DIRECTORS’ REPORT 2015-16 Your 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, 2016. 1. PERFORMANCE HIGHLIGHTS • Total Business of the Bank increased by Rs. 5798 crore to Rs. 456337 crore from Rs. 450539 crore in previous year, registering y-o-y growth of 1.29 per cent. • Total Deposits increased by Rs. 10612 crore to Rs. 266184 crore, registering y-o-y growth of 4.15 per cent. • Total Advances of the Bank decreased by Rs. 4815 crore to Rs. 190152 crore, registering y-o-y decline of 2.47 per cent. • Operating Profit decreased to Rs. 2643 crore from Rs. 3559 crore in FY 2014-15, registering y-o-y decline of 25.74 per cent. • Net loss stood at Rs. 1418 crore in 2015-16 as against net profit of Rs. 606 crore in FY 2014-15. • Capital Adequacy Ratio (as per Basel-II) stood at 11.07 per cent with Tier I at 7.44 percent as against 11.89 per cent in previous year. Capital Adequacy Ratio (as per Basel III) stood at 10.41 per cent with Tier I at 8.20 percent as against 10.90 per cent in previous year. • Net worth stood at Rs. 14921.76 crore. • Gross NPA of the Bank increased by Rs. 10848 crore to Rs. 22721 crore from Rs. 11873 crore in previous year. In percentage term, Gross NPA stood at 11.95%. • Net NPA increased to Rs. 13242 crore from Rs. 6807 crore in previous year. In percentage term, Net NPA stood at 7.36%. • Provision Coverage Ratio (PCR) stood at 51.52 per cent in March 2016. • Net Interest Margin (NIM) stood at 2.75 per cent in FY 2015-16. • Business per Employee increased to Rs. 1195 lakh from Rs. 1138 lakh in previous year. • Return on Assets (ROA) is (0.48) per cent for the current financial year. • Credit to Priority Sector increased to Rs. 83030 crore from Rs. 75997 crore in previous year, recording y-o-y growth of 9.25 per cent. • Agriculture Advance of the Bank increased to Rs. 36833 crore from Rs. 35,957 crore in FY 2014-15 registering y-o-y growth of 2.44 per cent. • Advances to Micro & Small Enterprises (MSE) increased to Rs. 27800 crore during the year under review from Rs. 26503 crore in previous year. • Education Loan grew by 8.72 per cent during the year and the total loan reached to Rs. 3742 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 2015-16, the RSETIs conducted 1050 training programmes and imparted training to 28244 candidates. Out of this, 18926 (i.e.67%) trainees were settled through bank credit, wage settlement and self-finance. • Bank has 3 RRBs as on 31st March 2016 in 3 states covering 47 districts with a network of 1629 branches. • Under Financial Inclusion Bank has covered 4,330 villages with population above 2000 and 18,376 villages with population below 2000. Bank has covered all these villages through 6,387 BC Agents. We have opened 41 Urban Financial Inclusion centres in NCR and Bhopal Region. Bank has opened all its 3677 Ultra Small Branches attached to 1427 Base Branches. Bank has opened 157.26 lacs Basic Saving Bank Deposit Accounts (BSBDA) through its BCs and Branches. Total balance in these accounts is 1277.92 crores as on 31st March, 2016. • Under Pradhan Mantri Jan Dhan Yojana our Bank has opened 74.18 lacs BSBD accounts and increased business with a deposit of Rs. 870.60 Crores. • The corporate credit of the Bank decreased to Rs. 87,014 crore from Rs. 97,568 crore in previous year registering y-o-y reduction of 10.82 per cent. • The retail credit grew by 10.21 per cent from Rs. 34,939 crore in FY 2014-15 to Rs. 38505 crore in FY 2015-16. • Total earning from Bancassurance business is Rs. 19.48 crore for FY 2015-16. • As on 31st March 2016, Bank has a network of 4728 branches, 3677 ultra-small branches (USBs), 5254 ATMs, 29 Satellite Offices & 4 Extension Counters across the country. 2. INCOME & EXPENDITURE • Interest Income declined by 1.97 per cent during the year • Interest expenses on Deposits increased by 0.76 per cent to Rs. 17653 crore in March 2016 from Rs. 17520 crore in previous year. • Expenses on employees increased by Rs. 640 crore during the year to Rs. 4465 crore from Rs. 3825 crore in previous year. 3. PROVISIONS Details of Total Provisions of Rs. 4061 crore charged to the Profit and Loss Account during the year 2015-16 vis-a-vis previous year are detailed as under: 4. NET LOSS The Bank has incurred net loss amounting to Rs. 1418 crore during the financial year ended March 31, 2016. Accordingly, Board of Directors has not recommended any dividend on equity shares for the Financial Year 2015-16. 5. 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 M.P.Shorawala ceased to be the Part-Time Non-official Director of the Bank w.e.f. close of working hours on 02.01.2016 consequent upon completion of his three years’ tenure. • Shri Krishan Sethi ceased to be the Part-Time Non-official Director of the Bank w.e.f. close of working hours on 27.02.2016 consequent upon completion of his three years’ tenure. The Board places on record its appreciation of valuable contribution extended by Shri M.P.Shorawala and Shri Krishan Sethi, who ceased to be the directors of the Bank during Financial Year 2015-16. 6. 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. 7. DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that in the preparation of the annual accounts for the financial year ended March 31, 2016: • 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 financial year ended March 31,2016; • 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. 8. 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. 9. ACKNOWLEDGEMENT The Board of Directors places on record its gratitude to the Government of India, Reserve Bank of India and the Securities 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 Sd/- Rajeev Rishi Chairman & Managing Director Place : Mumbai Date : May 27, 2016 |