9. Exceptional items
-
-
-
-
-
10. Profit from Ordinary Activities before tax
(7-8-9)39,940
59,781
59,085
205,997
196,010
11. Tax expense
9,645
14,609
19,978
50,720
67,758
12. Net Profit from Ordinary Activities after tax (10-11)
30,295
45,172
39,107
155,277
128,252
13. Extraordinary items (net of tax expense)
-
-
-
-
-
14. Net Profit for the period (12-13)
30,295
45,172
39,107
155,277
128,252
15. Minority interest
437
280
44
1,028
180
16. Share in Profit of Associates
3,046
270
3,229
3,771
3,556
17. Consolidated Net Profit of the group
(14-15+16)32,904
45,162
42,292
158,020
131,628
18. Paid-up Equity Share Capital
(Face value ` 2/- per Equity Share)39,853
39,846
39,701
39,853
39,701
19. Reserves excluding Revaluation Reserve
1,441,882
1,309,624
20. Analytical Ratios
(i)
Percentage of shares held by Government of India
NIL
NIL
NIL
NIL
NIL
(ii)
Capital Adequacy ratio (%)
Under Basel III
14.63
13.88
14.43
14.63
14.43
(iii)
Earnings per Share (EPS) (in `)
(a) Basic EPS (before and after extra ordinary items)
1.65*
2.27*
2.13*
7.94
6.65
(b) Diluted EPS (before and after extra ordinary items)
1.64*
2.26*
2.12*
7.88
6.60
(iv)
NPA Ratios
a) Gross NPA
358,015
365,657
330,178
358,015
330,178
b) Net NPA
164,953
197,379
166,218
164,953
166,218
c) % of Gross NPA
2.82
2.97
2.92
2.82
2.92
d) % of Net NPA
1.32
1.63
1.49
1.32
1.49
(v)
Return on Assets (%)
0.18*
0.26*
0.27*
0.92
0.88
* Not Annualised
Segment Information@
(` in Lakhs)
Particulars
Quarter ended
Year ended
31.03.2020
31.12.2019
31.03.2019
31.03.2020
31.03.2019
Audited
(Refer Note 15 below)Unaudited
Audited
(Refer Note 15 below)Audited
Audited
Segment Revenue:
Treasury
101,269
70,179
66,514
311,159
254,761
Corporate/Wholesale Banking
136,776
135,913
145,079
559,576
507,376
Retail Banking
175,663
169,780
127,626
647,211
508,403
Other Banking operations
8,579
7,599
10,958
29,274
26,526
Unallocated
-
-
-
-
-
Total Revenue
422,287
383,471
350,177
1,547,220
1,297,066
Less: Inter Segment Revenue
-
-
-
-
-
Income from Operations
422,287
383,471
350,177
1,547,220
1,297,066
Segment Results (net of provisions):
Treasury
38,066
15,456
10,951
79,118
41,469
Corporate/Wholesale Banking
(34,318)
(11,339)
14,328
(31,517)
25,969
Retail Banking
34,930
55,821
29,574
158,639
125,087
Other Banking operations
3,750
664
5,280
5,703
6,690
Unallocated
(2,488)
(821)
(1,048)
(5,946)
(3,205)
Profit before tax
39,940
59,781
59,085
205,997
196,010
Segment Assets
Treasury
4,161,384
3,521,335
3,578,232
4,161,384
3,578,232
Corporate/Wholesale Banking
6,206,052
6,000,398
5,816,960
6,206,052
5,816,960
Retail Banking
7,021,272
6,743,853
5,786,386
7,021,272
5,786,386
Other Banking operations
911
1,409
1,138
911
1,138
Unallocated
945,714
1,221,607
872,531
945,714
872,531
Total
18,335,333
17,488,602
16,055,247
18,335,333
16,055,247
Segment Liabilities
Treasury
4,074,266
3,406,295
3,476,144
4,074,266
3,476,144
Corporate/Wholesale Banking
6,056,704
5,922,863
5,600,730
6,056,704
5,600,730
Retail Banking
6,612,359
6,624,970
5,551,810
6,612,359
5,551,810
Other Banking operations
550
14
4
550
4
Unallocated
91,122
70,038
68,687
91,122
68,687
Total
16,835,001
16,024,180
14,697,375
16,835,001
14,697,375
Capital employed:
(Segment Assets - Segment Liabilities)
Treasury
87,118
115,040
102,088
87,118
102,088
Corporate/Wholesale Banking
149,348
77,535
216,230
149,348
216,230
Retail Banking
408,913
118,883
234,576
408,913
234,576
Other Banking operations
361
1,395
1,134
361
1,134
Unallocated
854,592
1,151,569
803,844
854,592
803,844
Total
1,500,332
1,464,422
1,357,872
1,500,332
1,357,872
@
For the above segment reporting, the reportable segments are identified as Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations in compliance with the RBI guidelines.
Statement of Assets and Liabilities of the Group as on March 31, 2020 is given below:
(` in Lakhs)
Particulars
As at 31.03.2020
As at 31.03.2019
Audited
Audited
CAPITAL AND LIABILITIES
Capital
39,853
39,701
Reserves and Surplus
1,442,383
1,310,125
Minority Interest
18,096
8,046
Deposits
15,225,191
13,487,893
Borrowings
1,252,772
870,629
Other Liabilities and Provisions
357,038
338,853
Total
18,335,333
16,055,247
ASSETS
Cash and Balances with Reserve Bank of India
618,254
642,267
Balance with Banks and Money at Call and Short Notice
657,477
363,080
Investments
3,571,539
3,167,570
Advances
12,484,950
11,153,592
Fixed assets
50,481
47,993
Other assets
952,632
680,745
Total
18,335,333
16,055,247
Notes:
1
The above Consolidated Financial Results for the quarter and year ended March 31, 2020 were reviewed by the Audit Committee and subsequently taken on record and approved by the Board of Directors at its meeting held on May 28, 2020. These Results have been subjected to "Audit" by the Statutory Central Auditors of the Bank and an unqualified report has been issued. The figures for the quarter ended March 31, 2019 has been approved by the Bank's Board of Directors, but has not been subjected to audit since the requirement of submission of quarterly consolidated financial results has become mandatory only from April 01, 2019.
2
The Consolidated Financial Results of the Group comprise the audited financial results of The Federal Bank Limited and its subsidiaries viz. Fedbank Financial Services Limited & Federal Operations and Services Limited and its associates viz. IDBI Federal Life Insurance Company Limited & Equirus Capital Private Limited.
3
There has been no material change in the accounting policies adopted during the quarter and year ended March 31, 2020 as compared to those followed for the year ended March 31, 2019.
4
The working results have been arrived at after considering provision for standard assets, including requirements for exposures to entities with Unhedged Foreign Currency Exposures, non-performing assets (NPAs), depreciation on investments, income-tax and other usual and necessary provisions.
5
Other income includes fees earned from providing services to customers, commission from non-fund-based banking activities, earnings from foreign exchange and derivative transactions, selling of third-party products, profit on sale of investments (net), recoveries from advances written off etc.
6
During the quarter ended June 30, 2018, as per RBI Circular, the Bank had exercised the option of spreading the provision for Mark to Market (MTM) losses of ` 5,893.97 Lakhs equally over 4 quarters and accordingly unamortised MTM losses of ` 4,420.48 Lakhs were deferred to be amortised in remaining quarters of FY 2019, which was fully amortised in FY 2019.
7
The Capital Adequacy Ratio is computed on the basis of RBI guidelines applicable on the relevant reporting dates and the ratio for the corresponding previous period is not adjusted to consider the impact of subsequent changes if any, in the guidelines.
8
The Business operations of the Bank are largely concentrated in India and for the purpose of Segment reporting, the bank is considered to operate only in domestic segment, though the bank has its operations in International Finance Service Centre (IFSC) Banking Unit in Gujarat International Finance Tec-city (GIFT). The business conducted from the same is considered as a part of Indian operations.
9
During the quarter and year ended March 31, 2020, the Bank has allotted 386,640 and 7,612,869 equity shares of ` 2 each, pursuant to the exercise of stock options by employees.
10
During the quarter ended September 30, 2019, the Bank has elected to exercise the option permitted under section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019. Accordingly, the Bank has recognised Provision for Income Tax for quarter and year ended March 31, 2020 and re-measured its Deferred tax liability, basis the rate prescribed in the aforesaid section and recognized the effect of change by revising the annual effective income tax rate.
11
In accordance with RBI Circular DBR.No.BP.BC.1/21.06.201/2015-16 on Basel III Capital Regulations dated July 01, 2015 and RBI Circular DBR.No.BP.BC.80/21.06.201/2014-15 dated March 31, 2015 - 'Prudential Guidelines on Capital Adequacy and Liquidity Standards - Amendments', Banks are required to make Pillar 3 disclosure requirements including Leverage Ratio disclosure requirements that are to be made along with the publication of Financial Results. Accordingly, such applicable disclosures have been placed on the website of the Bank which can be accessed at the following link: http://www.federalbank.co.in/regulatory-disclosures. These disclosures have not been subjected to audit or review by the Statutory Central Auditors of the Bank.
12
The SARS-CoV-2 virus responsible for COVID-19 continues to spread across the globe and India, which has contributed to a significant volatility in global and Indian Financial markets and a significant decrease in the global and local economic activities. COVID-19 outbreak was declared as a global pandemic on March 11, 2020 by World Health Organisation. The Government of India had announced a series of lock-down measures on March 24, 2020 which has been extended from time to time up to May 31, 2020. The recent directions from the Government indicates calibrated and gradual withdrawal of lockdown and partial resumption of economic activities, though major economic centres still continue to be under strict lockdown. The extent to which the COVID-19 pandemic will impact the Bank's results will depend on future developments, which are highly uncertain, including among other things, any new information concerning the severity of the COVID-19 pandemic and action to contain its spread or mitigate its impact whether government mandated or elected by the Bank. The Bank's capital and liquidity position is strong and would continue to be the focus area for the Bank during this period.
In accordance with the 'COVID-19 Regulatory Packages' announced by the RBI on March 27, 2020 and April 17, 2020 ('the RBI guidelines'), with regard to providing relief to borrowers' on account of COVID-19 pandemic whose accounts were standard as on February 29, 2020 , the Bank, in accordance with the Board approved policy had offered moratorium on repayment of loan instalments and/or deferment of interest due between March 1, 2020 and May 31, 2020 including relaxation in certain parameters, to all eligible borrowers, without considering the same as restructuring. Further on May 22, 2020, RBI has permitted the Banks to extend such benefits to eligible borrowers for another three months, from June 1, 2020 to August 31, 2020. In accordance with the RBI guidelines, the Bank is required to make provision @ 10% of outstanding advances over two quarters beginning with quarter ending March 31, 2020 in respect of such borrowers whose accounts, though classified as standard as on March 31, 2020, would have become non-performing but for these benefits/relaxations extended as per RBI guidelines. The Bank, as a prudent measure, has made the entire 10% provision amounting to ` 3,026.60 Lakhs in the current quarter.
Further, in addition to the above, as a prudent measure, the Bank has made additional provision of ` 6,303.40 Lakhs as at March 31, 2020 against the likely impact of COVID-19 pandemic in respect of exposure of the Bank to certain specified sectors based on assessment of presently available information. The entire provision of ` 9,330.00 Lakhs in respect of COVID-19 impact is grouped under Other liabilities and provisions in the Balance sheet of the Bank.
13
The Reserve Bank of India, vide its circular dated April 17, 2020, has decided that banks shall not make any further dividend payouts from profits pertaining to the financial year ended March 31, 2020 until further instructions, with a view that banks must conserve capital in an environment of heightened uncertainty caused by COVID-19 pandemic. Accordingly, the Board of Directors of the Bank have not recommended any dividend for the year 2019-20 (Previous Year 70% i.e ` 1.40/- per Equity Share).
14
During the quarter and year ended March 31, 2020, the Bank has invested ` 5,920.00 Lakhs and ` 6,420.00 Lakhs respectively in its subsidiaries (` 500.00 Lakhs in Preference shares with face value ` 10 each of Federal Operations and Services Limited & ` 5,920.00 Lakhs in equity shares with face value ` 10 each of Fedbank Financial Services Limited) and ` Nil and ` 66.61 Lakhs in Preference shares with face value ` 5 each respectively in its associate Equirus Capital Private Limited.
15
The figures of the last quarter are the balancing figures between the audited figures in respect of the full financial year and the published year to date figures upto the end of third quarter of the respective financial year.
16
Previous period's / year's figures have been regrouped / reclassified, where necessary to conform to current period's classification.
SHYAM SRINIVASAN
Kochi
MANAGING DIRECTOR & CEO
May 28, 2020
(DIN: 02274773)
THE FEDERAL BANK LIMITED
REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101
(CIN: L65191KL1931PLC000368)
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2020
(` in Lakhs)
Year ended
March 31, 2020Year ended
March 31, 2019Cash Flow from Operating Activities
Net Profit before taxes
208,739
199,387
Adjustments for:
Depreciation on Group's Property
12,573
12,226
Depreciation on Investments
6,350
9,909
Amortisation of Premium on Held to Maturity Investments
7,401
5,289
Provision for Non Performing Investments
537
2,028
Provision / Charge for Non Performing Assets
101,249
63,395
Provision for Standard Assets
11,181
10,007
(Profit)/ Loss on sale of fixed assets (net)
(517)
(1,820)
(Income) / Loss From Associate
(3,771)
(3,556)
Provision for Restructured assets
(1,030)
-
Provision for Other Contingencies
435
426
343,147
297,291
Adjustments for working capital changes:-
(Increase)/ Decrease in Investments [excluding Held to Maturity Investments]
40,226
203,966
(Increase)/ Decrease in Advances
(1,432,606)
(1,915,898)
(Increase)/ Decrease in Other Assets
(261,437)
(71,660)
Increase/ (Decrease) in Deposits
1,737,297
2,290,883
Increase/ (Decrease) in Other liabilities and provisions
16,536
54,390
100,016
561,681
Direct taxes paid
(70,107)
(71,708)
Net Cash Flow from / (Used in) Operating Activities
373,056
787,264
Cash Flow from Investing Activities
Purchase of Fixed Assets
(15,446)
(14,417)
Proceeds from Sale of Fixed Assets
903
2,153
Investment in Subsidiary
(6,420)
(500)
Investment in Associate
(67)
(685)
(Increase)/ Decrease in Held to Maturity Investments
(448,227)
(324,553)
Net Cash generated / (Used in) Investing Activities
(469,257)
(338,002)
Cash Flow from Financing Activities
Proceeds from Issue of Share Capital
152
258
Proceeds from Share Premium
8,257
15,674
Increase / (Decrease) in Minority Interest
9,137
6,375
Proceeds from Issue of Subordinate Debt
30,000
-
Increase/(Decrease) in Borrowings (Excluding Subordinate Debt)
352,143
(362,097)
Dividend Paid (Including Tax on Dividend)
(33,541)
(23,871)
Net Cash generated from financing Activities
366,148
(363,661)
Effect of exchange fluctuation on translation reserve
437
225
Increase/(Decrease) in Cash and Cash Equivalents
270,384
85,826
Cash and Cash Equivalents at the beginning of year
1,005,347
919,521
Cash and Cash Equivalents at the end of year
1,275,731
1,005,347
Note:
Cash and Cash Equivalents comprise of Cash in hand (including foreign currency notes), Balances with Reserve Bank of India, Balances with banks and money at call and short notice.
SHYAM SRINIVASAN
Kochi
MANAGING DIRECTOR & CEO
May 28, 2020
(DIN: 02274773)
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDFR FLFIVEVIAFII
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