Bank of baroda

C.
Others:
Profit for the year 2002-03 included prior period income aggregating to Rs. 481.20 million. The exact period to
which this income relates is not ascertainable.

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BANK OF BARODA
ANNEXURE – A-VII
MATERIAL NOTES ON ACCOUNTS :
YEAR ENDED 31
st
 MARCH 2001
1.
Investments:
The investments in India which, upto the previous year-end, were classified as current, have as per guidelines of
RBI issued per its Circular dated 10.10.2000, been classified into “Held to Maturity” (HTM), “Available for Sale”
(AFS) and “Held for Trading” (HFT). The impact of such classification on the Profit and Loss Account is as under:
1.1
Interest on SLR securities and Government guaranteed securities which, upto the previous year-end, was
being accrued, is not recognized on such securities where the interest / principal is in arrears. This has
resulted in reduction of profit by Rs. 195.10 million, which includes Rs.118.80 million accrued as income upto
the previous year-end on such investments, which has also been derecognised.
1.2
Depreciation on non-performing investments in debentures / bonds which, upto the previous year-end, was
being set off against appreciation in debentures / bonds is not set off during the year. Had the same been
accounted as per past practice, the profit would have been higher by Rs.87.9 million.
1.3
Unrealized gain on account of appreciation in “Held for Trading” investments is recognized in the Profit and
Loss Account during the year, but for which the profit for the year on this account would have been lower by
Rs. 6.2 million, (other than interest accrued and recognized as income on such investments, in respect of
which amount has not been separately ascertained).
1.4
The guidelines of the Reserve Bank of India applicable with effect from 30.09.2000 vide circular No. DBOD
No. BP.BC.32/21.04.048/2000-2001 dated 16.10.2000 were implemented with effect from 31.01.2001 pursuant
to resolution of the board of directors on 24.01.2001.
2.
Voluntary Retirement Scheme:
Pursuant to the Voluntary Retirement Scheme (VRS) introduced during the year, the management accepted the
offer of all eligible employees who had opted / offered for voluntary retirement. In terms of the VRS, such employees
were entitled to receive compensation by way of ex-gratia payment, besides their entitlement to other contractual
terminal benefits, including towards accumulated leave encashment.
Considering the objective of the enduring pecuniary benefit, consequent upon personnel cost reduction the benefit
of which, in the opinion of the management, would accrue over a period of five years (including the year ended
31.3.2001), the total compensation (Rs. 5030.2 million), and the additional liability (Rs. 3521.3 million) towards
other terminal benefits is sought to be amortized over the said period. Accordingly, an amount of Rs. 1710.30
million has been charged to the Profit and Loss Account for the year; and the amount of Rs. 3420.6 million has
been included under the head “Other Assets”.
3.
Depreciation:
Depreciation on computers, which upto the year ended 31.3.2000, was being provided on Written Down Value
basis at the rate of 40% as prescribed in Schedule XIV to the Companies Act, 1956, is computed on straight line
basis at 33.33% p.a. from the year of acquisition thereof, including for computers acquired prior to 31.3.2000. But
for the change in the method as aforesaid, the profit for the year and the related fixed assets would have been
higher to the extent of Rs. 65.50 million.

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