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CS Professional · Banking and Insurance - Laws and Practice · Analysis of Financial Statements of Banks

Vindhya Bank has Interest Earned of Rs 1,000 crore, Other Income of Rs 150 crore, Interest Expended of Rs 600 crore, Operating Expenses of Rs 250 crore and Provisions and Contingencies of Rs 120 crore. It has an opening profit balance of Rs 20 crore brought forward. What is the net profit for the year and the amount available for appropriation?

Net profit is Rs 180 crore and the amount available for appropriation is Rs 200 crore. Income of 1,150 less interest and operating expenses of 850 gives operating profit of 300; deducting provisions of 120 leaves 180, and adding the Rs 20 crore brought forward gives 200.

  1. ANet profit Rs 180 crore; available Rs 200 croreCorrect
  2. BNet profit Rs 300 crore; available Rs 320 crore
  3. CNet profit Rs 180 crore; available Rs 180 crore
  4. DNet profit Rs 200 crore; available Rs 220 crore

Explanation

Total income = 1,000 + 150 = 1,150. Total expenditure before provisions = 600 + 250 = 850, giving operating profit 300. Net profit = 300 - 120 = 180. Adding the brought-forward 20 gives 200 available for appropriation. Option with 300 ignores provisions.

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