A) Balancing of Accounts and Reconciliation

i. In certain Branches, the balancing / reconciliation of control accounts with subsidiary ledgers is in progress.

ii. Initial matching of debit and credit outstanding of old entries in Inter Branch Account (IBR DD), pertains prior to CBS System. Adjustments (including old outstanding entries) have been done up to 31.03.2023 and reconciliation is in progress.

iii. Reconciliation of Drafts payable, Debit Note Receivable/ Payable, RTGS/NEFT (Suspense) is in progress. Provisions have been made as per RBI norms. Reconciliation of Nostro accounts has been done as on 31.03.2023.

In the opinion of the management, the impact of the above para (i) to (iii), if any, on the Profit & Loss Account and Balance Sheet though not quantifiable, will not be material.

iv. In terms of Reserve Bank of India guidelines, segregation of Debit and Credit entries in Inter Branch Accounts pertaining to the period up to 30.09.2022 and remained outstanding as on 31.03.2023 has been done which has resulted in either net Debit in some heads or net credit in other heads. Provision is to be made in respect of Net Debit Entries outstanding for period exceeding 6 months. Similar guidelines have been followed for imprest clearing Account also.

In Inter Branch Account there is net credit balance hence no provision is required to be made.

v. Credit entries outstanding in Blocked Unclaimed Deposit Account (New Blocked account) for the period

01.04.2012 to 31.03.2013 amounting to Rs 1.32 lakh have been transferred to DEAF account during the year ended March 2023.

Further, the unreconciled entries pertaining to more than 10 years is transferred to DEAF account on quarterly basis.

As on 31.03.2023, un-reconciled credit entries amounting to Rs. 54.98 lakh pertaining to the period from

01.04.2013 to 31.03.2016 are outstanding for more than 3 years and hence these entries were transferred to Blocked Unclaimed Deposit Account (New Blocked account).

B) Legal formalities are yet to be completed in respect of 2 Bank's properties having original cost of Rs 2.87 crore and Revaluation amount of Rs. 62.98 crore as on 31.03.2023. (Previous year 2 Bank's properties having original cost of Rs 2.87 crore and Revaluation amount of Rs. 62.98 crore).

*Capital Adequacy Ratio (BASEL III) is arrived after considering the Net present value (NPV) of Non-Interest bearing Recapitalization Bonds infused as capital by the Govt. of India during FY 2020-21 & 2021-22. Further, the effect of proposed dividend has been reckoned in determining capital funds in the computation of capital adequacy ratio as at 31^st March 2022 and 31^st March 2023.

b) Draw down from Reserve

A sum of Rs. Nil during Financial year ended 31.03.2023 has been drawn from the General Reserve on account of payment to the claimant of old entries.

Sale and transfers to/from HTM category

i) During the year ending March-2023, Bank has shifted Govt. Securities amounting to Rs.3980.00 crore Face Value (Rs.3995.06 crore Book Value) from Held For Trading to Available For Sale category where as no security has been transferred from Available for Sale to Held to Maturity category. Gain on shifting of securities from HTM to AFS was not booked upfront and gain/loss was recognized on sale of such securities during the year.

ii) The value of shifting/ sales from HTM category (excluding onetime shifting at the beginning of year and sale under pre-announced OMO auctions) during the year does not exceed 5% of the book value of investments held in HTM category at the beginning of the year.

Non-SLR investment portfolio

i) Non-performing non-SLR investments

Divergence in asset classification and provisioning

As per RBI Master Direction No DOR.ACC.REC.No.46/21.04.018/2021-22 dated 30.08.2021 (updated on 20.02.2023) on financial statements - presentation and disclosure, divergence in the asset classification and provisioning, Banks should disclose divergences in the asset classification and provisioning, if either or both of the following conditions are satisfied:

(a) The additional provisioning for NPAs assessed by RBI exceeds 10 percent of the reported profit before provisions and contingencies for the reference period, and

(b) The additional Gross NPAs identified by RBI as part of its supervisory process exceed 15 percent of the published incremental Gross NPAs for the reference period.

Divergences are within threshold limits in the Bank as specified above. Hence, no disclosure is required with respect to RBI' Annual Supervisory Process for FY 2021-22.

(ii) In accordance with RBI circular no.DOR.STR.REC.51/21.04.048/2021-22 dated September 24, 2021, in respect of the details of loans transferred/acquired during the period ended March 31, 2023, the Bank has not transferred and acquired NPA and Special Mention Account (SMA).

Disclosure under Resolution Framework for COVID-19-related Stress

i) Details of resolution plan implemented under the Resolution Framework for COVID-19 related stress as per RBI Circular dated August 6, 2020 (RF 1.0) and May 05,2021 (RF 2.0)are given below:-

Disclosures on risk exposure in derivatives Qualitative disclosures

Bank has not entered into any derivative transactions in respect of Forward rate agreement/Interest Rate Swap Exchange Traded Interest Rate Derivatives during the year 2022-23. Accordingly, qualitative and quantitative disclosures under RBI guidelines with respect to derivative transactions are not required.

Bank is complying with the reporting requirements of statutory authorities in relation to IND-AS. Post issuance of discussion paper on ECL by the regulator, Bank will be appointing a consultant with considerable experience in the field of implementation of I ND-AS. Further, it is also planned to give specialized training to staff so as to build relevant expertise, which would ultimately result in smooth implementation of IND-AS as and when implemented.

Disclosure of facilities granted to directors and their relatives : Not Applicable to bankDisclosure on amortization of expenditure on account of enhancement in family pension of employees of banks

The estimated additional Pension liability on account of revision in family pension was Rs.236.84 crore. RBI vide its Circular RBI/2021-22/105 DOR.ACC.REC.57/21.04.018/2021-22 dated 4^th October 2021, has permitted all member Banks of Indian Banks Association to amortize the said additional liability over a period not exceeding five years beginning with the financial year ending 31^st March 2022, subject to a minimum of 1/5^thof the total amount being charged every year. The Bank will amortize the said liability over a period, not exceeding 5 years commencing from the financial year ending 31^stMarch 2022, subject to a minimum of Rs.47.37 crore every year. Accordingly, the Bank has charged an amount of Rs.47.37 crore to the Profit & Loss account for the current financial year ended 31^st March 2023 and the balance unamorti'zed amount of Rs.142.10 crore as on 31^st March 2023, has been carried forward.

Disclosure in terms of RBI circular no.DOR.STR.REC.91/21.04.018/2021-22 dated December 13, 2022:15.1 AS-5 Net Profit or Loss for the period, prior period items and changes in accounting policies

15.1.1 There are no material prior period items included in Profit & Loss Account required to be disclosed as per AS-5 read with RBI guidelines except those disclosed elsewhere in the notes.

15.2 AS-9 Revenue Recognition

Certain items of income are recognized on realization basis as disclosed at point no. 8 - "Revenue Recognition" of Schedule 17 - Significant Accounting Policies. However, in terms of RBI guidelines, the said income is not considered to be material.

15.3 AS-10 Property Plant & Equipment

The bank had last revalued immovable properties during the FY 2021-22, based on the reports obtained from the external independent valuer. The closing balance of revaluation reserve as on 31.03.2023 (Net of amount transferred to revenue reserve) is Rs.912.22 crore (Previous year Rs.919.90 crore).

Out of 59 properties owned by bank (excluding lease hold properties having a lease term up to 30 years), cost of 38 properties are segregated into land and superstructure.

15.4 AS 15 - Employees Benefit

Provisions for Pension, Gratuity, Leave Encashment and Other long term benefits have been made in accordance with the Revised Accounting Standard (AS - 15) Employees Benefits issued by the ICAI.

The summarized position of post-employment benefits recognized in the Profit & Loss A/c and Balance Sheet is as under:

Note: For the purpose of segment reporting in terms of AS-17 of ICAI and as prescribed in RBI guidelines, the business of the Bank has been classified into four segments i.e. a) Treasury Operations, b) Corporate/Wholesale Banking, c) Retail Banking (further classified into Digital Banking and Other retail banking and d) Other Banking Operations.

Segmental Revenue, Results, Assets & Liabilities in respect of Corporate / Wholesale and Retail Banking segment have been bifurcated on the basis of exposure to these segments.

Part B Geographical Segment:

Since the Bank does not have any overseas branch, reporting under Geographic Segment is not applicable.

15.8 AS 21 - Consolidated Financial Statement

The Bank does not have any subsidiary/associate and as such AS 21 is not applicable.

15.9 AS 22 - Accounting for Taxes on Income

15.9.1 The Bank has accounted for Income Tax in compliance with Accounting Standard-22 'Accounting for taxes on Income' issued by ICAI

15.9.3 Provision for Income Tax and Deferred Tax held by the Bank is considered adequate taking into account the opinion of legal experts and favourable judicial pronouncements.

15.9.4 Review of Deferred Tax Assets has been carried out based on Bank management's estimate of possible tax benefits against timing difference in accordance with Accounting Standard - 22 "Accounting for Taxes on income" issued by The Institute of Chartered Accountants of India and Net Deferred Tax Assets of Rs.1844.25 crore is recognized as at 31st March 2023 (Rs.2168.34 crore as at 31st March 2022).

15.9.5 No provision has been considered necessary in respect of disputed demands of Income aggregating to Rs.709.31 crore (Previous year Rs.541.82 crore) in view of decisions of appellate authorities / judicial pronouncements / opinions of legal experts.

15.9.6 The Government of India, vide the Taxation Laws (Amendment) Act, 2019, inserted section 115BAA in the Income Tax Act 1961 w.e.f. April 1, 2019. The Bank has evaluated the options available under section 115BAA of The Income Tax Act, 1961 and opted to continue to recognize the Taxes on Income for the year ended 31.03.2023 as per the earlier provisions.

15.10 AS 23 - Accounting for Investments in Associates in consolidated Financial Statements

The Bank does not have any subsidiary/associate and as such AS 23 is not applicable.

15.11 AS 26 - Intangible Assets

The application software in use in the Bank has been developed in house and has evolved over a period of time. Hence, the costs of software is essentially part of Bank's operational expenses like wages etc. and as such are charged to the respective heads of expenditure in the Profit and Loss Account.

15.12 Accounting Standard 28 - Impairment of Assets

Fixed Assets possessed by Bank are treated as 'Corporate Assets' and not 'Cash Generating Units' as defined by AS-28. In the

opinion of the Management, there is no impairment of the ' Fixed Assets' of material amount as of 31.03.2023, requiring recognition in terms of AS-28 issued by the ICAI. The impairment of other assets has been provided for as per Prudential Norms prescribed by the Reserve Bank of India.

15.13 Accounting Standard 29 - Provisions, Contingent Liability and Contingent Assets

15.13.1 As per AS-29 - Provisions, Contingent Liabilities and Contingent Assets, issued by the Institute of Chartered Accountants of India, the Bank recognizes no provision for -

a) Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Bank, or

b) Any present obligation from the past events but is not recognized because

• It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

• A reliable estimate of the amount of obligation cannot be made.

Such obligations are recorded as contingent liabilities. These are assessed continually and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.

15.14 Other significant accounting policies has been disclosed at the appropriate places in the Notes forming part of the accounts.

16. Disclosures in Terms of MSMED Act 2006

Guideline given in Micro, Small and Medium Enterprises Development Act 2006 have been complied with for purchases made during FY 2022-23 and payments have been made to the vendors in time as per Act. Since there had been no delay in payment, therefore no penal interest had been paid during FY 2022-23.

17. The LCR is computed with existing methodology for the 90 days average period (quarter) for the period ended 31^st March, 2023 and arrived at 206.19%. The management has approved conservative methodology i.e considering total outstanding deposit balance for wholesale funding as outflow instead of wholesale deposit having residual maturity of 30 days. Based on the new methodology, the bank has arrived LCR at 113.56% as at 31^st March, 2023 i.e for a day. Since the Bank has not used the same methodology for the previous 90 days, it is not comparable with previously reported LCR numbers. The comparative figure for previous quarters/ year (90 days average) could not be carried out due to voluminous & complexity of data involved. However, revised methodology is being used for LCR calculation henceforth.

18. In terms of Reserve Bank of India (RBI) circular, Banks are required to make Pillar 3 disclosures including Leverage ratio, Liquidity coverage ratio and Net Stable funding Ratio (NSFR) under the Basel III capital regulations. These Disclosures are made available on the Bank's website:https://puniabandsindbank.co.in. The Disclosures have not been subjected to audit by Statutory Central Auditors of the Bank.

19. As per the Reserve Bank of India directions for initiating Insolvency Process- Provisioning Norms, vide letter No. DBR. No. BP:15199/21.04.048/2016-17 dated June 23, 2017, and DBR.No.BP.1907/21.04.048/2017-18 dated August 28, 2017, the bank is holding the provisioning of Rs.265.44.crores (Previous Year - Rs.281.56 crores) as against the balance outstanding of Rs.265.44 crores (Previous Year - Rs.281.56 crores) as on 31^st March, 2023 in respect of NPA borrowal accounts referred in aforesaid circular.

21. The bank has funded exposure of Rs.87.49 crore in one account which is under litigation and Hon'able High court has granted

stay on downgrading. The bank has made provisions of 40% for the account which is higher than the required provisions as per IRAC norms.

22. Pending settlement of the Bipartite agreement on wage revision (due from November 2022), an adhoc amount of Rs.59.44 crore has been provided upto 31.03.2023.

23. The figures of the previous year have been re-grouped / re-arranged wherever necessary except where information was not available.