DIRECTORS' REPORT 2015-16 To The Members, Your Directors have immense pleasure in presenting the Bank's Annual Report along with the Audited Statement of Accounts and the Cash Flow statement for the year ended 31 March 2016. FINANCIAL HIGHLIGHTS The major highlights of your Bank's performance during FY2015-16 are as follows: • Global Business of the Bank reached Rs. 3,10,918 crore during the year, registering a growth of 4.31%. • Total Deposits grew by Rs. 9061 crore, i.e. 5.35% for the financial year 2015-16 to Rs. 1,78,286 crore. • Gross Advances at Rs. 1,32,632 crore, registered an increase of Rs. 3800 crore i.e. 2.95% as on 31.03.2016. Overall Credit-Deposit ratio was at 74.39%. • Priority Sector Advances was at Rs. 50,333.52 crore as on 31.03.2016 and accounted for 40.85% of Adjusted Net Bank Credit (ANBC). • Agriculture Credit was at Rs. 23,017.56 crore and accounted for 18.68% of ANBC. • In accordance with the priorities accorded by the Government of India, the Bank's Advances to SC/STs reached 2146.34 crore as of March 31, 2016, constituting 4.55% of total Priority Sector Advances. • Net Interest Margin was at 2.33% in FY2015-16. • Operating Profit increased to Rs. 3032.09 crore as against Rs. 3013.71 crore in FY2014-15. • Net Profit for FY 2015-16 was at Rs. 711.38 crore as compared to Rs. 1005.17 crore for 2014-15. • Return on Average Assets was at 0.36%. • Capital Adequacy Ratio (BASEL III) was at 13.20% as compared to 12.86% as of March 31, 2015. • Return on Net worth for FY 2015-16 was at 5.46%, as compared to 8.34% in FY2014-15. • Gross NPA was at 6.66% as against 4.40% in March 31, 2015 while Net NPA was at 4.20% as against 2.50% in March 31, 2015. • Total recovery of NPAs during FY 2015-16 amounted to Rs. 901 crore as against Rs. 848 crore in the previous year • Earnings per share were at Rs. 14.81 and Book value was at Rs. 280.63 as on 31.03.2016. • Total domestic branch network of the Bank in India increased to 2562 from 2409 as on 31.03.2016. Besides, the Bank has 3 overseas branches, taking the total branch network to 2565. • Total number ofATMs increased to 2531 as on 31.03.2016 from 2344 as on 31.03.2015, which includes 649 offsite ATMs and customers can access more than 2.21 lakh ATMs in the (NFS) shared network. • During the year, Bank deployed 253 Cash Deposit Machines / Bunch Note Acceptors with recycling functionality, wherein the machines can receive and dispense cash to the customers. Bank installed 102 e-lounges at various locations, which are unmanned kiosks with BNAs, secured pass book printers and cheque deposit machines with 24 x 7 operations on all days including holidays. INCOME AND EXPENDITURE • During the year, total income of the Bank increased by 4.70 per cent to Rs.18,025.20 crore, with Interest Income at Rs.16,243.79 crore and Other Income at 1781.42 crore. • The Bank's total expenditure increased by Rs.790.54 crore (5.57%) to Rs.14,993.11 crore. •Total operating expenses was at Rs.3195.51 crore for FY2015-16 as compared to Rs.2810.92 crore inFY2014-15. DIVIDEND • The Board of Directors has recommended a dividend of 15% for FY 2015-16. The dividend shall be subject to tax on dividend to be paid by the Bank. The total outflow on account of dividend for FY 2015-16 is 72.04 crore, excluding dividend tax. The payout ratio works out to 10.13%. NETWORTHANDCRAR • Networth of the Bank improved to Rs.13,478.35 crore as on 31.03.2016 from Rs.12,557.73 crore as on 31.03.2015, registering a growth of 7.3%. • As per Basel III norms, the Capital to Risk Weighted Assets Ratio (CRAR) was at 13.20% as on March 2016, compared to 12.86% as of March 2015, against the minimum requirement of 9.625%. The CET - I ratio was 11.68% as of March 2016 as compared to 10.61% as of March 2015 and against the minimum requirement of 6.125%. The CRAR of Tier I capital was 12.08% as of March 2016 as compared to 10.61% as of March 2015 and as against the minimum requirement of 7.625%. RECRUITMENT / TRAINING • As per Government guidelines, pre-recruitment and pre-promotion trainings were offered to SC/ST employees during the process of direct recruitment and internal promotions CHANGESIN THE BOARD DURING THEYEAR • Shri. TMBhasin was Chairman & Managing Director upto March 31, 2015. • Shri. B Rajkumar, Executive Director demitted office on May 31, 2015 on superannuation. • Shri. T M Bhasin, Managing Director & CEO demitted office on June 10, 2015 on his appointment as Vigilance Commissioner in CVC. • Shri M K Jain, Executive Director was MD & CEO ( Additional Charge) from June 11 , 2015 to November 1, 2015. Shri M K Jain assumed charge as MD & CEO on November 2, 2015. Shri T C Venkat Subramanian assumed charge as Part-Time Non-Official Director & Non-Executive Chairman onAugust 14, 2015. Ms. Mudita Mishra was appointed as Government of India nominee to the Board on January 07, 2016 in place of Dr. N Srinivasa Rao who ceased to be Director from December 15, 2015. Shri. R Subramania Kumar assumed charge as Executive Director on January 22, 2016. Shri. A S Rajeev assumed charge as Executive Director on January 22, 2016. DIRECTORS' RESPONSIBILITY STATEMENT • The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2016: – • The applicable accounting standards have been followed along with proper explanation relating to material departures, 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 and of the profit of the Bank for the year ended March 31, 2016. • Proper and sufficient care were taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India; and • The accounts have been prepared on a going concern basis. ACKNOWLEDGEMENT The Board expresses its deep sense of gratitude to the Government of India, Reserve Bank of India and Securities & Exchange Board of India for the valuable guidance and support received from them. The Board also thank the financial institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders. The Board places on record its appreciation for the valuable contribution made by Shri T M Bhasin, Shri B Raj Kumar and Dr. N Srinivasa Rao who ceased to be members during the year. The Board places on record its appreciation for the dedicated services and contribution made by members of staff for the overall performance of the Bank. For and on behalf of Board of Directors MAHESH KUMAR JAIN Managing Director & CEO |