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Directors Report of Central Bank of India

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Annual Report of the Bank along with the Audited statement of Accounts, the Profit and Loss accounts and the cash flow statement for the year ended March 31,2015.

1. PERFORMANCE HIGHLIGHTS

- Total Business of the Bank increased by Rs. 27149 crore to Rs. 450539 crore from Rs. 423390 crore in previous year, registering y-o-y growth of 6.41 per cent.

- Total Deposits increased by Rs.15503 crore to Rs. 255572 crore, registering y-o-y growth of 6.46 per cent.

- Total Advances of the Bank grew by Rs. 11646 crore to Rs. 194967 crore, registering y-o-y growth of 6.35 per cent. Operating Profit increased to Rs. 3559 crore from Rs. 3238 crore in FY 2013-14, registering y-o-y growth of 9.91 per cent.

- Net Profit stood at Rs. 606 crore in 2014-15 as against net loss of Rs. 1263 crore in FY 2013-14, thereby registering y-o-y growth of 147.98 per cent.

- Capital Adequacy Ratio (as per Basel-II) stood at 11.89 per cent with Tier I at 8.46 percent as against 11.96 per cent in previous year. Capital Adequacy Ratio (as per Basel III) stood at 10.90 per cent with Tier I at 8.05 percent as against 9.87 per cent in previous year.

- Net worth increased to Rs. 15643 crore from Rs. 13918 crore.

- Gross NPA of the Bank increased by Rs. 373 crore to Rs. 11873 crore from Rs. 11500 crore in previous year. In percentage term Gross NPA has decreased to 6.09 per cent in FY 2014-15 from 6.27 per cent in last year.

Net NPA increased to Rs.6807 crore from Rs.6649 crore in previous year. Net NPA percentage has decreased to 3.61 per cent from 3.75 per cent in previous year.

- Provision Coverage Ratio (PCR) improved to 55.16 per cent from 50.68 per cent in March 2014.

Net Interest Margin (NIM) improved to 2.79 per cent from 2.73 per cent in FY 2013-14.

- Business per Employee increased to Rs. 1138 lakh from Rs. 1025 lakh in previous year.

Return on Assets (ROA) is 0.21 per cent for the current financial year.

- Credit to Priority Sector increased to Rs. 75997 crore from Rs. 68652 crore in previous year, recording y-o-y growth of 10.70 per cent.

- Agriculture Advance of the Bank increased to Rs. 35,957 crore from Rs. 35,387 crore in FY 2013-14 registering y-o-y growth of 1.61 per cent.

- Under the micro credit & other (credit upto Rs. 50,000 per borrower), Bank has extended credit of Rs. 206 crore.

- Advances to Micro & Small Enterprises (MSE) increased to Rs. 26503 crore during the year under review from Rs. 21515 crore in previous year.

- Education Loan grew by 15.50 per cent during the year and the total loan reached to Rs. 3442 crore.

- Bank has established 46 Rural Self Employment and Training Institute (RSETIs) in 9 States of the country viz. Madhya Pradesh(18), Bihar(9), Maharashtra(6), Uttar Pradesh(5), West Bengal(3), Chhattisgarh(2), Rajasthan(1), Orissa(1) and Assam(1). During the year 2014-15, the RSETIs conducted 891 training programmes and imparted training to 24290 candidates. Out of this, 14816 (i.e.61%) trainees were settled through bank credit, wage settlement and self-finance.

- Bank has 3 RRBs as on 31st March 2015 in 3 states covering 47 districts with a network of 1622 branches.

- Under Financial Inclusion Bank has covered 4,330 villages with population above 2000 and 18,371 villages with population below 2000. Bank has covered all these villages through 6,382 BC Agents. We have also opened 238 Branches in unbanked rural centres. Bank has opened all its 3677 Ultra Small Branches attached to 1427 Base Branches. Bank has opened 146.71 lacs Basic Saving Bank Deposit Account (BSBDA) accounts through its BCs and Branches. Total balance in these accounts is 763.99 crores as on 31st March, 2015.

- Under Pradhan Mantri Jan Dhan Yojana our Bank has opened 57.35 lacs BSBD accounts and increased business with a deposit of Rs.317.82 Crores.

- The corporate credit of the Bank decreased to Rs. 97,608 crore from Rs. 97,568 crore in previous year registering y-o-y reduction of 0.04 per cent.

The retail credit grew by 21.27 per cent from Rs. 28,811 crore in FY 2013-14 to Rs. 34,939 crore in FY 2014-15.

Total earning from Bancassurance business is Rs. 25.27 crore for FY 2014-15.

- As on 31st March 2015, Bank has a network of 4689 branches, 3677 Ultra - Small Branches (USBs), 4835 ATMs 29 Satellite Offices & 4 Extension Counters across the country.

2. INCOME & EXPENDITURE

Details of income and expenditure for the period 2014-15 are given hereunder: Rs. In Crores

31.03.2015 31.03.2014 Variation %

1 INTEREST INCOME 26409 24427 1982 8.11

-Advances 19517 18620 897 4.82

-Investments 6707 5764 943 16.36

-Others 185 43 142 330.23

2 OTHER INCOME 1894 1923 (29- (1.51)

3 TOTAL INCOME (1 2) 28303 26350 1953 7.41

4 INTEREST EXPENDED 19162 17933 1229 6.85

- Deposits 17520 16374 1146 7.00

- Others 1642 1559 83 5.32

5 OPERATING EXPENSES 5582 5179 403 7.78

- Establishment 3825 3537 288 8.14

- others 1757 1642 115 7.00

6 TOTAL EXPENSES (4 5) 24744 23112 1632 7.06

7 SPREAD (1-4) 7247 6494 753 11.60

8 OPERATING PROFIT (3-6)3559 3238 321 9.93

9 PROVISIONS-NPA/INVST./ OTHERS 2669 4233 (1564) (36.95)

10 PROVISIONS FOR TAX 284 268 16 5.97

11 NET PROFIT 606 (1263) 18691 147.98

Interest Income grew by 8.11 per cent during the year

Interest expenses on Deposits increased by 7.00 per cent to Rs. 17520 crore in March 2015 from Rs. 16374 crore in previous year.

Expenses on employees increased by Rs. 288 crore during the year to Rs. 3825 crore from Rs. 3537 crore in previous year.

3. PROVISIONS

Details of Total Provisions of Rs.2953 crore charged to the Profit and Loss Account during the year 2014-15 vis-a-vis previous year are detailed as under:

(Rs. in crore)

31.03.2015 31.03.2014 Variation

Provisions for Standard Assets 39 (7) 46

Provisions for NPAs 2610 3989 (1379)

Provision on Investments (21) 258 (279)

Provisions for Taxes 284 268 16

Others 41 (7) 43

TOTAL 2953 4501 (1548)

4. PROFITABILITY RATIO

(In percentage)

31.03.2015 31.03.2014

Cost of Deposits 7.22 7.24

Cost of Funds 7.34 7.37

Yield on Advances 10.75 10.79

Yield on Investments 8.22 7.84

Net Interest Margin 2.79 2.73

Cost Income Ratio 61.07 61.53

5. BANKING RATIOS

(In percentage)

2014-15 2013-14

Interest Income to Average Working Fund (AWF) 9.29 9.18

Non-Interest Income to AWF 0.67 0.72

Operating Profit to AWF 1.25 1.22

Return on Average Assets 0.21 --

Business Per Employee (Rs. in lakh) 1138 1025

Net Profit per Employee (Rs. in lakh) 153 --

6. CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)

The components of Capital Adequacy Ratio were as under:

31.03.2015 31.03.2014

Basel-II Basel-III Basel-II Basel-III

Tier-I 8.46 8.05 8.12 7.37

Tier-II 3.43 2.85 3.84 2.50

Capital Adequacy Ratio 11.89 10.90 11.96 9.87

7. NET PROFIT & DIVIDEND

The Bank earned Net Profit of Rs. 606 crore for the financial year 2014-15. The Board of Directors are pleased to recommend a dividend @ 5 per cent on the Equity Share Capital i.e. Rs. 0.50/- per equity share of Rs.10/- each.

8. CHANGES IN THE BOARD DURING THE YEAR

During the year under review, the following changes took place in the Board of Directors of the Bank:

- Shri Guman Singh ceased to be the Part-Time Non-official Director of the Bank w.e.f. August 08, 2014 consequent upon expiry of his term on August 07, 2014.

- Shri Animesh Chauhan ceased to be the Executive Director of the Bank w.e.f. 31st December, 2014 upon elevation as Managing Director & Chief Executive Officer of Oriental Bank of Commerce.

- Prof. N. Balakrishnan, who was elected as Shareholder Director of the Bank under section 9(3)(i) of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 for a period of three years from January 10, 2012 has ceased to be the Director of the Bank w.e.f. close of working hours on January 09, 2015 consequent upon completion of his tenure.

The Board places on record its appreciation of valuable contribution extended by Shri Guman Singh, Shri Animesh Chauhan and Prof. N. Balakrishnan who ceased to be the directors of the Bank during Financial Year 2014-15.

9. WHISTLE BLOWER POLICY

Bank follows Central Vigilance Commission Guidelines on Whistle Blower complaints under Public Interest Disclosure and Protection of Informers (PIDPI) resolution. Bank also has a web based portal in the name of "Cent Vigil" to facilitate reporting malpractices by employees and directors without revealing their identities which would be known to the Chief Vigilance Officer only. Directors and Employees may also approach Chairman of the Audit Committee on need basis. This helps to curb malpractices, prevent frauds and boost up morale of the employees.

10. DIRECTORS'' RESPONSIBILTY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31,2015;

- The applicable accounting standards have been followed along with proper explanation relating to material departure, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied;

- Reasonable and prudent judgement and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31,2015;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India ; and

- The accounts have been prepared on a going concern basis.

- Internal Financial Control are adequate and were operating effectively.

- Proper systems have been devised to ensure compliance with the provisions of all applicable laws and these systems were adequate and operating effectively.

11. CORPORATE GOVERNANCE

The Board of the Bank is committed to adapt Corporate Governance practices in letter and spirit. The Bank has adopted well documented system and practice on Corporate Governance.

12. ACKNOWLEDGEMENT

The Board of Directors places on record its gratitude to the Government of India, Reserve Bank of India and the Security Exchange Board of India for their valuable guidance and support. The Board acknowledges with gratitude the unstinted support and faith of its customers and shareholders. The Board wishes to place on record its appreciation of the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of the Board of Directors Sd/-

Place : Delhi Rajeev Rishi

Date : May 25, 2015 Chairman & Managing Director


Mar 31, 2014

The Directors have pleasure in presenting the Annual Report of the Bank along with the Audited statement of Accounts, the Profit and Loss accounts and the cash fow statement for the year ended March 31, 2014.

1. PERFORMANCE HIGHLIGHTS

- Total Business of the Bank increased by Rs. 21118 crore to Rs. 423390 crore from Rs. 402272 crore in previous year, registering y-o-y growth of 5.25 percent.

- Total Deposits increased by Rs.14031 crore to Rs. 240069 crore, registering y-o-y growth of 6.21 per cent.

- Total Advances of the Bank grew by Rs. 7087 crore toRs. 183321 crore, registering y-o-y growth of 4.02 per cent.

- Operating Profit increased to Rs. 3238 crore from Rs. 3173 crore in FY 2012-13, registering y-o-y growth of 2.05 per cent. However, the Bank incurred Net Loss of Rs. 1263 Crore in the financial year ended 31st March, 2014 due to higher provisions on NPAs.

- Capital Adequacy Ratio (as per Basel-II) stood at 11.96 per cent with Tier I at 8.12 percent as against 11.49 per cent in previous year. Capital Adequacy Ratio ( as per Basel III) stood at 9.87 per cent with Tier I at 7.37 percent

- Net worth increased to Rs. 13918 crore from Rs. 13443 crore.

- Gross NPA of the Bank increased by Rs. 3044 crore to Rs. 11500 crore From Rs. 8456 crore in previous year. In percentage term Gross NPA increased to 6.27 per cent in FY 2013-14 from 4.80 per cent in last year.

- Net NPA increased to Rs.6649 crore from Rs.4988 crore in previous year. Net NPA percentage increased to 3.75 per cent from 2.90 per cent in previous year.

- Provision Coverage Ratio (PCR) increased to 50.68 per cent from 47.75 per cent in March 2013.

- Net Interest Margin (NIM) improved to 2.73 per cent from 2.65 per cent in FY 2012-13.

- Business per Employee reduced to Rs. 1025 lakh from Rs. 1067 lakh in previous year.

- Return on Assets (ROA) is negative for the financial year 2013-14 as the Bank incurred losses.

- Credit to Priority Sector increased to Rs. 68648 crore from Rs. 51259 crore in previous year, recording y-o-y growth of 33.92 per cent.

- Agriculture Advance of the Bank increased to Rs. 35382 crore from Rs. 24658 crore in FY 2012-13 registering y-o-y growth of 43.49 per cent.

- Under the micro credit & other (credit up to Rs. 50,000 per borrower), Bank has extended credit of Rs. 261 crore.

- Advances to Micro & Small Enterprises (MSE) increased to Rs. 21515 crore during the year under review from Rs. 17300 crore in previous year.

- During the year 65939 new Self Help Groups (SHGs) were formed, out of which 60278 SHGs have been credit-linked.

- Under the Government Sponsored Programmes, Bank has provided assistance to 31658 NRLM/SGSY beneficiaries, 13195 SJSRY beneficiaries & 7474 PMEGP borrowers during the year 2013-14.

- Bank has extended loan of Rs. 20953 crore to the borrowers belonging to the weaker section of the society.

- Education Loan grew by 16.09 per cent during the year and the total loan reached to Rs. 2980 crore.

- Bank has established 46 Rural Self Employment and Training Institute (RSETI) across India. During the year 2013-14, the RSETIs conducted 677 training programmes and imparted training to 18837 candidates. Out of this, 10550 (56%) trainees were linked to Bank''s credit.

- At the beginning of the year, the Bank had 5 sponsored Regional Rural Banks (RRBs) covering 54 Districts with a network of 1799 Branches, out of which 2 RRBs were merged with other RRBs, sponsored by other Banks. As a result now we have 3 RRBs as on 31st March, 2014 in 3 States covering 46 Districts with a network of 1609 Branches.

- Under Financial Inclusion Bank has covered 4330 villages with population above 2000 and 6743 villages with population below 2000. Bank has covered all these villages through 5588 BC Agents. Bank has opened all its 3677 Ultra Small Branches. Bank has opened 92.27 lac Basic Saving Bank Deposit Accounts through BCs and Branches up to 31st March, 2014.

- The corporate credit of the Bank decreased to Rs. 97613 crore from Rs. 112067 crore in previous year registering y-o-y reduction of 12.90%.

V1 The retail credit grew by 29.73% from Rs. 22209 crore in FY 2012-13 to Rs. 28811 crore in FY 2013-14.

- Total earning from Banc assurance business is Rs. 26.65 crore with y-o-y growth of 8%.

- As on 31st March 2014, Bank has a network of 4573 branches, 29 Satellite Offices & 4 Extension Counters across the country.

- Bank has installed 3628 ATMs till 31st March 2014.

2. INCOME & EXPENDITURE

Details of income and expenditure for the period 2013-14 are given hereunder:

Rs. In Crores 31.03.2014 31.03.2013 Variation %

1 INTEREST INCOME 24427 21861 2566 11.74

- Advances 18620 16922 1698 10.03

- Investments 5764 4779 985 20.61

- Others 43 160 (117) (73.13)

2 OTHER INCOME 1923 1667 256 15.36

3 TOTAL INCOME (1 2) 26350 23528 2822 11.99

4 INTEREST EXPENDED 17933 16123 1810 11.23

- Deposits 16374 14940 1434 9.60

- Others 1559 1183 376 31.78

5 OPERATING EXPENSES 5179 4232 947 22.38

- Establishment 3537 2891 646 22.35

- others 1642 1341 301 22.45

6 TOTAL EXPENSES (4 5) 23112 20355 2757 13.54

7 SPREAD (1-4) 6494 5738 756 13.18

8 OPERATING PROFIT (3-6) 3238 3173 65 2.05

9 PROVISIONS-NPA/ INVST./OTHERS 4233 1853 2380 128.44

10 PROVISIONS FOR TAX 268 305 (37) (12.13)

11 NET PROFIT (1263) 1015 (2278) (224.43)

- Interest Income grew by 11.74 per cent during the year

- Interest expenses on Deposits increased by 9.60 % to Rs. 16374 crore in March 2014 from Rs. 14940 crore in previous year.

- Expenses on employees increased by Rs. 646 crore during the year to Rs. 3537 crore from Rs. 2891 crore in previous year, which includes Rs. 140 crore towards provision for Wage settlement.

3. PROVISIONS

Details of Total Provisions of Rs.4501 crore charged to the profit and Loss Account during the year 2013-14 vis-a-vis previous year are detailed as under:

(Rs. in crore)

31.03.2014 31.03.2013 Variation

Provisions for Standard Assets (7) 91 (98)

Provisions for NPAs 3989 1930 2059

Depreciation/Provision on Investments 258 (163) 421

Provisions for Taxes 268 305 (37)

Others (7) (5) (2)

TOTAL 4501 2158 2343

4. PROFITABILITY RATIO

(In percentage)

31.03.2014 31.03.2013

Cost of Deposits 7.24 7.42

Cost of Funds 7.37 7.53

Yield on Advances 10.79 11.14

Yield on Investments 7.84 7.61

Net Interest Margin 2.73 2.65

Cost Income Ratio 61.53 57.16

- The yield on advances was 10.79 per cent in 2013-14 and yield on investments was 7.84 per cent against 7.60 per cent in 2012-13.

- Net Interest Margin increased to 2.73 per cent from 2.65 per cent in previous year.

- Cost to Income Ratio increased from 57.16 per cent in 2013 to 61.53 per cent in the year under review.

5. BANKING RATIOS

(In percentage)

2013-14 2012-13

Interest Income to Average Working Fund (AWF) 9.18 9.46

Non-Interest Income to AWF 0.72 0.72

Operating profit to AWF 1.22 1.37

Return on Average Assets - 0.44

Business Per Employee (Rs. in lakh) 1025 1067

Net profit per Employee (Rs. in lakh) - 2.83

6. CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR) The components of Capital Adequacy Ratio were as under:

31.03.2014 31.03.2013

Basel-II Basel-III Basel-II Basel-III

Tier-I 8.12 7.37 8.09 Not Applicable

Tier-II 3.84 2.50 3.40 Not Applicable

Capital Adequacy Ratio 11.96 9.87 11.49 Not Applicable

7. NET LOSS

The Bank has incurred loss amounting to Rs.1263 crore during the financial year March 31, 2014. Board of Directors has not recommended any dividend on equity shares and Perpetual Non cumulative Preference Shares due to the net loss incurred by the Bank during the Financial Year ended 31st March, 2014.

8. CHANGES IN THE BOARD DURING THE YEAR

During the year under review, the following changes took place in the Board of Directors of the Bank: 9 Shri S B Rode was appointed as Officer Employee Director w.e.f 02.04.2013.

- Shri Gurbax Kumar Joshi was appointed as Workmen Employee Director w.e.f 10.07.2013.

- Dr. K P Krishnan was appointed as Government Nominee Director of the Bank w.e.f 26.07.2013 in place of Shri Alok Tandon who ceased to be the Government Nominee Director on 25.07.2013.

- Shri Rajeev Rishi was appointed as Chairman & Managing Director of the Bank w.e.f 01.08.2013 in place of Shri Mohan V Tanksale who ceased to be the Chairman & Managing Director on 31.07.2013.

- Shri Animesh Chauhan was appointed as Executive Director of the Bank w.e.f 05.08.2013.

- Shri Malay Mukherjee ceased to be the Executive Director w.e.f 11.12.2013.

- Smt N S Rathnaprabha was appointed Part Time Non-official Director w.e.f 19.12.2013.

- Shri B K Divakara was appointed as Executive Director of the Bank w.e.f 23.01.2014.

- Dr. Saurabh Garg was appointed as Government Nominee Director of the Bank w.e.f 19.02.2014 in place of Dr. K P Krishnan who ceased to be the Government Nominee Director on 18.02.2014.

- Shri Shekhar Bhatnagar was appointed as RBI Nominee Director of the Bank w.e.f 13.03.2014 in place of Shri Salim Gangadharan who ceased to be the RBI Nominee Director on 12.03.2014.

The Board places on record its appreciation of valuable contribution extended by Shri Alok Tandon, Shri M V Tanksale, Shri Malay Mukherjee, Dr. K P Krishnan and Shri Salim Gangadharan who ceased to be the directors of the Bank during Financial Year 2013-14.

9. DIRECTORS'' RESPONSIBILTY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2014;

- The applicable accounting standards have been followed along with proper explanation relating to material departure, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year ended March 31,2014;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India ; and

- The accounts have been prepared on a going concern basis.

10. CORPORATE GOVERNANCE

The Board of the Bank is committed to adapt Corporate Governance practices in letter and spirit. The Bank has adopted well documented system and practice on Corporate Governance.

11. ACKNOWLEDGEMENT

The Board of Directors places on record its gratitude to the Government of India, Reserve Bank of India and the Security Exchange Board of India for their valuable guidance and support. The Board acknowledges with gratitude the unstilted support and faith of its customers and shareholders. The Board wishes to place on record its appreciation of the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of the Board of Directors

Sd/-

Place : Mumbai Rajeev Rishi

Date : May 20, 2014 Chairman & Managing Director


Mar 31, 2013

The Directors have pleasure in presenting the Annual Report of the Bank along with the Audited statement of Accounts, the Profit and Loss accounts and the cash flow statement for the year ended March 31, 2013.

1. PERFORMANCE HIGHLIGHTS

- Total Business of the Bank increased by Rs.55374 crore to Rs.402272 crore from Rs. 346898 crore in previous year, registering y-o-y growth of 15.96 per cent.

- Total Deposits increased by Rs.29865 crore to Rs.226038 crore, registering y-o-y growth of 15.22 per cent.

- Gross Advance of the Bank grew by Rs.25509 crore to Rs.176234 crore, registering y-o-y growth of 16.92 per cent.

- Operating Profit increased to Rs.3173 crore from Rs.2815 crore in FY 2011-12, registering y-o-y growth of 12.72 per cent.

- Net Profit stood at Rs.1015 crore in 2012-13 as against Rs.533 crore in FY 2011-12, registering y-o-y of 90.43 per cent.

- Capital Adequacy Ratio (as per Basel-II) stood at 11.49 per cent as against 12.40 per cent in previous year.

- Net worth increased to Rs.13443.12 crore from Rs.10550.44 crore.

& Gross NPA of the Bank increased by Rs.1183 crore to Rs.8456 crore from Rs.7273 crore in previous year. In percentage term Gross NPA reduced to 4.80 per cent in FY 2012-13 from 4.83 per cent in last year.

Net NPA increased to Rs.4988 crore from Rs.4557 crore in previous year. Net NPA percentage decreased to 2.90 per cent from 3.10 per cent in previous year.

Provision Coverage Ratio (PCR) increased to 47.75 per cent from 40.62 per cent in March 2012.

- Net Interest Margin (NIM) reduced to 2.65 per cent from 2.78 per cent in FY 2011-12.

- Average Business per Employee increased to Rs.973 lakh from Rs.862 lakh in previous year.

- Net Profit per Employee increased to Rs.2.83 lakh from Rs.1.51 lakh in March 2012.

Return on Assets (ROA) improved to 0.44 per cent from 0.26 per cent in March 2012.

Credit to Priority Sector increased to Rs.51252 crore from Rs.40259 crore in previous year, recording y-o-y growth of 27.31 per cent.

- Agriculture Advance of the Bank increased to Rs.24660 crore from Rs.18848 crore in FY 2011-12 registering y-o-y growth of 30.84 per cent.

Under the micro credit & other (credit upto Rs.50,000 per borrower), Bank has extended credit of Rs.233 crore.

Advances to Micro & Small Enterprises (MSE) increased to Rs.17289 crore during the year under review from Rs.13161 crore in previous year.

- During the year 13957 new Self Help Groups (SHGs) were formed, out of which 12397 SHGs have been credit- linked.

Under the Government Sponsored Programmes, Bank has provided assistance to 15047 SGSY beneficiaries, 11384 SJSRY beneficiaries & 1302 PMEGP borrowers during the year 2012-13.

Bank has extended loan of Rs.15521 crore to the borrowers belonging to the weaker section of the society.

Education Loan grew by 19.01 per cent during the year and the total loan reached to Rs.2567 crore.

- Bank has established 46 Rural Self Employment and Training Institute (RSETI) across India.

At the beginning of the year, the Bank had 7 sponsored Regional Rural Banks (RRBs) covering 57 Districts in 7 states with a network of 1806 Branches, out of which 2 RRBs were merged with other RRBs and 2 RRBs sponsored by other Banks merged with our Central Madhya Pradesh Gramin Bank. As on 31.03.2013, we had 5 RRBs spread over 54 districts in 5 states with network of 1799 branches.

Bank was allotted 3728 villages with population above 2000. Bank has covered all these villages with 116 Branches and 3612 BC Agents. Bank has opened all its 3612 Ultra Small Branches.

The corporate credit of the Bank increased to Rs.120328 crore from Rs.98960 crore in previous year registering y-o-y growth of 21.59%.

- The retail credit grew by 31.30% from Rs.16915 crore in FY 2011-12 to Rs.22209 crore in FY 2012-13.

"Cent Combo" - A Combination of Home Loan & Vehicle Loan at attractive Rates and at affordable EMIs and Hassle Free Loan Sanction Process was introduced with lowest EMI of Rs. 896/- per Lakh for Home Loans upto 30 years and lowest EMI of Rs. 1673/- per Lakh for Vehicle Loans upto 84 months. The scheme has been designed keeping the corporate sector employees in view.

- During the year 2012-13, Bank has earned commission of Rs.15.23 crore in life insurance and Rs.9.02 crore in non-life insurance business.

All 77 Regions have been declared as BIMA Region and 835 branches as BIMA Banks by LIC.

As on 31st March 2013, Bank has a network of 4294 branches across the country. During the year 283 branches have been opened, which includes 13 extension counters converted to full-fledged branches.

- Bank has installed 2529 ATMs till 31st March 2013.

Under the organizational re-structuring process, Bank has delegated more powers to the Regional Managers to ensure decision making faster and Zonal Managers will work as Business Facilitator for Regional Offices for achieving Corporate Goals.

2. INCOME & EXPENDITURE

Details of income and expenditure for the period 2012-13 are given hereunder:

Rs. in crore

31.03.2013 31.03.2012 Variation %

1 INTEREST INCOME 21861 19150 2711 14.16

-Advances 16922 14421 2501 17.34

-Investments 4779 4347 432 9.94

-Others TM 160 382 (222) (58.12) 2 OTHER INCOME 1667 1395 272 1950 (Profit on Sale of Investments)

3 TOTAL INCOME (1 2) 23528 20545 2983 1452

4 INTEREST EXPENDED 16123 13981 2142 1532

-Deposits 14940 12996 1944 1496

-Others 1183 985 198 2010

5 OPERATING EXPENSES 4232 3749 483 1288

-Establishment 2891 2506 385 15.36

-others 1341 1243 98 7.88

6 TOTAL EXPENSES (4 5) 20355 17730 2625 1481

7 SPREAD (1-4) 5738 5169 569 1101

8 OPERATING PROFIT (3-6) 3173 2815 358 12/72

9 PROVISIONS-NPA/INVST. /OTHERS 1853 2169 (316) (14.57)

10 PROVISIONS FOR TAX 305 113 192 169.91

11 NET PROFIT 1015 533 482 90.43

Interest Income grew by 14.16 per cent during the year

Interest expenses on Deposits increased by 14.96 % to Rs.14940 crore in March 2013 from Rs.12996 crore in previous year.

- Expenses on employees increased by Rs.385 crore during the year to Rs.2891 crore from Rs.2506 crore in previous year, due to provisioning requirement of Rs.100 crore for expected Wage settlement.

3. PROVISIONS

Details of Total Provisions of Rs.2158 crore charged to the Profit and Loss Account during the year 2012-13 vis-a-vis previous year are detailed as under:

(Rs. in crore)

31.03.2013 31.03.2012 Variation

Provisions for Standard Assets 91 54 37

Provisions for NPAs 1930 1962 (32)

Depreciation/Provision on Investments (163) 151 (314)

Provisions for Taxes 305 113 192

Others (5) 2 (7)

TOTAL 2158 2282 (124)

4. PROFITABILITY RATIO

(In percentage)

31.03.2013 31.03.2012

Cost of Deposits 7.42 7.20

Cost of Funds 7.53 7.28

Yield on Advances 11.14 11.36

Yield on Investments 7.60 7.53

Net Interest Margin 2.65 2.78

Cost Income Ratio 57.16 57.11

Cost of Deposits increased from 7.20 per cent in 2012 to 7.42 per cent in 2013.

The yield on advances was 11.14 per cent in 2012-13 and yield on investments was 7.60 per cent against 7.53 per cent in 2011-12.

- Net Interest Margin reduced to 2.65 per cent from 2.78 per cent in previous year.

- Cost to Income Ratio increased from 57.11 per cent in 2012 to 57.16 per cent in the year under review.

5. BANKING RATIOS

(In percentage)

2012-13 2011-12

Interest Income to Average Working Fund (AWF) 9.46 9.22

Non-Interest Income to AWF 0.72 0.67

Operating Profit to AWF 1.37 1.36

Return on Average Assets 0.44 0.26

Business Per Employee (Rs. in lakh) 973 862

Net Profit per Employee (Rs. in lakh) 2.83 1.51

6. CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)

The components of Capital Adequacy Ratio were as under:

31.03.2013 31.03.2012 Basel-I Basel-II Basel-I Basel-II

Risk Weighted Assets (Rs. in crore) 182530351 177658071 1479581 140823

Capital Funds (in percentage)

Tier-I 7.95 8.09 7.50 7.79

Tier-II 3.38 3.40 4.46 4.61

Capital Adequacy Ratio 11.33 11.49 11.96 12.40

7. NET PROFIT & DIVIDEND

The Bank earned Net Profit of Rs.1015 crore for the financial year 2012-13. The Board of Directors are pleased to recommend a dividend @ 25 per cent on the Equity Share Capital i.e. Rs.2.50/- per equity share of Rs.10/- each.

8. CHANGES IN THE BOARD DURING THE YEAR

During the year under review, the following changes took place in the Board of Directors of the Bank:

Shri Malay Mukherjee was appointed as Executive Director of the Bank w.e.f 05.11.2012 in place of Smt V.R.Iyer who ceased as Executive Director on 05.11.2012.

Shri R.K.Goyal was appointed as Executive Director of the Bank w.e.f 11.01.2013 in place of Shri R.K.Dubey who ceased as Executive Director on 11.01.2013.

Shri Brijlal Kshatriya ceased to be the Shareholders'' Director w.e.f 20.03.2013.

Shri Romesh Sabharwal and Major (Retd) Ved Prakash, Part Time Non-Official Directors ceased to be the Directors of the bank w.e.f 06.10.2012 and 20.10.2012 respectively consequent upon expiry of their tenures.

Shri M.P.Shorawala and Shri Krishan Sethi were appointed as Part Time Non-Official Directors of the Bank w.e.f 03.01.2013 and 28.02.2013 respectively.

Shri B.S.Rambabu ceased to be the Workmen Employee Director of the Bank w.e.f 15.03.2013.

The Board places on record its appreciation of valuable contribution extended by Smt.V.R.Iyer, Shri R.K. Dubey, Shri Brijlal Kshatriya, Shri Romesh Sabharwal, Major (Retd) Ved Prakash and Shri B.S. Rambabu who ceased to be the directors of the Bank during Financial Year 2012-13.

9. DIRECTORS'' RESPONSIBILTY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2013;

The applicable accounting standards have been followed along with proper explanation relating to material departure, if any;

The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied;

Reasonable and prudent judgement and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31,2013;

Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India ; and

The accounts have been prepared on a going concern basis.

10. CORPORATE GOVERNANCE

The Board of the Bank is committed to adapt Corporate Governance practices in letter and spirit. The Bank has adopted well documented system and practice on Corporate Governance.

11. ACKNOWLEDGEMENT

The Board of Directors places on record its gratitude to the Government of India, Reserve Bank of India and the Security Exchange Board of India for their valuable guidance and support. The Board acknowledges with gratitude the unstinted support and faith of its customers and shareholders. The Board wishes to place on record its appreciation of the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of the Board of Directors

Sd/-

Place : Mumbai Mohan V Tanksale

Date : May 31, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors have pleasure in presenting the Bank's Annual Report of the Bank along with the Audited statement of Accounts, the Profit and Loss accounts and the cash flow statement for the year ended March 31, 2012.

1. PERFORMANCE HIGHLIGHTS

- Total Business of the Bank increased by Rs. 36135 crore to Rs. 346898 crore from Rs. 310763 crore in previous year, registering y-o-y growth of 11.63 per cent.

- Total Deposits increased by Rs. 16817 crore to Rs. 196173 crore, registering y-o-y growth of 9.38 per cent.

- Gross Advance of the Bank grew by Rs. 19318 crore to Rs. 150725 crore, registering y-o-y growth of 14.70 per cent.

- Operating Profit increased to Rs. 2815 crore from Rs. 2591 crore in 2010-11 , registering y-o-y growth of 8.65 per cent

- Net Profit stood at Rs. 533 crore in 2011-12 as against Rs. 1252 crore in 2010-11.

- Capital Adequacy Ratio (as per Basel-II) improved to 12.40 per cent from 11.68 per cent in previous year.

- Net worth increased to Rs. 10550.44 crore from Rs. 6909.54 crore.

- Gross NPA of the Bank increased by Rs. 4879 crore to Rs. 7273 crore from Rs. 2394 crore in previous year. In percentage term Gross NPA increased to 4.83 per cent in 2011-12 from 1.82 per cent in last year.

- Net NPA increased to Rs. 4557 crore from Rs. 847 crore in previous year. Net NPA percentage increased to 3.09 per cent from 0.65 per cent in previous year.

- Net Interest Margin (NIM) reduced to 2.78 per cent from 3.31 per cent in 2011.

- Average Business per Employee increased to Rs. 862 lakh from Rs. 835 lakh in previous year.

- Net Profit per Employee reduced to Rs. 1.51 lakh from Rs. 3.96 lakh in March 2011.

- Credit to Priority Sector increased to Rs. 40749 crore from Rs. 37469 crore in previous year, recording y-o-y growth of 8.76 per cent.

- Agriculture Advance of the Bank increased to Rs. 18950 crore from Rs. 18545 crore in 2010-11.

- Under the micro credit (credit up to Rs. 50,000 per borrower), Bank has extended credit of Rs. 216 crore.

- Advances to Micro & Small Enterprises (MSE) increased to Rs. 13518 crore during the year under review from Rs. 10999 crore in previous year.

- During the year 13256 new Self Help Groups (SHGs) were formed, out of which 6797 SHGs have been credit- linked.

- Under the Government Sponsored Programmes, Bank has provided assistance to 13525 SGSY beneficiaries, 4137 SJSRY beneficiaries & 6244 PMEGP borrowers during the year 2011-12.

- Bank has extended loan of Rs. 13214 crore to the borrowers belonging to the weaker section of the society.

- Education Loan grew by 32.95 per cent during the year and the total loan reached to Rs. 2058 crore.

- Bank has established 46 Rural Self Employment and Training Institute (RSETI) across India.

- Bank has sponsored 7 Regional Rural Banks (RRBs) covering 57 districts of 7 states with 1806 branches.

- A target of 3725 villages (having population over 2000) have been allotted under Financial Inclusion Plan. Bank has covered all the villages by 21st December 2011, well before the targeted time of 31st March 2012.

- The corporate credit of the Bank increased to Rs. 106758 crore from Rs. 84995 crore in previous year registering y-o-y growth of 25.61%.

- The retail credit grew by 39.72% from Rs. 12522 crore in 2010-11 to Rs. 17496 crore in 2011-12.

- Cent Param - Salary Account Scheme introduced specially for the armed and para military force with attractive features like free remittances, retail loans at concessional rates, customized credit cards etc.

- During the year 2011-12, Bank has earned commission of Rs. 13.53 crore in life insurance & Rs. 6.30 crore in non-life insurance business.

- Our 67 Regions have been declared as BIMA Region and 800 branches as BIMA Banks by LIC.

- Bank has introduced Family Floater Rural Health Insurance Scheme with the tie-up arrangement with general insurance partner Chola MS.

- A new recovery scheme "Krishak Rahat Yojana" introduced for the recovery in NPA accounts of Tractor/ Agriculture Loans and Rs. 15.51 crore has been recovered during the year.

- During the year, 7303 recovery camps were organized at different locations across the country and recovered Rs. 745 crore.

- As on 31st March 2012, Bank has a network of 4011 branches across the country. During the year 283 branches have been opened, which includes 121 extension counters and 5 satellite offices converted to full-fledged branches.

- Bank has installed 1682 ATMs till 31st March 2012.

- Under the organizational re-structuring process, Bank has delegated more powers to the Regional Managers to ensure decision making faster and Zonal Managers will work as Business Facilitator for Regional Offices for achieving Corporate Goals.

2. INCOME & EXPENDITURE

Details of income and expenditure for the period 2011-12 are given hereunder:

Rs. in crore

31.03.2012 31.03.2011 Variation %

1 INTEREST INCOME 19150 15221 3929 25.81

-Advances 14421 11254 3167 28.14

-Investments 4347 3767 580 15.40

-Others 382 200 182 91.00

2 OTHER INCOME 1395 1265 130 10.28

(Profit on Sale of Investments)

3 TOTAL INCOME (1 2) 20545 16486 4059 24.62

4 INTEREST EXPENDED 13981 9895 4086 41.29

-Deposits 12996 9063 3933 43.40

-Others 985 832 153 18.39

5 OPERATING EXPENSES 3749 4000 -251 -6.28

-Establishment 2506 2964 -458 -15.45

-others 1243 1036 207 19.98

6 TOTAL EXPENSES (4 5) 17730 13895 3835 27.60

7 SPREAD (1-4) 5169 5326 -157 -2.95

8 OPERATING PROFIT (3-6) 2815 2591 224 8.65

9 PROVISIONS-NPA/INVST./ OTHERS 2169 932 1237 132.73

10 PROVISIONS FOR TAX 113 407 -294 -72.24

11 NET PROFIT 533 1252 -719 -57.43

- Interest Income grew by 25.81 per cent during the year

- Interest expenses on Deposits increased by 43.40 % to Rs. 12996 crore in March 2012 from Rs. 9063 crore in previous year.

- Expenses on employees reduced by Rs. 458 crore during the year to Rs. 2506 crore from Rs. 2964 crore in previous year, due to reduced provisioning requirement for pension.

3. PROVISIONS

Details of Total Provisions of Rs. 2282 crore charged to the Profit and Loss Account during the year 2011-12 vis-a-vis previous year are detailed as under:

(Rs. in crore)

31.03.2012 31.03.2011 Variation

Provisions for Standard Assets 54 106 -52

Provisions for NPAs 1962 632 1330

Depreciation/Provision on Investments 151 154 -3

Provisions for Taxes 113 407 -294

Others 2 40 -38

TOTAL 2282 1339 943

4. SPREAD ANALYSIS

(In percentage)

31.03.2012 31.03.2011

Cost of Deposits 7.20 5.71

Cost of Funds 7.28 5.82

Yield on Advances 11.36 10.29

Yield on Investments 7.53 7.45

Net Interest Margin 2.78 3.31

Cost Income Ratio 57.11 60.68

- Cost of Deposits increased from 5.71 per cent in 2011 to 7.20 per cent in 2012.

- The yield on advances was 11.36 per cent in 2011-12 and yield on investments was 7.53 per cent against 7.45 per cent in 2010-11.

- Net Interest Margin reduced to 2.78 per cent from 3.31 per cent in previous year.

- Cost to Income Ratio decreased from 60.68 per cent in 2011 to 57.11 per cent in the year under review.

5. BANKING RATIOS (In percentage)

2011-12 2010-11

Interest Income to Average Working Fund (AWF) 9.22 8.49

Non-Interest Income to AWF 0.67 0.71

Operating Profit to AWF 1.36 1.45

Return on Average Assets 0.26 0.70

Business Per Employee (Rs. in lakh) 862 835

Net Profit per Employee (Rs. in lakh) 1.51 3.96

6. CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)

The components of Capital Adequacy Ratio were as under:

31.03.2012 31.03.2011

Basel-I Basel-II Basel-I Basel-II

Risk Weighted Assets(Rs in crore) 147958 140823 128587 116619 Capital Funds (in percentage)

Tier-I 7.50 7.79 5.81 6.31

Tier-II 4.46 4.61 4.93 5.33

Capital Adequacy Ratio 11.96 12.40 10.74 11.64

7. NET PROFIT & DIVIDEND

The Bank earned Net Profit of Rs. 533 crore for the financial year 2011-12. Despite lower profit, believing in the intrinsic strength of the Bank, the Board of Directors are pleased to recommend dividend @ 20 per cent on the Equity share Capital i.e. Rs. 2/- per Equity Share of Rs. 10/- each.

8. CHANGES IN THE BOARD DURING THE YEAR

During the year under review, the following changes took place in the Board of Directors of the Bank:

- Shri Mohan V. Tanksale was appointed as Chairman & Managing Director of the Bank in place of Shri S. Sridhar who retired as Chairman & Managing Director on 31.05.2011. Shri Mohan V. Tanksale took over the charge of the Bank w.e.f. 29.06.2011.

- Shri Alok Tandon was appointed as Govt. of India Nominee Director w.e.f. 15.11.2011 in place of Dr. Shashank Saksena who ceased to be a Director on the Board of the Bank on 14.11.2011.

- The term of Shri Brijlal Kshatriya and Prof. N. Balakrishnan as Shareholders' Director completed on 19.11.2011. Both the Directors were re-elected as Shareholders' Director w.e.f. 10.01.2012.

- Shri Guman Singh was appointed as Part Time Non Official Independent Director w.e.f. 08.08.2011.

9. DIRECTORS' RESPONSIBILTY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2012;

- The applicable accounting standards have been followed along with proper explanation relating to material departure, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied;

- Reasonable and prudent judgement and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31,2012;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India ; and

- The accounts have been prepared on a going concern basis.

10. CORPORATE GOVERNANCE

The Board of the Bank is committed to adapt Corporate Governance practices in letter and spirit. The Bank has adopted well documented system and practice on Corporate Governance.

11. ACKNOWLEDGEMENT

The Board of Directors places on record its gratitude to the Government of India, Reserve Bank of India and the Security and Exchange Board of India for their valuable guidance and support. The Board acknowledges with gratitude the unstinted support and faith of its customers and shareholders. The Board wishes to place on record its appreciation of the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of the Board of Directors

Place : Mumbai Mohan V Tanksale

Date : May 24, 2012 Chairman & Managing Director


Mar 31, 2011

The Directors have pleasure in presenting the Banks Annual Report of the Bank along with the Audited statement of Accounts, the Profit and Loss accounts and the cash flow statement for the year ended March 31, 2011.

1. PERFORMANCE HIGHLIGHTS

. Total Business of the Bank increased by Rs. 41538 crore to Rs. 310763 crore, registering y-o-y growth of 15.43 per cent.

. Total Deposits increased by Rs. 17249 crore to Rs. 179356 crore, registering y-o-y growth of 10.64 per cent.

. Gross Advance of the Bank grew by Rs. 24289 crore to Rs. 131407 crore, registering y-o-y growth of 22.67 per cent.

. Operating Profit increased by Rs. 533 crore to Rs. 2591 crore , registering y-o-y growth of 25.90 per cent

. Net Profit increased by Rs. 194 crore to Rs. 1252 crore, registering y-o-y growth of 18.35 per cent.

. Capital Adequacy Ratio (as per Basel-II) reduced to 11.64 per cent from 12.23 per cent in previous year.

. Net worth increased by Rs. 1181 crore to Rs. 6909.54 crore, registering y-o-y of 20.68 per cent.

. Gross NPA of the Bank reduced by Rs. 64 crore to Rs. 2394 crore from Rs. 2458 crore in previous year. In percentage term Gross NPA reduced to 1.82 per cent from 2.29 per cent in last year.

. Net NPA increased from Rs. 727 crore to Rs. 847 crore in previous year. Net NPA percentage reduced to 0.65 per cent from 0.69 per cent in previous year.

. Net Interest Margin (NIM) stood at 3.31 per cent against 1.86 per cent in 2010.

. Average Business per Employee increased to Rs. 835 lakh from Rs. 712 lakh in previous year.

. Net Profit per Employee increased to Rs. 3.96 lakh from Rs. 3.30 lakh in March 2010.

. Credit to Priority Sector increased to Rs. 41949 crore from Rs. 35393 crore in previous year, recording y-o-y growth of 18.52 per cent.

. Agriculture Advance of the Bank grew by 8.08 per cent, contributing a share of 18.64 per cent in Net Bank Credit, which is above the RBIs norms of 18 per cent.

. 7387 beneficiaries were issued Cent Janata Credit Cards during the year.

. 11877 Self Help Groups formed during the year out of which 11159 groups were credit linked.

. Advances to MSE grew by 27.73 per cent from Rs. 9317 crore in year 2010 to Rs. 11901 crore. Sixty branches have been identified for focus attention for MSE finance.

. 1776 villages with the population over 2000 have been brought under Financial Inclusion Plan.

. Retail loans of the Bank grew by 26.29 per cent from Rs. 11190 crore (2010) to Rs. 14132 crore. The share of Retail Loan in Gross Advance was 10.75 per cent.

. Education Loan grew by 31.18 per cent during the year and the total loan reached to Rs. 1548 crore.

. Housing Loan portfolio (up to Rs. 20 lakh) shown a growth of 14.41% and reached to Rs. 7001 crore.

. E-stamping started in the states of Delhi, Karnataka and Tamil Nadu to provide stamping facility.

. Electronic uploading of Central Civil Pension has been started.

. Bank has been appointed as Registrar by the Unique Identification Authority of India for carrying out enrolment work for issuance of Unique ID on pan India basis.

. Corporate Credit increased from Rs. 75616 crore to Rs. 93554 crore registering a growth of 23.72 per cent during the year.

. Bank has opened 82 new branches during the year and having network of 3728 branches as on 31st March 2011.

. All branches have been brought under CBS platform.

. E-treasury of the Bank made fully operationalised.

. Bank has obtained license to open NRI branches in Anand, Margao, Hyderabad and Bhuj .

. Bank has signed two MoU for establishing joint venture banks – one at Maputo, in the Republic of Mozambique and the other at Thimpu in Bhutan.

. The name of "Centbank Financial and Custodial services Ltd.” has been changed as "Centbank Financial Services Limited”.

. Bank has made cash recovery of Rs. 736 crore in NPA accounts.

. Bank has offered & successfully completed Right Issue of Rs. 2497 crores in March / April 2011. The Rights Issue ratio was 3:5 and was oversubscribed by 1.07 times.

. Bank own the Skoch Financial Inclusion Award 2011 for implementing the Bihar Rural Livelihood Project also known as JEEVIKA Project and My FM stars of the Industry Retail Leadership Award in February 2011.

2. INCOME & EXPENDITURE

Details of income and expenditure for the period 2010-11 are given hereunder:

Rs. in crore

31.03.2011 31.03.2010 Variation %

1 INTEREST INCOME 15221 12064 3157 26.17

- Advances 11254 8648 2606 30.13

- Investments 3767 3307 460 13.91

- Others 200 109 61 83.49

2 OTHER INCOME 1265 1735 -470 -27.09

(Profit on Sale of Investments)

3 TOTAL INCOME (1+2) 16486 13799 2687 19.47

4 INTEREST EXPENDED 9895 9519 376 3.95

- Deposits 9063 9121 -58 -0.64

- Others 832 398 434 109.05

5 OPERATING EXPENSES 4000 2222 1778 80.02

- Establishment 2964 1544 1420 91.97

- others 1036 678 358 52.80

6 TOTAL EXPENSES (4+5) 13895 11741 2154 18.35

7 SPREAD (1-4) 5326 2545 2781 109.27

8 OPERATING PROFIT (3-6) 2591 2058 533 25.90

9 PROVISIONS-NPA/INVST./OTHERS 932 509 423 83.10

10 PROVISIONS FOR TAXATION 407 491 -84 -17.11

11 NET PROFIT 1252 1058 194 18.34

. Interest Income grew by 26.17 per cent during the year

. Net Interest Income registered a growth of 109.27 percent

. Interest expenses on Deposits reduced to Rs. 9063 in March 2011 from Rs. 9121 crore in previous year, because of maturity of high cost deposits.

. Expenses on employees has gone up by 91.97% because of salary revision for staff & officers and provision of pension & gratuity.

3. PROVISIONS

Details of Total Provisions of Rs. 1339 crore charged to the Profit and Loss Account during the year 2010-11 vis-a-vis previous year are detailed as under:

(Rs. in crore)

31.03.2011 31.03.2010 Variation Provisions for Standard Assets 106 30 76

Provisions for NPAs 632 288 344

Depreciation/Provision on Investments 154 65 89

Provisions for Taxes 407 491 -84

Others 40 126 -86

TOTAL 1339 1000 339

4. SPREAD ANALYSIS

(In percentage)

31.03.2011 31.03.2010

Cost of Deposits 5.71 6.29

Cost of Funds 5.82 6.34

Yield on Advances 10.29 9.82

Yield on Investments 7.14 6.74

Net Interest Margin 3.31 1.86

Cost Income Ratio 60.68 51.91

. Cost of Deposits decreased from 6.29 per cent in 2011 to 5.71 per cent in 2011.

. The yield on advances and yield on investments both increased to 10.29 per cent and 7.14 per cent from 9.82 per cent and 6.74 per cent respectively in previous year.

. Net Interest Margin significantly increased from 1.86 (2010) to 3.31 per cent.

. Cost Income Ratio increased from 51.91 per cent in 2010 to 60.68 per cent, on account of increased establishment expenses

5. BANKING RATIOS

(In percentage)

2010-11 2009-10

Interest Income to Average Working Fund (AWF) 8.49 7.56

Non-Interest Income to AWF 0.71 1.09

Operating Profit to AWF 1.45 1.29

Return on Average Assets 0.70 0.66

Business Per Employee (Rs. in lakh) 835 712

Net Profit per Employee (Rs. in lakh) 3.96 3.30

6. CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)

The components of Capital Adequacy Ratio were as under:

31.03.2011 31.03.2010 Basel-I Basel-II Basel-I Basel-II

Risk Weighted Assets (Rs. in crore) 128587 116619 104344 92181 Capital Funds (in percentage)

Tier-I 5.81 6.31 6.03 6.83

Tier-II 4.93 5.33 4.78 5.40

Capital Adequacy Ratio 10.74 11.64 10.81 12.23

7. NET PROFIT & DIVIDEND

The Bank earned Net Profit of Rs. 1252 crore for the financial year 2010-11. The Board of Directors are pleased to recommend a dividend @ 25 per cent.

8. CHANGES IN THE BOARD DURING THE YEAR

During the year under review, the following changes took place in the Board of Directors of the Bank:

. Shri Ramnath Pradeep has been appointed as CMD of Corporation Bank w.e.f. September 1, 2010.

. Shri Arun Kaul has been appointed as CMD of UCO Bank w.e.f. September 1, 2010.

. Smt. V.R. Iyer has been appointed as Executive Director with effect from September 1, 2010.

. Shri R.K. Dubey has been appointed as Executive Director with effect from September 1, 2010.

. Shri M.K. Bhattacharya ceased to be a Director with effect from July 30, 2010.

. Shri Salim Gangadharan has been appointed as RBI Nominee Director with effect from July 30, 2010.

. Shri M.S. Johar retired on January 1, 2011.

9. DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2011;

. The applicable accounting standards have been followed along with proper explanation relating to material departure, if any;

. The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied;

. Reasonable and prudent judgement and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31,2011;

. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India ; and

. The accounts have been prepared on a going concern basis.

10. CORPORATE GOVERNANCE

The Board of the Bank is committed to adapt Corporate Governance practices in letter and spirit. The Bank has adopted well documented system and practice on Corporate Governance.

11. ACKNOWLEDGEMENT

The Board of Directors places on record its gratitude to the Government of India, Reserve Bank of India and the Security Exchange Board of India for their valuable guidance and support. The Board acknowledges with gratitude the unstinted support and faith of its customers and shareholders. The Board wishes to place on record its appreciation of the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of the Board of Directors

Place: Mumbai S. Sridhar

Date : May 30, 2011 Chairman and Managing Director


Mar 31, 2010

The Directors have pleasure in presenting the Banks Annual Report along with the Audited Statement of Accounts, the Profit and Loss accounts and the Cash Flow statement for the year ended March 31,2010.

1. PERFORMANCE HIGHLIGHTS

- Total Business of the Bank increased by Rs.51213 crore to Rs.269225 crore, registering y-o-y growth of 23.5 per cent.

- Total Deposits increased by Rs.30835 crore to Rs.162107 crore, registering y-o-y growth of 23.48 per cent.

- Gross Advance of the Bank grew by Rs.20378 crore to Rs.107118 crore , registering y-o-y growth of 24 per cent.

- Operating Profit increased by Rs.621 crore to Rs.2058 crore, registering y-o-y growth of 43.21 per cent

- Net Profit increased by Rs.487 crore to Rs.1058 crore, registering y-o-y growth of 85.25 per cent.

- Capital Adequacy Ratio (as per Basel-II) reduced to 12.23 per cent from 13.12 per cent in previous year.

- Net Worth increased by Rs.1327 crore to Rs.5728 crore, registering y-o-y of 30.15 per cent.

- Gross NPA of the Bank increased by Rs.142 crore to Rs.2458 crore from Rs.2316 crore in previous year. In percentage term Gross NPA reduced to 2.29 per cent from 2.67 per cent in last year.

- Net NPA decreased from to Rs.727 crore from Rs.1063 crore in previous year. Net NPA percentage reduced to 0.69 per cent from 1.24 per cent in previous year (2009).

- Net Interest Margin (NIM) stood at 1.86 per cent against 1.97 per cent in 2009. This was due to fall in yield on investments which reduced from 6.89 (2009) to 6.74 per cent. The Average Earning Assets increased to Rs. 137085 crore from Rs.112578 crore in previous year.

- Business per Employee increased to Rs.712 lakh from Rs.560 lakh in last year.

- Net Profit per Employee increased to Rs.3.30 lakh from 1.71 lakh in 2009.

- Credit to Priority Sector increased to Rs.35393 crore from Rs. 29332 crore in previous year, recording y-o-y growth of 20.66 per cent.

- Agriculture Advance of the Bank grew by 29.92 per cent, contributing a share of 21.31 per cent in Net Bank Credit, which is well above the RBIs norms of 18 per cent.

- Bank has issued 2.33 lakh Kisan Credit Cards during the year with sanctioned limit of Rs.1639 crore.

- New product Central Kisan Gold Card launched and issued to 85113 farmers.

- 17245 Self Help Groups formed during the year out of which 15685 groups were credit linked to the tune of Rs.158 crore.

- The advances to MSE grew by 59.72 per cent from Rs.5833 crore in year 2009 to Rs.9317 crore. Under the cluster based approach, 60 SSI specialised branches have been re-designated to "SME Specialised Branches".

- 14047 villages have been brought under 100 per cent Financial Inclusion. During the year 34.08 lakh No-Frill accounts were opened.

- Retail loans of the Bank grew by 23.37 per cent from Rs.9070 crore (2009) to Rs.11190 crore. The share of Retail Loan in Gross Advance was 10.45 per cent.

- Education Loan grew by 44 per cent during the year and reached to Rs.1189 crore.

- Vehicle loan segment registered a robust growth of 50.16 per cent & portfolio reached to Rs.553.35 crore.

- Credit to Infrastructure Sector reached to Rs.24479 crore.

- Bank has opened 49 new branches during the year and have network of 3577 branches as on 31st March 2010.

- 1533 branches were brought under CBS platform.

- Retail sale of Cent Gold coins started during the year.

- Bank has earned trading profit of Rs.772.31 crore during the year.

2. INCOME & EXPENDITURE

Details of income and expenditure for the period 2009-10 are given hereunder:

Rs. in crore 31.03.2010 31.03.2009 Variation %

1 INTEREST INCOME 12064 10455 1609 15.29 Advances 8648 7753 895 11.54 Investments 3307 2563 744 29.02 Others 109 139 30 -21.58 2 OTHER INCOME 1735 1070 665 62.14 (Profit on Sale of Investments) 772 410 362 88.29 3 TOTAL INCOME (1+2) 13799 11525 2274 19.73 4 INTEREST EXPENDED 9519 8227 1292 15.70 Deposits 9121 7913 1208 15.26 Others 398 314 84 6.75 5 OPERATING EXPENSES 2222 1861 361 19.40 Establishment 1544 1272 272 21.38 others 678 589 89 15.11 6 OPERATING EXPENSES (4+5)11741 10088 1653 16.39 7 SPREAD (1-4) 2545 2228 317 14.22 8 OPERATING PROFIT (3-6) 2058 1437 621 43.21 9 PROVISIONS-NPA/ INVST./OTHERS 509 512 3 -0.59 10 PROVISIONS FOR TAXATION 491 354 137 38.70 11 NET PROFIT 1058 571 487 85.25

- Income from investments has recorded a growth of 29.02 per cent, whereas interest income from advances grew by 11.54 per cent. Interest Income for the year recorded growth of 15.29 per cent.

- Net Interest Income (spread) grew by 14.22 per cent while the interest expenditure increased by 15.70 per cent.

- Due to lower rate of interest in advances, Net Interest Margin reduced from 1.97 per cent in 2009 to 1.86 per cent and Yield on Advances from 10.19 per cent (2009) to 9.82 per cent.

- Operating profit has increased by 43.21 per cent, while Net Profit recorded a robust growth of 85.25 per cent for the year 2009-10.

3. PROVISIONS

Details of Total Provisions of Rs. 1000 crore charged to the Profit and Loss Account during the year 2009-10 vis-a vis previous year are detailed as under:

(Rs. in crore) 31.03.2010 31.03.2009 Variation

Provisions for Standard Assets 30 45 -15 Provisions for NPAs 288 322 -34 Depreciation/Provision on Investments 65 91 -26 Provisions for Taxes 491 354 137 Others 126 54 72 TOTAL 1000 866 134

4. SPREAD ANALYSIS

{In percentage) 31.03.2010 31.03.2009

Cost of Deposits 6.29 6.90 Cost of Funds 6.34 6.94 Yield on Advances 9.82 10.19 Yield on Investments 6.74 6.89 Net Interest Margin 1.86 1.97 Cost Income Ratio 51.91 56.44

- Cost of Deposits decreased from 6.90 per cent in 2009 to 6.29 per cent in 2010 and Cost of Funds also reduced to 6.34 per cent from 6.94 per cent in previous year.

- The yield on advances and yield on investments both decreased to 9.82 per cent and 6.74 per cent from 10.19 per cent and 6.89 per cent respectively in previous year.

- Net Interest Margin reduced from 1.97 per cent (2009) to 1.86 per cent.

- Cost Income Ratio reduced from 56.44 per cent in 2009 to 51.91 per cent.

5. BANKING RATIOS

(In percentage) 2009-10 2008-09

Interest Income to Average Working Fund (AWF) 7.56 8.22 Non-Interest Income to AWF 1.09 0.84 Operating Profit to AWF 1.29 1.13 Return on Average Assets 0.66 0.45 Business Per Employee (Rs. in lakh) 712 560 Net Profit per Employee (Rs. in lakh) 3.30 1.71

6. CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)

The components of Capital Adequacy Ratio were as under:

31.03.2010 31.03.2009

Basel-I Basel-ll Basel-I Basel-ll

Risk Weighted Assets (Rs. in crore) 104344 92181 79572 71270 Capital Funds (in percentage) Tier-I 6.03 6.83 6.24 6.97 Tier-ll 4.78 5.40 5.51 6.15 Capital Adequacy Ratio 10.81 12.23 11.75 13.12

7. NET PROFIT & DIVIDEND

The Bank earned Net Profit of Rs. 1058 crore for the financial year 2009-10. The Board of Directors are pleased to recommend a dividend 22 percent

8. CHANGES IN THE BOARD DURING THE YEAR

During the year under review, the following changes took place in the Board of Directors of the Bank:

- Shrl Arun Kaul has been appointed as Executive Director with effect from April 22,2009

- Shrl Romesh Sabharwal has been re-appointed as a Part-Time Non-Official Director with effect from October 6, 2009

- Major (Retd.)Ved Prakash has been re-appointed as a Part-Time Non-Official Director with effect from October 20, 2009.

- Shrl B S Rambabu has been appointed as Workmen Employee Director with effect from March 16,2010.

9. DIRECTORSRESPONSIBILTY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31,2010:

- The applicable accounting standards have been followed alongwith proper explanation relating to material departure, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied;

- Reasonable and prudent judgement and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31,2010;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India; and

- The accounts have been prepared on a going concern basis.

10. CORPORATE GOVERNANCE

The Board of the Bank is committed to adapt Corporate Governance practices in letter and spirit. The Bank has adopted well documented system and practice on Corporate Governance.

11. ACKNOWLEDGEMENT

The Board of Directors places on record its gratitude to the Government of India, Reserve Bank of India and the Security Exchange Board of India for the their valuable guidance and support. The Board acknowledges with gratitude the unstinted support and faith of its customers and shareholders. The Board wishes to place on record its appreciation of the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of the Board of Directors

Place: Mumbai S Sridhar Date : May 22,2010 Chairman and Managing Director

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