directors’ report - lakshmi vilas bank 2004... · 2019-06-05 · tie-ups with reliance capital...
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ANNUAL REPORT 2004-05 1
TO THE MEMBERS
Your Directors have great pleasure in presenting the
Seventy Eighth Annual Report on the business and
operations of your Bank together with the Audited Accounts
for the year ended 31st March, 2005.
PERFORMANCE
During the year under review, your Bank attained
business turnover of Rs.5814 crores with total income of
Rs.336.52 crores and operating profit of Rs.54.71 crores.
The Bank could register a Net Profit of Rs.3.34 crores
DIRECTORS’ REPORT
only as compared to Rs.41.05 crores in the previous year.
The fall was essentially due to the provision that had to
be made to cover diminution in value of Government
Securities due to steep rise in yield from 5.16% as on
31.03.2004 to 6.68% as on 31.03.2005. As a matter of
prudence, the Bank maintained an Investment Fluctuation
Reserve of Rs.35.99 crores (7.55% of the investments
held in the HFT and AFS categories, which was much
higher than the figure of 5% stipulated by RBI).
A new product called “Lakshmi Savings Suraksha” has
been launched at select branches of the bank, which is a
value added Savings account that gives life protection to
the account holders under a group insurance package in
association with Aviva Life Insurance . The said savings
product which covers Life Risk and Double Accident
Benefit to the eligible members to the extent of Rs.1.00
lakh for Life Risk and Rs.2.00 lakhs for Accident Benefit
is presently available at Metro and Urban branches.
In line with recommendations of Management Consultants
M/s Deloitte Touche Tohmatsu three Strategic Business
Units (SBU) have been formed by re-organising top
management structure to achieve effective and focused
direction across products/ Business.
APPROPRIATIONS
Appropriations from operating profit have been effected
as detailed below:
Particulars (Rs. in crores)For the year ended
31st March 31st March2005 2004
Operating Profit 54.71 91.00
Provisions and contingencies 51.37 49.95
Net Profit 3.34 41.05
Profit brought forward 0.22 0.09
Amount available for appropriation 3.56 41.14
Transfer to:
Statutory Reserve 0.85 14.00
Capital Reserve 2.49 5.43
Investment Fluctuation Reserves 0.00 13.75
Other Reserve 0.00 1.25
Proposed Dividend 0.00 5.76
Corporate Dividend Tax 0.00 0.73
Balance of Profit Carried forward 0.22 0.22
ANNUAL REPORT 2004-05 2
Your bank successfully raised its Tier I capital by way of
Rights issue priced at Rs.55/- per share (payable on
application – Rs 25/- per share and on allotment Rs.30/-
per share) in the ratio of 7: 10. With this rights issue, the
net worth of the Bank increased to Rs.256.86 crores as
on 16.07.2005. The directors of your Bank thank you for
your overwhelming support for the rights issue of the
Bank.
LISTING AGREEMENT WITH STOCK EXCHANGE
As you are aware, your Bank’s shares were initially listed
on the National Stock Exchange and Madras Stock
Exchange. However in terms of the resolution passed by
shareholders of the Bank in the Annual General Meeting
held on 29.07.2004, the Bank’s shares were since got
de-listed from the Madras Stock Exchange as such the
equity shares continue to be listed and traded in the
National Stock Exchange which has trading terminals all
over the country.
RESOURCES AND LENDINGS
The overall performance during the financial year 2004-05
remained good. The Bank’s total business crossed
Rs.5814 crores. Aggregate deposits reached Rs.3495.92
crores with net accretion of Rs.200.11 crores. The Bank’s
credit portfolio, net of provisions, increased to Rs.2317.71
crores from Rs.2038.70 crores in the previous year, a rise
of over Rs.279 crores.
DIVIDEND
In order to retain the entire earnings within the system
thereby, and as a matter of abundant prudence, your
Directors have proposed that the Bank may not declare
any dividend for the year 2004-05.
NETWORTH AND CAPITAL ADEQUACY
Your Directors have proposed net transfer of Rs.3.34
Crores to reserve, which would increase the net worth of
your bank from Rs.226.64 Crores to Rs.229.98 Crores.
Your Bank has raised by way of Unsecured, Redeemable,
Non-convertible Subordinated bonds - Series (IV A –
Rs.19 crores allotted on 31.03.2005 & IV B- Rs.11 crores
allotted on 31.05.2005) rated “A” by CARE. Instruments
with this rating are considered upper medium grade
instruments and have many favourable investment
attributes indicating adequate safety for principal and
interest.
Your Bank’s Capital Adequacy Ratio (CRAR) stood at a
healthy 11.32 % as on March 31, 2005, well above the
regulatory minimum of 9.00% stipulated by RBI.
The Tier-I and Tier-II components of Capital Adequacy
Ratio were 5.67 % and 5.65% respectively as on March
31, 2005.
ANNUAL REPORT 2004-05 3
Advances under Priority Sector during the year were at
Rs.950.43 crores, constituting 41% of the adjusted net
bank credit, as against the stipulated norm of 40%.
QUALITY OF LOAN ASSETS
As a result of concerted efforts initiated on the recovery
front, the gross NPAs reduced from 10.15% in the
previous year to 7.88% and the net NPAs from 5.40%
to 4.98%.
INVESTMENT OPERATIONS
In order to insulate the Government securities portfolio
from future interest rate risk and adverse market
movements, the Bank has opted to prune the excess
securities held. Besides, for the same purpose, the Bank
has shifted Government securities worth Rs.549.23 crores
from AFS category to HTM category, incurring depreciation
to the tune of Rs.35.75 crores.
The Bank’s total investments as at 31st March 2005 were
Rs.1180.86 crores.
FOREX OPERATIONS
The Bank’s merchant turnover in foreign exchange
transactions were Rs.1421.65 crores as compared to
Rs.1402.29 crores during the previous year.
NETWORK EXPANSION
The bank has opened one new branch at Anna Nagar,
Chennai during the year and two existing branches
namely C.Pudupatty and Anbil have been converted into
satellite offices. The bank has 225 branches as on
31.03.2005 spread across 9 states and Union Territory
ANNUAL REPORT 2004-05 4
of Pondicherry including 5 satellite branches. Plans are
afoot to open 6 more at different centres for which licences
from RBI have been obtained.
INFORMATION TECHNOLOGY
During the year a wide area network (WAN) has been
launched, inter connecting branches at 30 locations,
initially. The Bank has plans to network all the branches
in phases, so that the latest technology enabled services
and products can be extended to our customers.
A pilot project of launching Core Banking Software (CBS)
at six branches has been completed. On examining the
efficacy thereof a comprehensive view in transforming
your Bank into a State-of-the-Art Technology drive will
be taken. The Bank’s in-house developed Total Branch
Automation (TBA) software LBS2001 was enhanced to a
contemporary technical platform. The number of Totally
Computerized Branches stand increased to 150, by an
addition of 50 branches during the year.
An ATM Cell has been created to cater to the ATM services
extended by the Bank. Real Time Gross Settlement
system ( RTGS ) has been implemented and made live at
our Investment Cell, Mumbai and all interbank
transactions have been, since migrated to the RTGS
system.
Several in-house utilities software have been developed
and provided to branches, making them more productive
and efficient. An Integrated Management Information
Systems (IMIS) has been introduced at 3 pilot branches.
HUMAN RESOURCES
Appreciating and recognizing the value of Human
resources, the Bank continued to focus on training its
employees on a continuing basis on-job and through
training programmes conducted with internal and external
faculty to keep them abreast of the changing competitive
environment. As on 31st March 2005, the Bank had a
staff strength of 1928 including 765 officers. Business
per employee increased to Rs.308.00 lakhs from
Rs.276.00 lakhs as at the previous year. During the year,
as part of the continuous efforts of the Bank to motivate
and reward performing employees, 88 employees in
different cadres, were promoted. Bank has also directly
recruited the required personnel for appropriate
placements during the year. The relationship with staff
has been cordial.
FEE BASED VENTURES
The bank in tune with the market demand and as value
addition to customers has diversified into undertaking
distribution of Life Insurance products as Corporate Agent
for AVIVA Life Insurance, one of the world’s largest Life
Insurance Company, which is yet another milestone in
its commendable history. 45 trained personnel of the
Bank in Bancassurance are dealing with AVIVA’s
customized life insurance products. During the year under
perusal, about 4200 proposals have been procured for
an insurance coverage of over Rs.41 crores. The Bank
has collected a gross insurance premium of around
Rs.10.68 crores and received a commission payment of
Rs.86.13 Lakhs, in the first year of operation. The bank
has plans to expand insurance marketing in Maharastra,
Gujarat and Karnataka shortly.
Subsequent to the Bancassurance tie-up with
M/s. Royal Sundaram Alliance Insurance Co. Ltd. for
ANNUAL REPORT 2004-05 5
non-life business, our bank is instrumental in collecting
a gross premium (non-life) of Rs.1.45 crores out of our
referrals, thereby earning Rs. 16.55 lakhs in the FY 2004-
05. Plans to distribute personal non-life products such
as Health Insurance, Accident Insurance , Household
Insurance etc., in the near future are under active
consideration.
As for Mutual Fund, at present our Bank has distribution
tie-ups with Reliance Capital Asset Management Limited
& Franklin Templeton Asset Management (India ) Private
Limited. Out of these cross selling activities, we could
mobilise Rs.1.02 crores and earn a commission of Rs. 2.23
lacs in the FY 2004-05. We plan to have a distribution
tie-up with more such reputed mutual fund to achieve a
quantum jump in our parabanking activities.
RISK MANAGEMENT
The steps initiated by the bank during the previous years
in the area of risk management continued to receive
focused attention, in tune with the regulatory guidelines
and dynamic business scenario. The bank has taken pro-
active steps to implement the best risk management
practices, covering Credit Risk, Market Risk and
Operational Risk, in line with strategic perspective, size
and complexities of bank’s business.
The Integrated Risk Management Policy, highlighting the
risk management philosophy, risk identification criteria,
systems for measurement, monitoring and control of
risk, risk quantification techniques, risk mitigation and
regulatory compliance which was put in place during the
previous year has been modified and fine-tuned to meet
the dynamic changes in business environment and
corporate objectives.
Pro-active steps have been taken to introduce a
framework for parallel calculation of Economic Capital as
per Basel II norms likely to be applicable from 31/03/06,
and to ensure compliance therewith.
DIRECTORS
Mr. C. Krishnakumar resigned from the Board on the
31st March,2005. Mr. A. Krishnamoorthy then Chairman
and Chief Executive Officer on his resignation , has been
relieved on 15.04.2005. Mr. V.N. Krishnamurthy resigned
from the Board on 30th August,2005. The directors place
on record their appreciation of the valuable services
rendered by Mr C.Krishnakumar, Mr. A. Krishnamoorthy
and Mr. V.N. Krishnamurthy during their tenure.
Mr. R. M. Nayak has been co-opted as an Additional
director in the meeting of the Board of Directors held on
20th June,2005 pursuant to section 260 of the Companies
Act,1956. Subsequently he assumed as Chairman and
Chief Executive Officer of the Bank effective from 20th
June,2005 as per the approval of Reserve Bank of India.
Mr. V. Umasankar was appointed as additional director
on the Board with effect from 30th August 2005 pursuant
to Section 260 of the Companies Act, 1956.
Mr. K. Balaji was appointed as additional director on the
Board with effect from 30th August 2005 pursuant to
Section 260 of the Companies Act, 1956.
Mr. M. P. Shyam and Mr. D.L. Suresh Babu, Directors are
due to retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for
re-appointment.
AUDITORS
The statutory auditors M/s. S.Viswanathan, Chartered
Accountants, Chennai and M/s.Abarna & Ananthan,
Chartered Accountants, Bangalore are retiring at this
Annual General Meeting. M/s Abarna & Ananthan,
Chartered Accountants, Bangalore had been the joint
Statutory Auditors of your Bank since 2001 completed
consecutive 4 years period, they cannot be considered
for re-appointment as per the extant regulatory guidelines
of RBI. Your directors therefore proposed to appoint
M/s. N.B. Shetty & Co., Chartered Accountants, Mumbai
and proposed to re-appoint M/s S.Viswanathan,
Chartered Accountants,Chennai as the joint Statutory
Auditors of the Bank at the forthcoming Annual General
Meeting of the Bank as approved by Reserve Bank of
India under Section 30 (1A) of the Banking Regulation
Act, 1949.
ANNUAL REPORT 2004-05 6
Your directors place on record their appreciation for the
professional services rendered by M/s. Abarna &
Ananthan, as the Statutory Auditor of the Bank.
The statutory audit of the Bank was carried out by
M/s. Abarna & Ananthan, Chartered Accountants,
Bangalore and M/s. S. Viswanathan , Chartered Accountants,
Chennai whose report is attached herewith. The Statutory
Central and Branch Auditors audited all the branches and
other offices of the Bank.
Explanations is offered below on the auditors’ reference
in their report vide
I) Point no.11 a) Note no. 1(b) of Schedule 17 to the
accounts regarding the effect of adjustments arising
in tallying of balances in the accounts as per General
Ledger with those of subsidiary ledgers, the quantum
of which is not ascertained.
Tallying of balances in the accounts as per General
Ledger with those of subsidiary ledgers / registers/
schedules is in progress and accounts tallied till date
have not materially affected the published accounts.
II) Point no.11 b) Note no. 6 in Schedule 17 regarding
provision for wage arrears. Pending exact
quantification, we are unable to comment on the
adequacy of the same.
The Bank is in the process of working out the
additional liability towards salaries and wages arising
on account of the settlement reached in this regard
by the Indian Banks’ Association with the trade
unions representing employees.Pending calculation
of actual liability, a provision of Rs.4.25 crores
(P.Y.Rs.4.25 cr) has been made during the year on
an estimated basis. The Bank holds a total provision
of Rs.8.50 crores as at year – end towards this
liability, which is considered by management as
adequate.
STATUTORY DISCLOSURE
Given the nature of the Bank’s operations, the requirement
of disclosure of steps taken for conservation of energy
and technology absorption does not apply to the Bank.
The Bank is fully cognizant of the need to step up the
country’s exports and accordingly endeavors to enlarge
its export financing. None of the Bank’s employees falls
within the purview of section 217(2A) of the Companies
Act, 1956.
CORPORATE GOVERNANCE
The basic philosophy of Corporate Governance of the Bank
is relating to enhancing contributory value addition to
our customers, employees, stakeholders and the society.
The Bank has fully complied with the code of corporate
governance as enumerated in Clause 49 of the Listing
Agreement. Board of Directors executed deed of covenant
and undertaking individually in line with Dr.Ganguly
Committee Report. Pursuant to Clause 49 of the Listing
Agreement, a Management Discussion and Analysis is
presented in Annexure-A, Report on Board Committees
is furnished in Annexure-B. Composition of the Board of
Directors together with the attendance of Directors at
various meetings of the Board, its Committees and Annual
General Meeting and the number of directorships held by
them alongwith the details of Audit Committee and Share
Transfer Greivances Committee are furnished in
Annexure-C. General Shareholders’ information is
furnished in Annexure-D.
DIRECTORS’ RESPONSIBILITIES STATEMENT
The Directors confirm that in the preparation of the annual
accounts for the year ended March 31, 2005:
• 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 applied
consistently ;
ANNUAL REPORT 2004-05 7
Place : KARUR For and on behalf of the Board of Directors
Date : 30.08.2005 R. M. NAYAKChairman
• reasonable and prudent judgement and estimates were
made wherever required so as to present a true and
fair view of the state of affairs of the Bank as at the
end of the financial year and the profit of the Bank for
the year ended on March 31, 2005;
• proper and sufficient care was 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 places on record its sincere thanks to the
shareholders, depositors and other clientele for their
continued support. Board gratefully extends its thanks
for the support and guidance accorded by RBI,
Government Agencies and host of other institutions.
Your Directors express their appreciation for the
commendable contributions made by staff at all levels.
ANNUAL REPORT 2004-05 8
AUDITORS’ REPORT
M/s. ABARNA & ANANTHAN M/s. S VISWANATHAN
CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS
BANGALORE - 560 085. CHENNAI - 600 004.
1) We have audited the attached Balance Sheet of THE
LAKSHMI VILAS BANK LIMITED, KARUR as at 31st
March 2005, the annexed Profit and Loss Account
and also the Cash Flow Statement for the year ended
on that date in which are incorporated the returns
of 42 Branches, 8 Divisional Offices, 6 Service
Branches and 3 other offices audited by us and 178
Branches audited by Branch auditors appointed
u/s. 228(4) of the Companies Act, 1956. There are
no unaudited branches or other offices. These
financial statements are the responsibility of the
Bank’s management. Our responsibility is to express
our opinion on these financial statements based on
our audit.
2) We conducted our audit in accordance with auditing
standards generally accepted in India. Those
standards require that we plan and perform the audit
to obtain reasonable assurance about whether the
financial statements are free of material
misstatements. An audit includes examining on a
test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also
includes assessing the accounting principles used
and significant estimates made by management, as
well as evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
3) The Balance Sheet and the Profit & Loss account
have been drawn up in accordance with the
provisions of Section 29 of Banking Regulation Act,
1949 read with Section 211 of the Companies Act,
1956.
4) The reports on the accounts of the branches audited
by Branch Auditors have been dealt with in preparing
our report in the manner considered necessary by
us.
5) We have obtained all the information and
explanations which, to the best of our knowledge
and belief were necessary for the purposes of our
audit and have found them to be satisfactory.
6) The transactions of the Bank, which have come to
our notice, have been within the powers of the Bank.
7) In our opinion, proper books of accounts as required
by law have been kept by the Bank so far as appears
from our examination of those books and proper
returns adequate for the purpose of our audit have
been received from the branches of the Bank.
8) The Bank’s Balance Sheet and Profit and Loss
Account dealt with by this report are in agreement
with the books of account and audited returns from
the branches of the Bank.
9) In our opinion, the Balance Sheet and Profit and
Loss Account dealt with by this report comply with
the Accounting Standards referred to in sub-section
(3C) of the Section 211 of the Companies Act, 1956.
10) On the basis of written representations received
from the Directors and taken on record by the Board
of Directors, we report that none of the directors is
disqualified as on 31st March 2005 from being
appointed as a Director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies
Act, 1956.
ANNUAL REPORT 2004-05 9
for M/s. Abarna & Ananthan for M/s. S. ViswanathanChartered Accountants Chartered Accountants
S. Ananthan R. M. NarayananPartner PartnerMembership No:26379 Membership No: 25650
Place: Karur
Date: 27th June 2005
11) Reference is invited to
a) Note no. 1(b) of Schedule 17 to the
accounts regarding the effect of adjustments
arising in tallying of balances in the accounts
as per General Ledger with those of subsidiary
ledgers, the quantum of which is not
ascertained.
b) Note no. 6 in Schedule 17 regarding
provision for wage arrears. Pending exact
quantification, we are unable to comment on
the adequacy of the same.
12) Subject to para 11 above, in our opinion and to
the best of our information and according to the
explanations given to us, the said accounts together
with notes thereon, give the information required
by the Companies Act, 1956 in the manner so
required for Banking Companies and on such basis
give a true and fair view
(i) In the case of the Balance Sheet, of the State of
Affairs of the Bank as at 31st March 2005;
(ii) In the case of the Profit & Loss Account, of the Profit
of the Bank for the year ended on that date; and
(iii) In the case of the Cash Flow Statement, of the cash
flows for the year then ended
and are in conformity with the Accounting Principles
generally accepted in India.
ANNUAL REPORT 2004-05 10
BALANCE SHEET AS ON 31st MARCH 2005
As per our report of date annexedfor M/s Abarna & AnanthanChartered Accountants
S AnanthanPartnerMembership No:26379
for M/s S ViswanathanChartered Accountants
R M NarayananPartnerMembership No: 25650
Karur27th June 2005
DIRECTORS
N. Malayala Ramamirtham
S.G. Prabhakharan
D.L. Suresh Babu
K.B. Krishnan
M.P. Shyam
V.N. Krishnamurthy
R. Dhandapani
(Rs. in 000s)
SCHEDULE As at As at
31/03/2005 31/03/2004
I. CAPITAL & LIABILITIES
a. Capital 1 115089 115089
b. Reserves & Surplus 2 2184783 2151339
c. Deposits 3 34959251 32958191
d. Borrowings 4 689437 302285
e. Other Liabilities & Provisions 5 2585258 2686602
T O T A L . . . 40533818 38213506
II. ASSETS
a. Cash & Balances with Reserve Bank of India 6 2587780 2303940
b. Balances with Banks and Money atCall & Short Notice 7 954597 497313
c. Investments 8 11808614 13381681
d. Advances 9 23177114 20387040
e. Fixed Assets 10 341079 313135
f. Other Assets 11 1664634 1330397
T O T A L . . . 40533818 38213506
Contingent Liabilities 12 8450419 8761595
Bills for collection 1328269 1659409
Significant Accounting Policies and Notes on Accounts 17
Schedules 1 to 12 and 17 form part of this Balance Sheet.
R.M. NayakChairman
B. RadhakrishnanSr. General Manager
N. RamalinkgamGeneral Manager
N. Giridharan
General Manager
R. Sridharan
Deputy General Manager
ANNUAL REPORT 2004-05 11
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2005(Rs. in 000s)
SCHEDULE Year Ended Year Ended
31/03/2005 31/03/2004
I. INCOME
a. Interest Earned 13 2982042 2859544
b. Other Income 14 383200 868624
T O T A L . . . 3365242 3728168
II. EXPENDITURE
a. Interest Expended 15 1915357 2025139
b. Operating Expenses 16 902788 835497
c. Provisions & Contingencies 513653 457047
T O T A L . . . 3331798 3317683
III. NET PROFIT FOR THE YEAR 33444 410485
Profit brought forward 2197 859
T O T A L . . . 35641 411344
IV. APPROPRIATIONS
a. Transfer to Statutory Reserve 8500 140000
b. Transfer to Capital Reserve 24944 54229
c. Transfer to Investment Fluctuation Reserve 0 137500
d. Transfer to Other Reserves 0 12500
e. Proposed Dividend 0 57545
f. Tax on Proposed Dividend 0 7373
g. Balance carried over to Balance Sheet 2197 2197
T O T A L . . . 35641 411344
Earnings Per Share - Basic (Rs.) [Refer Note 5(d)] 2.91 35.67
Schedules 13 to 16 and 17 form part of this Profit & Loss Account
R.M. NayakChairman
B. RadhakrishnanSr. General Manager
N. RamalinkgamGeneral Manager
N. Giridharan
General Manager
R. Sridharan
Deputy General Manager
As per our report of date annexedfor M/s Abarna & AnanthanChartered Accountants
S AnanthanPartnerMembership No:26379
for M/s S ViswanathanChartered Accountants
R M NarayananPartnerMembership No: 25650
Karur27th June 2005
DIRECTORS
N. Malayala Ramamirtham
S.G. Prabhakharan
D.L. Suresh Babu
K.B. Krishnan
M.P. Shyam
V.N. Krishnamurthy
R. Dhandapani
ANNUAL REPORT 2004-05 12
(Rs. in 000s)As at As at
31/03/2005 31/03/2004
SCHEDULE 1 - CAPITAL
AUTHORISED CAPITAL
(20000000 equity shares of Rs.10/- each) 200000 200000
ISSUED CAPITAL
(11577087 equity shares of Rs.10/- each) 115771 115771
Subscribed, Called-up and Paid Up Capital 115089 115089
(11508902 equity shares of Rs.10/- each)
(of which 2887563 equity shares of
Rs.10/- each issued by way of Bonus
Shares as fully paid)
T O T A L . . . 115089 115089
SCHEDULE 2 - RESERVES & SURPLUS
I. STATUTORY RESERVE
Opening Balance 1203472 1063472
Additions during the year 8500 140000
1211972 1203472
II. CAPITAL RESERVE
Opening Balance 143403 89174
Additions during the year 24944 54229
168347 143403
III. SHARE PREMIUM
Opening Balance 144194 144194
Additions during the year 0 0
144194 144194
IV. REVENUE & OTHER RESERVES
A. INVESTMENT FLUCTUATION RESERVE
Opening Balance 359915 222415
Additions during the year 0 137500
359915 359915
B. OTHER RESERVES
Opening Balance 298158 285658
Additions during the year 0 12500
298158 298158
Deductions during the year 0 0
298158 298158
V. BALANCE IN PROFIT & LOSS ACCOUNT 2197 2197
T O T A L . . . 2184783 2151339
ANNUAL REPORT 2004-05 13
SCHEDULE 3 - DEPOSITS
A. I. DEMAND DEPOSITS
1. From Banks 33212 46424
2. From Others 4236750 4053520
4269962 4099944
II. SAVINGS BANK DEPOSITS 4685595 4377299
III. TERM DEPOSITS
1. From Banks 1594601 641800
2. From Others 24409093 23839148
26003694 24480948
T O T A L (I + II + III) 34959251 32958191
B I. DEPOSITS OF BRANCHES IN INDIA 34959251 32958191
II. DEPOSITS OF BRANCHES OUTSIDE INDIA NIL NIL
T O T A L . . . 34959251 32958191
SCHEDULE 4 - BORROWINGS
I. BORROWINGS IN INDIA
1. Reserve Bank of India 0 0
2. Other Banks 0 0
3. Other Institutions & Agencies 284137 76185
284137 76185
II. BORROWINGS OUTSIDE INDIA 405300 226100
T O T A L . . . (I + II) 689437 302285
SECURED BORROWINGS
INCLUDED IN I & II ABOVE 0 0
SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS
I. Bills payable 567098 529931
II. Inter-office adjustments (net) 183255 414898
III. Interest accrued 157616 157186
IV. Unsecured Sub-ordinated Debts 1098000 908000
V. Deferred Tax Liability (net) 0 1460
VI. (i) Others - (including Provisions) 523789 626627
(ii) Contingent Provisions against Standard Assets 55500 48500
(iii) Provision for recognition of loan impairment on 90 days norms 0 0
T O T A L . . . 2585258 2686602
(Rs. in 000s)As at As at
31/03/2005 31/03/2004
ANNUAL REPORT 2004-05 14
SCHEDULE 6 - CASH AND BALANCES WITH
RESERVE BANK OF INDIA
Cash in Hand (including foreign Currency Notes) 420532 387008
Balances with Reserve Bank of India
i) in current account 2167248 1916932
ii) in other accounts 0 0
T O T A L . . . 2587780 2303940
SCHEDULE 7 - BALANCES WITH BANKS & MONEY AT
CALL AND SHORT NOTICE
I. IN INDIA
i) Balance with Banks
a. in current accounts 171873 196757
b. in other deposit accounts 625000 243300
796873 440057
ii) Money at call and short notice
a. with banks 0 0
b. with other institutions 0 0
T O T A L . . . (i + ii) 796873 440057
II. OUTSIDE INDIA IN CURRENT ACCOUNTS 157724 57256
T O T A L . . . (I + II) 954597 497313
SCHEDULE 8 - INVESTMENTS
I. INVESTMENTS IN INDIA IN
I. Government Securities [incl.treasury bills & zero coupon bonds] 10704248 10840136
II. Other approved securities 168851 287658
III. Shares 39185 65858
IV. Debentures & Bonds 450890 1083341
V. Subsidiaries and Joint Ventures 0 0
VI Others [including Commercial Paper, Mutual Funds, NSC, 445440 1104688
Units, etc.]
T O T A L . . . 11808614 13381681
GROSS INVESTMENTS IN INDIA 12228512 13629479
LESS : DEPRECIATION 419898 247798
NET INVESTMENTS IN INDIA 11808614 13381681
II. INVESTMENTS OUTSIDE INDIA NIL NIL
T O T A L . . . 11808614 13381681
(Rs. in 000s)As at As at
31/03/2005 31/03/2004
ANNUAL REPORT 2004-05 15
(Rs. in 000s)As at As at
31/03/2005 31/03/2004
SCHEDULE 9 - ADVANCES
A. I. Bills purchased & discounted 2095930 2066953II. Cash credits, overdrafts & loans repayable on demand 12203687 9936725III. Term loans 8877497 8383362
T O T A L . . . 23177114 20387040
B. PARTICULARS OF ADVANCES
I. Secured by tangible assets [incl. advances against Book Debts] 20656064 17452929II. Covered by Bank / Govt. Guarantees 609956 1039215III. Unsecured 1911094 1894896
T O T A L . . . 23177114 20387040
C. SECTORAL CLASSIFICATION OF ADVANCES
I. Priority Sector 9504300 7654454II. Public Sector 1495540 754964III. Banks 97786 76434IV. Others 12079488 11901188
T O T A L . . . 23177114 20387040
SCHEDULE 10 - FIXED ASSETS
I. PREMISES
At Cost 213080 209227Additions during the year 15837 7076
228917 216303Deductions during the year 0 3223
228917 213080Depreciation to date 61873 54617
167044 158463
II. OTHER FIXED ASSETS (INCLUDING FURNITURE & FIXTURES)At Cost 489216 429263Additions during the year 73671 61145
562887 490408Deductions during the year 815 1192
562072 489216Depreciation to date 394525 341032
167547 148184
III. ASSETS ON LEASE
At Cost 130975 130975Additions during the year 0 0
130975 130975Deductions during the year 0 0
130975 130975Depreciation to date 109577 109577
21398 21398Lease adjustment account 14910 14910
6488 6488
T O T A L . . . 341079 313135
ANNUAL REPORT 2004-05 16
SCHEDULE 11 - OTHER ASSETS
I. Inter-Office Adjustments (Net) 0 0
II. Interest Accrued 266565 328476
III. Tax Paid in Advance and Tax Deducted at Source 874594 801732
IV. Deferred Tax Asset (Net) 318908 0
V. Stationery & Stamps 6776 6572
VI. Non Banking Assets acquired in satisfaction of claims 17840 17840
VII. Others 179951 175777
T O T A L . . . 1664634 1330397
SCHEDULE 12 - CONTINGENT LIABILITIES
I. Claims against the Bank not acknowledged as debts 655994 524051
II. Liability for partly paid Investments 0 0
III. Liability on account of outstanding forward exchange contracts 5224584 5661372
IV. Guarantees given on behalf of constituents - in India 1011295 1182022
- outside India 230 0
V. Acceptances, Endorsements & other obligations 1556466 1384461
VI. Other items for which the Bank is contingently liable 1850 9689
T O T A L . . . 8450419 8761595
SCHEDULE 13 - INTEREST EARNED
I Interest / discount on advances / bills 1868532 1805712
II. Income on Investments 1075483 1009960
III. Interest on balance with Reserve Bank of India & other inter-bank Funds 32607 39158
IV. Others 5420 4714
T O T A L . . . 2982042 2859544
(Rs. in 000s)As at As at
31/03/2005 31/03/2004
(Rs. in 000s)
Year ended Year ended31/03/2005 31/03/2004
ANNUAL REPORT 2004-05 17
SCHEDULE 14 - OTHER INCOME
I. Commission, Exchange and Brokerage 288285 274209
II. Profit on sale of Investments 49808 350962
Less: Loss on sale of Investments 124510 111010
-74702 239952
III. Profit on sale of land, Buildings & Other Assets 851 232
Less: Loss on sale of land, Buildings & Other Assets 634 579
217 -347
IV. Profit on Exchange Transactions 50568 55900
Less: Loss on Exchange Transactions 0 12814
50568 43086
V. Income earned by way of Dividends from Companies in India 34363 245187
VI. Lease Rentals 0 0
VII. Miscellaneous Income 84469 66537
T O T A L . . . 383200 868624
SCHEDULE 15 - INTEREST EXPENDED
I. Interest on Deposits 1803527 1923765
II. Interest on Reserve Bank of India / Inter-Bank Borrowings 18253 31309
III. Others 93577 70065
T O T A L . . . 1915357 2025139
SCHEDULE 16 - OPERATING EXPENSES
I. Payments to and Provision for Employees 471664 505226
II. Rent, Taxes & Lighting 73407 67262
III. Printing & Stationery 12252 13849
IV. Advertisement & Publicity 8033 8334
V. Depreciation on Bank’s Property 60751 49646
VI. Director’s fees, allowances 1685 1970
VII. Auditors’ fees & Expenses (incl. Branch Auditors) 1698 1773
VIII. Law Charges 6721 14969
IX. Postage, Telegrams, Telephones, etc., 26522 26086
X. Repairs & Maintenance 4077 4129
XI. Insurance 28034 13183
XII. Other Expenditure 207944 129070
T O T A L . . . 902788 835497
(Rs. in 000s)Year ended Year ended
31/03/2005 31/03/2004
ANNUAL REPORT 2004-05 18
SCHEDULE 17
A. SIGNIFICANT ACCOUNTING POLICIES
1. General:
The financial statements have been prepared in
accordance with the historical cost convention except
where otherwise stated and conform to the statutory
provisions and practices prevailing within the
banking industry in India and the guidelines /
instructions of Reserve Bank of India issued from
time to time.
2. Foreign Exchange Transactions:
(a) Foreign Currency Assets and Liabilities have
been translated at the exchange rates
prevailing at the close of the year as per the
guidelines issued by FEDAI. The resultant profit
or loss is accounted for.
(b) Income and Expenditure in foreign currency
are translated at the exchange rates prevailing
on the date of the respective transaction.
3. Investments:
Investments are categorised under the heads ‘Held
to Maturity’, ‘Available for Sale’ and ‘Held for Trading’
and are valued in aggregate for each category, in
accordance with the guidelines of the Reserve Bank
of India.
4. Advances:
4.1 In accordance with the prudential norms issued
by RBI:
(i) Advances are classified into standard, sub-
standard, doubtful and loss assets
borrower-wise;
(ii) Provisions are made for loan losses, and
(iii) General provision for standard advances
is made.
4.2 Advances disclosed are net of provisions made
for non-performing assets.
5. Fixed Assets:
(a) Fixed Assets have been accounted for at their
historical cost.
(b) Depreciation on assets other than computers
has been provided for on the diminishing
balance method at the rates specified in
Schedule XIV to the Companies Act, 1956.
(c) Depreciation on computers has been provided
for on straight-line method at the rate of 33.33
per cent as per the guidelines issued by the
Reserve Bank of India.
(d) Operating Software, which is an integral part
of hardware, is capitalized and depreciation is
provided for at the rate of 33.33% on straight-
line method.
(e) For premises, in which land cost and
construction cost could not be ascertained
separately, depreciation is provided for on the
total cost.
(f) None of the fixed assets have been revalued
during the year.
6. Staff Benefits:
Annual contribution to the approved Employees’
Gratuity Fund, approved Pension Fund and provision
for Leave Encashment have been made on actuarial
basis. Contribution to Provident Fund is accounted
for on actual basis.
7. Taxes on Income:
Provision for taxation is made on the basis of the
estimated tax liability with adjustment for deferred
tax in terms of the Accounting Standard 22
(Accounting for Taxes on Income) formulated by
the Institute of Chartered Accountants of India.
8. Recognition of Income and Expenditure:
(a) Income and Expenditure are accounted for on
accrual basis.
(b) The following items of income are recognized
on realization basis, owing to the significant
uncertainty in collection thereof:
(i) Interest and lease income on non-performing
advances, including overdue bills.
(ii) Interest on non-performing investments.
9. Net profit:
The net profit as per the Profit & Loss account is
arrived at after necessary provisions towards-
ANNUAL REPORT 2004-05 19
1. Taxation.
2. Advances and other assets.
3. Shortfall in the value of investments
4. Retirement benefits.
All provisions have been made as per Reserve Bank of
India guidelines and to the satisfaction of the auditors.
10. Accounting Standards:
Accounting Standards as specified in section 211(3C)
of the Companies Act 1956, to the extent they are
applicable to Banking Companies and as per
directions issued by the RBI from time to time, have
been followed.
B. NOTES ON ACCOUNTS
1. (a) Reconciliation of inter branch transactions
is completed upto 31.03.2005.
(b) In a few branches, tallying of the balances
in the accounts as per General Ledger with
those of subsidiary ledgers/registers/
schedules is in progress. The effect of
this on the profit of the Bank is not
ascertainable.
2. “Payment to and Provision for Employees”
includes remuneration paid to Chairman and
Chief Executive Officer of the Bank as detailed
below:
Sri. A.Krishnamoorthy 2004-2005 2003-2004
Consolidated Pay 12,73,548 9,10,323
Employers’ contribution to
Provident Fund 1,27,355 91,032
Leave encashment - -
Gratuity - -
Monetary value of perquisites # 27,954 25,429
Total 14,28,857 10,26,784
# (at cost in terms of amended provisions of Sec.217
(2A) of the Companies Act, 1956)
3. (a) The computation of Income as per provisions
of The Income Tax Act, 1961 results in a loss
for the year under consideration. In this
computation, the bank has considered certain
deductions based on judicial pronouncements
and legal opinion. Hence, while no provision
for taxation is considered necessary, a deferred
tax asset of Rs.30.53 crores has been
recognized by credit to Profit and Loss account
to comply with the provisions of Accounting
Standard 22 issued by Institute of Chartered
Accountants of India. The management is of
the opinion that it is in order in recognizing
the Deferred Tax Asset as above.
(b) The disputed Income Tax demand outstanding
as on 31.03.2005 amounts to Rs.60.97 crores
and is included under Item I of Schedule 12
(Contingent Liabilities). Of the above, Rs.60.79
crores has been paid or adjusted by the Income
Tax Department. No provision is considered
necessary in respect of the disputed liabilities
in view of favourable decisions by various
appellate authorities on similar issues.
4. ADDITIONAL DISCLOSURE IN TERMS OF RBI
GUIDELINES:(Rs. in Cr.)
2004-05 2003-04
a) Percentage of Shareholding of Government of India Nil Nil
b) Break-up of the item “Provisions and Contingencies”
included in the Profit and Loss account: Provision for
(i) Standard Assets 0.70 0.75
(ii) Non-Performing Assets 20.58 22.20
(iii) Income Tax – Current Nil 15.29
(iv) Income Tax – Deferred Tax Liability 0.34 0.53
(v) Income Tax – Deferred Tax Asset (-)32.38 (-)2.22
(vi) Leave Encashment 1.23 1.95
(vii) Depreciation on Investments 60.89 7.20
TOTAL 51.36 45.70
(c) Amount of Subordinated debt (Tier II Capital) 119.80 90.80
outstanding at year end
Issued during the year included above(*of issue size of Rs.30 cr.) 19.00* 50.00**(** of issue size of Rs.50 cr.)
(d) Business Ratios:
(i) CRAR (%) 11.32 13.79
(a) Capital Adequacy Ratio – Tier I Capital (%) 5.67 8.49
(b) Capital Adequacy Ratio – Tier II Capital (%) 5.65 5.30
(ii) Interest Income as a % to Average Working Funds 7.66 8.30
(iii) Non-Interest Income as a % to AverageWorking Funds 0.98 2.52
(iv) Operating Profit as % to Average Working Funds 1.40 2.64
(v) Net NPA to Net Advances (%) 4.98 5.40
(vi) Return on Average Assets (%) 0.08 1.19
(vii) Business (Deposits +Advances) per employee 2.96 2.76
(viii) Profit per employee (Rs. In lacs) 0.17 2.11
ANNUAL REPORT 2004-05 20
e) Maturity Pattern of Assets / Liabilities: (Rs. in Crore)
Residual Maturity
Days Days 29D- Months 6M-1Y Year Year Year Total1-14 15-28 3M 3-6 1-3 3-5 Over 5
i) Advances 171.42 37.60 239.58 213.66 339.83 940.08 176.47 199.07 2317.71(185.25) (49.59) (170.04) (203.61) (197.83) (935.83) (111.00) (185.56) (2038.71)
ii) Investments 0.00 0.00 2.40 1.80 5.86 110.40 206.19 854.21 1180.86(3.83) (2.06) (0.51) (7.94) (24.62) (153.48) (230.92) (914.81) (1338.17)
iii) Deposits 285.42 129.57 554.85 394.92 622.00 1373.71 87.05 48.41 3495.93(271.14) (145.15) (480.96) (357.53) (502.32) (1386.15) (100.91) (52.53) (3296.69)
iv) Borrowings 0.00 0.00 65.53 1.14 0.58 0.07 1.62 0.00 68.94(22.68) (0.00) (0.07) (0.17) (1.91) (4.45) (0.14) (0.80) (30.22)
v) Foreign Currency Assets 3.54 0.44 6.30 6.92 0.00 1.42 - - 18.62(5.60) (1.97) (3.04) (7.02) (0.28) (—) (17.91)
vi) Foreign Currency 28.13 0.33 20.87 2.31 4.65 9.09 - - 65.38Liabilities (6.17) (0.32) (0.85) (25.07) (6.06) (11.09) (49.56)
The coverage of actual data used for extracting the residual pattern of advances, investments, deposits and borrow-ings are 97.90%, 100%, 97.40% and 100% respectively. The data is as furnished by the bank. Previous year’sfigures are given in brackets.
(f) Movement in Non-Performing Assets (NPAs)–Advances:
(Rs. in Crore)
Gross NPAs 2004-2005 2003-2004
Opening Balance 216.83 211.13
Add: Additions during the year 44.19 30.87
Sub-Total 261.02 242.00
Less: Deductions during the year (73.57) (25.17)
Closing Balance 187.45 216.83
DICGC/ECGC claims settled, SundryDeposits and Interest Suspense 10.98 10.03
Provision Held 61.42 97.32
Net NPAs 115.05 109.48
(h) Movement in Provision for Non-Performinginvestments:
(Rs. in Crore)
2004-2005 2003-2004
Opening Balance 8.73 8.28
Add : Provision made during the year 2.86 0.45
Less: Write Off, write back of excessprovisions during the year 0.10 -
Closing Balance 11.49 8.73
(g) Movement in Provision for Non-PerformingAdvances:
[Rs. in Crore]
2004-2005 2003-2004
Opening Balance 97.32 77.30
Add: Provisions made during the year 20.58 22.20
Less: Write Off, write back 56.48 2.18of excess provisions
Closing Balance 61.42 97.32
(i) Provision for Depreciation on Investments:
[Rs. in Crore]
2004-2005 2003-2004
Opening Balance 24.78 18.21
Add:Provision made during the year 60.89* 7.20
Less:Write Off, write back of excessprovision during the year 43.68 0.63
Closing Balance 41.99 24.78
* includes Rs.35.76 crore on transfer of securities to ‘Held-to Maturity’category.
ANNUAL REPORT 2004-05 21
(k) Advances to Sensitive Sectors:
(Rs. in Crore)
2004-2005 2003-2004
a) Advances to Capital Market Sector 23.86 37.30
b) Advances to Real Estate Sector 12.87 9.27
c) Advances to Commodities Sector 124.78 87.00
(l) Financing of equities and investment in shares:
[Rs. in Crore]
2004-2005 2003-2004
Investments made in Equity Shares/Convertible Debentures 1.08 1.60Investments made in Units of EquityOriented Mutual Funds 22.11 35.11
Advances Against Shares 0.67 0.59
Total Finance extended for margin trading Nil Nil
(m) Restructuring of Loan Assets undertaken during the year: [Rs. in Crore]
(i) Other than under Corporate Debt Restructuring Scheme 2004-2005 2003-2004
Total amount of loan assets subjected to restructuring 15.39 0.46
The amount of standard assets subjected to restructuring 12.04 0.46
The amount of sub-std. assets subjected to restructuring 3.35 Nil
The amount of doubtful assets subjected to restructuring Nil Nil
(ii) Under Corporate Debt Restructuring Scheme 2004-2005 2003-2004
Total amount of loan assets subjected to restructuring 32.35 29.27
The amount of standard assets subjected to restructuring 11.77 29.27
The amount of sub-std. assets subjected to restructuring 20.58 Nil
The amount of doubtful assets subjected to restructuring Nil Nil
(j) (i) Issuer composition of Non SLR Investments: [Rs. in Crore]
No. Issuer Amount Extent of Extent of ‘below Extent of Extent ofPrivate securities investment ‘unrated’ ‘unlisted’
Placement grade’ securities (Below “A” securities securitiesGrade & Unrated Securities)
(1) (2) (3) (4) (5) (6) (7)
1 PSUs 6.11 5.95 2.95 0.95 3.65
2 FIs 30.75 8.82 6.83 6.83 7.82
3 Banks 7.63 7.45 3.75 3.75 3.75
4 Private Corporates 16.77 16.02 14.92 12.99 13.49
5 Subsidiaries/ — — — — —
Joint Ventures
6 Others @ 51.16 — — — —
7 Provision held 18.87
towards depreciation
TOTAL * 93.55
@ Others – includes investments in Mutual Funds and
RIDF.
* Break-up of Total: (Rs. In Cr.)
Shares 8.57
Debentures & Bonds 52.69
Subsidiaries & Joint Ventures -
Others 51.16
Provision held towards depreciation 18.87
Total 93.55
(ii) Non performing Non SLR Investments
[Rs. in Crore]
Particulars 2004-2005 2003-2004
Opening balance 9.69 9.69
Additions during the year since 1st April 5.59 Nil
Reductions during the above period 0.97 Nil
Closing balance 14.31 9.69
Total provisions held 11.49 8.73
ANNUAL REPORT 2004-05 22
(n) Country Exposure:
The net funded exposure of the bank in respect of Foreign exchange transactions with each country is within 2%of the total assets of the bank and hence no provision and disclosure is required to be made as per RBI circularDBOD.BP.BC.71/21.04.103/2002-03 dated 19.02.03.
(o) Securities sold under repos and purchased under reverse repos: (Rs. in Crore)
Minimum Maximum Daily average As on 31.03.05outstanding outstanding outstanding
during the year during the year during the year
Securities sold under repos 7.00 142.64 21.95 Nil(Nil) (Nil) (Nil) (Nil)
Securities purchased underreverse repos 10.00 120.00 11.92 Nil
(10.00) (50.00) (5.07) (Nil)
Previous year’s figures are given in brackets.
(p) The Bank did not undertake any interest rate swap or derivative trading during the year.
(q) Details of credit exposures where the bank has exceeded the prudential exposure during the year:
(Rs. in lacs)
S. Name of the Exposure Limit Period during Amount Board Position as onNo. Borrower Ceiling Sanctioned which limit outstanding Sanction 31.03.2005
(15% of exceeded during the DetailsCapital Funds) period limit
exceeded
1 LIC Housing Finance Ltd. 4343.85 5000.00 June 2004 to 5000.00 Sanctioned on 5000.00 March 2005 23.08.2003
2 Sri Saravana Spinning Mills 4343.85 5383.17 January 2005 to 4706.05 Sanctioned on 4706.05Pvt. Ltd March 2005 22.12.2004
5. Compliance with accounting standards issued by institute of chartered accountants of india (ICAI)
(a) Accounting Standard – 5 – Prior Period items:
There are no material prior period items requiring disclosure in terms of Accounting Standard 5.
(b) Accounting Standard 17 –Segment Reporting : Part A – Primary (Business) Segments:
2004-05 2003-04 2004-05 2003-04 2004-05 2003-04
Revenue 109.64 154.94 226.89 217.87 336.53 372.81Result (26.58) 26.78 107.37 82.93 80.79 109.71Unallocated Expenses 26.08 22.96Operating Profit 54.71 86.75Provisions & Contingencies 83.40 32.10Income Tax (32.03) 13.60Extraordinary Profit/Loss — —Net Profit 3.34 41.05OTHER INFORMATIONSegment Assets 1224.03 1373.35 2655.55 2317.27 3879.58 3690.62Unallocated Assets 173.80 130.73Total Assets 4053.38 3821.35Segment Liabilities 40.93 0.09 3720.09 3503.46 3761.02 3503.55Unallocated Liabilities 62.38 91.17Total Liabilities 3823.40 3594.72(excl. Capital & Reserves)
(Rs. in Crore)
Business SegmentsTreasury Other Banking Operations Total
ANNUAL REPORT 2004-05 23
Entire Investment portfolio has been considered as
Treasury Segment and accordingly its income and
assets are allocated to the segment. All other
income and allocable assets are considered as
pertaining to Other Banking Operations segment.
In respect of the funds lent to the Treasury segment,
the cost has been allocated on Transfer Pricing
Method.
Part B – Secondary (Geographic) Segments:
Since the bank is not having overseas operations, no
reporting is necessary under this segment.
(c) Accounting Standard 18 – Related Party
Disclosures:
The disclosure under AS-18 is furnished in Note
No.2 in respect of remuneration to Key
Management Personnel.
(d) Accounting Standard 20 – Earnings Per
Share (EPS):
EPS calculation in accordance with the AS-20
issued by the ICAI is as under:
2004-2005 2003-2004
Net profit after
Tax (Rs. in 000) 33444 410485
No. of shares 11508902 11508902
Earnings per share –
Basic & diluted (Rs.) 2.91 35.67
Note: There are no potential dilutive equity shares.
(e) Accounting Standard 22 – Accounting for
Taxes on Income:
The bank has accounted for Income Tax in
compliance with AS 22. Accordingly, Deferred
Tax Assets & Liabilities are recognized. The
major components of Deferred Tax are as
under:
Components Deferred DeferredTax Assets Tax Liability
Leave Encashment 1.74 -
(1.32)
Depreciation on Fixed - - 3.33Assets (-2.99)
Provision for Wage Arrears 2.95 -
(1.52)
Carried forward Loss 30.53
(Nil)
Net Deferred Tax Asset 31.89(Liability) (0.15)
Figures in brackets pertain to previous year.
(f) Accounting Standard 28 – Impairment of
Assets:
A substantial portion of the bank’s assets
comprise financial assets to which Accounting
Standard 28 is not applicable. In the opinion
of the bank, there is no impairment of other
assets to any material extent as at
31st March 2005 requiring recognition in termsof the said standard.
6. The Bank is in the process of working out the
additional liability towards salaries and wages arising
on account of the settlement reached in this regard
by the Indian Banks’ Association with the trade
unions representing employees. Pending calculationof actual liability, a provision of Rs.4.25 crore
(P.Y. Rs.4.25 cr) has been made during the year on
an estimated basis. The Bank holds a total provision
of Rs.8.50 crores as at year-end towards this liability,
which is considered by management as adequate.
7. The Bank earned a profit of Rs. 3.24 crores on sale
of securities under HTM category. As per theguidelines of the Reserve Bank of India, this profit
has to be transferred to Capital Reserve. However,
only a sum of Rs. 2.50 crores is transferred to the
Capital Reserve on account of the profits available
for appropriation.
8. Previous year’s figures have been regrouped /
reclassified wherever considered necessary toconform to the current year’s classification.
ANNUAL REPORT 2004-05 24
CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2005
(Rs. in thousands)
31.03.2005 31.03.2004
CASH FLOW FROM OPERATING ACTIVITIES:
Net Profit as per Profit & Loss Account 33,444 410,485
ADJUSTMENTS FOR:
Provisions & Contingencies 513,653 457,047
Depreciation 60,751 49,646
Loss on sale of assets (217) 347
Income Tax / T D S paid (169,820) (205,147)
Net cash flow before changes in Working Capital 437,811 712,378
CHANGES IN WORKING CAPITAL :
LIABILITIES : Increase/Decrease in
Deposits 2,001,060 5,253,175
Refinances 387,152 (338,858)
Other Liabilities (1,269,856) 422,611
1,118,356 5,336,928
ASSETS : Increase/Decrease in
Investments (1,400,967) 3,081,644
Advances 2,420,995 2,950,278
Leased-out Assets 0 0
Other Assets (161,000) (74,686)
(859,028) (5,957,236)
CASH FLOW FROM INVESTING ACTIVITIES :
Purchase of Fixed Assets (89,508) (64,998)
Sale of Fixed Assets 1,030 (88,478) 845 (64,153)
CASH FLOW FROM FINANCING ACTIVITIES:
Shares issued 0 0
Tier II Bonds 190,000 500,000
Dividends paid (57,537) 132,463 (56,415) 443,585
Cash flow for the year 741,124 471,502
Cash & Cash equivalents at the beginning of the year 2,801,253 2,329,751
Cash & Cash equivalents at the end of the year 3,542,377 2,801,253
Note: Cash, Balances with Other Banks, Balances with R B I, and Money at Call and Short Notice have been
considered as cash and cash equivalents.
ANNUAL REPORT 2004-05 25
AUDITORS’ CERTIFICATE
We have verified the Cash Flow Statement of The Lakshmi Vilas Bank Limited, Karur for the year ended March 31,2005.
This cash flow statement is the responsibility of the Management of the Bank in accordance with clause 32 of the
listing agreement entered into with the Stock Exchange and is in agreement with the Balance Sheet as at March 31,
2005 and the Profit & Loss Account for the year ended March 31, 2005 dealt with in our report dated June 27,2005 to
the members of The Lakshmi Vilas Bank Limited.
For ABARNA & ANANTHAN For M/s. S. VISWANATHANCHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS
S. ANANTHAN R. M. NARAYANANPartner PartnerMembership No:26379 Membership No: 25650
Place: KarurDate: 27th June 2005
AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE
To 27th June 2005The Members of KarurThe Lakshmi Vilas Bank LimitedKarur
We have examined the compliance of conditions ofCorporate Governance by The Lakshmi Vilas Bank Limitedfor the year ended on 31st March, 2005 as stipulated inclause 49 of the Listing Agreement of the said bank withstock Exchange.
The Compliance of conditions of Corporate Governanceis the responsibility of the Management. Our examinationwas limited to procedures and implementation thereof,adopted by the Bank for ensuring the compliance of theconditions of the Corporate Governance. It is neither anaudit nor an expression of opinion on the financialstatements of the Bank.
In our opinion and to the best of our information andaccording to the explanations given to us, we certify thatthe Bank has complied with the conditions of CorporateGovernance as stipulated in the abovementioned ListingAgreement.
As required by the Guidance Notes issued by the Instituteof Chartered Accountants of India, we have to state thatno investor grievance is pending for a period exceedingone month against the Bank as per the records maintainedby the Shareholders and Investor’s Grievance Committee.
We further state that such compliance is neither anassurance as to the future viability of the Bank nor theefficiency of effectiveness with which the managementhas conducted the affairs of the Bank.
For ABARNA & ANANTHAN For M/s. S. VISWANATHAN
CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS
S. ANANTHAN R. M. NARAYANAN
Partner PartnerMembership No:26379 Membership No: 25650
ANNUAL REPORT 2004-05 26
a) Industry Structure and Developments
Our Banking industry consists of Nationalized Banks,Old Private Sector Commercial Banks, New PrivateSector Commercial Banks, Co-operative Banks,Regional Rural Banks and Foreign Banks. Our Bankestablished in 1926 as Banking Company and hasbeen classified as Scheduled Commercial Bank bythe RBI.
Reserve Bank of India has prepared roadmap forbanking sector reforms in India and accordinglyunveiled the same by releasing the road map forpresence of foreign banks in India and guidelineson Ownership and Governance for private sectorbank which covers interalia the eligibility criteria ofminimum capital requirement on par with the entrycapital requirement for new private sector banks.In order to meet with this requirement, all banks inprivate sector should have a net worth of Rs.300.00crores at all times. The banks which are yet toachieve the required level of net worth will have tosubmit a time-bound programme for capitalaugmentation to RBI. Where the net worth declinesto a level below Rs.300.00 crores, it should berestored to Rs.300.00 crores within a reasonabletime.
During the year the overall stance of monetary policyfor 2004-05 was to provide a) adequate liquidity toensure credit flow to the commercial sector of theeconomy b) pursue an interest rate environmentconducive to maintain growth momentum and pricestability c) measures to stabilize inflationarypressures. While interest rates were stable, creditdelivery aspect received greater attention. CRR ofscheduled commercial banks was raised by one-halfof one percentage point in 2 stages – to 4.75%effective September 18, 2004 and to 5.0% effectiveOctober 2, 2004. The Mid – Term Review of AnnualPolicy raised repo rate by 25 basis points to 4.75%effective October 27, 2004. Minimum tenor of retaildomestic term deposits ( under Rs.15 lacs ) can bereduced from 15 days to 7 days at the discretion ofthe Bank. The Composite loan limit for SSI wasenhanced from Rs.50 lacs to Rs.1 crore.
Recent Collapse of one of the new private sectorbank had potentially affected the confidence ofInvestors / Depositors. However, Private Sectorscheduled commercial banks and Commercial Banksstrived hard to rebuild the confidence amonginvestor by value added services and advertisements& publicity.
ANNEXURE - A
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
b) Opportunities and Threats
Based on the economic factors as also performanceduring the fiscal 2004-2005 it is estimated that theaggregate deposits of the commercial banks wouldgrow around 15% over the previous fiscal. The non-food credit including non-SLR investments is alsoexpected to increase by around 19%.
The biggest challenge is the menace of NPAs whichreduces the profitability of the banks. If banks haveto cut their costs and improve performance, theyshould reduce their NPAs. On transition from‘regulatory adequacy’ to `market efficiency’, banksneed to use product development and differentiation,innovation, business process re-engineeringtechniques backed by technological up-gradation.
c) Business Segmentation
DEPOSITS
Amount in Percentage(crore of Rs.) to total
1) Demand 426.99 12.21 2) Savings 468.56 13.40 3) Term 2600.36 74.39
Total 3495.91 100.00
ADVANCES
Amount in Percentage
(crore of Rs.) to total
1. Manufacturing Sector
(SSI, Medium &
Large Ind) 1137.91 49.10
2. Trade & Service Sector 518.59 22.37
3. Agricultural sector 291.59 12.58
4. Housing Sector 186.82 8.06
5. Transport / NSFCS 15.52 0.67
6. Personal Segment 129.78 5.60
7. Others 37.50 1.62
Total 2317.71 100.00
d) Outlook
With real GDP growth at 6.9% in 2004-2005, India’smacro economic performance turned out to bestronger than anticipated and expected to registerhigher GDP growth rate over the next year withexpected good monsoon and increase in demandfor bank credit.
e) Risk and Concerns
Risk is internal part of the banking business andvarious types of risks the banks are exposed toa) Credit Risk b) Market Risk c) Operational Risk
ANNUAL REPORT 2004-05 27
banks should put in place a system for identification,measurement, monetary and management of risks,to mitigate their adverse impact on its financials.
f) Internal Controls
Banks has a separate Audit and Inspection
Department which subjects all the Branches
including International Division, Investment Cell,
Currency Chest, Service Branches and every
department of the Administrative Office to regular
inspection. Key branches including Investment Cell
at Mumbai are under concurrent audit which covers
almost 70.85% of the Bank’s business. All
computerized branches are subjected to a separate
security-audit regularly; Management audit of
controlling offices was done by external agency
during the year.
Audit Committee of the Board has been constituted
in line with RBI guidelines. To meet the requirement
of clause 49 of the Listing Agreement, the Audit
Committee reviews the adequacy of the audit and
compliance function, including the policies,
procedures, techniques.
g) Human Resources Development / Industrial
Relations
Knowledge becomes asset of every institution and
continous updation is essential to face the
competition in the industry and newer challenges,
the banks continues its focus in the area of training.
Against this backdrop, the Bank runs a full-fledged
Training College with skilled and experienced faculty
to impart job-oriented training at frequent intervals
to its staff at various levels. Wherever needed
specialised courses were conducted at the college
with external faculty. Our officers were also deputed
to courses at reputed training colleges and
programmes.
The Industrial relations remained cordial throughout
the year. The number of permanent employees on
the rolls of the Bank as on March 31 2005 was 1928
including part-time employees.
h) Discussion on Financial parameters with
respect to operational performance
The Bank continued its emphasis on “Operating Profit
Approach”, The Bank could record moderate to good
performance in terms of various key financial
parameters.
Deposits increased by 6.07%
Advances increased by 13.69 %
Net Interest income increased by 27.83 %
Net-worth increased by 1.48 %
Number of branches increased to 225 from 224
Number of staff: 1928
The composition of the Board of Directors, headed by
Executive Chairman is governed by the provisions of the
Companies Act,1956, Banking Regulation Act, 1949 and
listing agreement entered with NSE. The Board has a
strength of 8 Directors as on 31.03.2005. The Board
consists of eminent persons with considerable professional
expertise and experience in Banking, Law, Finance,
Accountancy, Small Scale Industry, Agriculture and
Business including Exports. Details of name of Chairman
and Directors of the Board, number of meetings held
and attendance during the year are provided in
Annexure-C. All Directors of the Bank attended the last
Annual General Meeting held on 29.07.2004.
The Bank has not entered into any materially significant
transaction which could have a potential conflict of interest
ANNEXURE – B
BOARD OF DIRECTORS AND COMMITTEES
with its promoters, directors, management or relatives
etc., except the transactions entered into in the normal
course of banking business.
Committees of Directors
The Board has constituted Committees of Directors to
deal with matters, which need special focus and timely
monitoring of the activities falling within the terms of
reference of the Committees. The Board Committees
are as follow:
Audit Committee
Audit Committee of the Board is chaired by Shri. D.L.
Suresh Babu, Independent Director who is a Chartered
Accountant by profession. Audit Committee provides
direction and oversees the operation of total audit function
ANNUAL REPORT 2004-05 28
Non-Performing Assets (NPA) Review Committee
The Committee reviews once in every quarter, the status
of NPA and Recovery. It emphasizes steps to improve
the quality of the assets as per RBI norms by continuously
following up with irregular accounts and triggering
provisions of SERFAESI Act against the defaulters or
proceeding legally against the defaulters in Debt Recovery
Tribunal and also enter into compromise settlement.
Integrated Risk Management Committee
The Integrated Risk Management Committee constituted
as per RBI guidelines, formulates Bank’s credit and
Market risk policies and reviews the Assets and Liabilities
of the Bank based on periodical structural liquidity and
dynamic liquidity statements on outflows and inflows and
also analyses the interest rate sensitivity of assets and
liabilities.
Remuneration Committee
No committee has been formed as the remuneration of
whole time Director and sitting fees payable to other
directors is decided only by the Board of Directors. The
revised remuneration of Ex-Chairman & CEO was
approved by RBI on the recommendations of the Board,
details of which is given in the Schedule 17 of the Annual
accounts and other directors are paid only sitting fees
for Board/ Committee meetings attended by them.
Fraud Monitoring Committee
Pursuant to the Directions of the Reserve Bank of India,
the Bank has constituted a Fraud Monitoring Committee,
exclusively dedicated to the monitoring and following up
of cases of fraud involving amounts of Rs.1 crore and
more. The objective of this Committee for effective
detection of frauds and ensuring of prompt reporting
thereof to regulatory and enforcement agencies.
Customer Service Committee of the Board
Pursuant to the Directions of the Reserve Bank of India,
the Bank has constituted a Customer Service Committee
exclusively dedicated to bring about improvement in the
quality of customer service provided by the bank.
Disclosure
No strictures are passed on the bank by any regulatory
authority for non-compliance of any laws except:
1 The Bank has received a letter from SEBI vide letter
no CFD/DCR/RC/TO/23040/04 dated 16.11.2004
in the Bank as per RBI guidelines. Details of name of
members and chairman, meetings and attendance during
the year under review, are provided in Annexure-C. The
terms of reference of Audit are in accordance with
Provisions of Companies Act, 1956, Banking Regulation
Act, 1949 and clause 49 of listing agreement inter alia
includes the following :
• Overseeing the Bank’s financial reporting process
and ensuring correct, adequate and credible
disclosure of financial information.
• Recommending appointment and removal of
external auditors and fixing of their fees.
• Reviewing with management the annual financial
statements before submission to the Board with
special emphasis on accounting policies and
practices, compliance with accounting standards and
other legal requirements concerning financial
statements and
• Reviewing the adequacy of the Audit and Compliance
function, including their policies, procedures,
techniques and other regulatory requirements.
Share Transfer and Investors’ Grievances
committee
The Share Transfer and Investors’ Grievances Committee
approves and monitors share transfers, transmission,
split, consolidation, issue of duplicate shares, physical
shares on remat requests, fixing book closure/ record
date etc. Besides Board, Committee monitors the
redressal of complaints of investors like Complaints on
Share transfer, non-receipt of dividend declared, non-
receipt of annual report & other related matters. The
Committee also reviews the compliance of provisions and
requirements of Reserve Bank of India, SEBI, Stock
Exchanges, Registrar of Companies, Depositories, and
other statutory bodies.
During the year the Bank received 5 complaints from
shareholders, which have been resolved. Details of name
of members, Chairman, Compliance officer, meetings and
attendance during the year are provided in Annexure-C.
Infrastructure Development committee
The committee approves purchase and leasing of
premises for the use of the Bank’s branches and for
employees’ residences and the purchase of computer
hardware, software, peripherals and accessories etc.
ANNUAL REPORT 2004-05 29
alleging violation of Regulations 6 and 8 of the SEBI
(Substantial Acquisition of Shares and Takeovers)
Regulations 1997 calling for consent order to pay
penalty of Rs. 2,75,000 for non filing of returns under
Reg 6 (2), 6(4) and 8 (3) if the bank is willing to
make request for consent order.
However, a reply has been given by the Bank on
12.01.2005 justifying that the same are not
applicable to the Bank and requesting for dropping
of further proceedings. Decision of SEBI is awaited.
2. Reserve Bank of India DBS has pointed out in letter
dated 14th Feb 2005 received on 22nd Feb 2005
certain violations in the utilisation of IFR for making
provision towards depreciation on investments while
ANNEXURE – C
Composition of the Board of Directors together with the attendance at meetings of the Board, its Committees and AnnualGeneral Meeting and directorship held
Representation Category as Board Audit Share Integrated Risk NPA Infrastructure Gratuity Pension Provident Annual No. ofas per per Listing (27 Committee Transfer & Management Review Development Committee Trust Trust (3 General Other
Name of the Director Banking Agreement meetings) (8 Investors’ Committee Committee Committee (4 meetings) (2 meetings) Meeting Director-Regulation Act meetings) Grievances (4 meetings) (4 meetings) ( 2 meetings) meetings) ships held
Committee(3 meetings)
Mr. A.Krishnamoorthy, Majority- Executive- 24 NA NA 4 4 2 4 2 3 YES NIL
Ex - Chairman - Board Banking Director/Non
Chief Executive Officer Independent
Mr.C.Krishnakumar Minority- Promoter/ 27 8 3 4 4 2 4 2 3 YES NIL
Trade Non-
executive/
Non-
Independent
Mr.N. Malayalaramamirtham Minority Promoter/ 24 7 3 4 4 1 4 2 NA YES NIL
(Chairman – Share Transfer -Trade Non-
& Investors’ Grievances executive/
Committee) Non -
Independent
Mr.S.G. Prabhakharan Majority Independent/ 26 NA 3 3 4 2 NA NA 3 YES 7
-Law Non-
executive
Mr.D.L. Suresh Babu Majority- Independent/ 26 8 NA 4 4 NA NA NA NA YES 1
(Chairman - Audit Chartered Non
Committee) Accountancy -executive
Mr.K.B. Krishnan Majority-SSI Independent/ 26 8 NA NA NA NA 4 NA NA YES 2
Non-
executive
Mr.M.P. Shyam Minority Independent/ 18 4 2 2 4 2 NA 2 NA YES 4
Business Non-
executive
Mr.V.N. Krishnamurthy Majority Independent/ 25 NA 3 NA NA NA NA NA NA YES NIL
SSI Non-
executive
Mr.R.Dhandapani Majority- Independent/ 27 NA NA NA NA NA NA NA NA YES NIL
Agri Non-executive
finalising unaudited limited review financial results
of the Bank for quarters ended June and September
2004 and issued notice proposing penalty.
Bank has submitted its response/clarifications to RBI
both during personal hearing and in detailed reply.
While finalising the financial results for the 9-month
period ended Dec 2004, Bank had re-credited IFR
amount withdrawn earlier and is holding IFR of
7.65% on AFS portfolio as against requirement of
5% to be built up before March 2006. Suitable
disclosure is also made by the Bank in the
accompanying notes to publication of financial
results under clause 41 of the listing agreement.
ANNUAL REPORT 2004-05 30
ATTENDANCE AT AUDIT COMMITTEE MEETINGS
Meeting details
Names of the Category of Held during Whether
Committee Members director the tenure of Attended % of attended last
director/ invitee total AGM (Y/N)
D.L.Suresh Babu Chairman – NED / 8 8 100% Y
Independent
N.Malayalaramamirtham NED/ Non- 8 7 87.50% Y
Independent/Promoter
C. Krishnakumar NED/ Non- 8 8 100% Y
Independent/Promoter
K.B. Krishnan NED / 8 8 100% Y
Independent
M.P. Shyam NED / 8 4 50% Y
Independent
INFORMATION ABOUT SHARE TRANSFER WORK TO A DELEGATED AUTHORITY
Description of delegated Full Address of delegated Telephone Fax E-Mails ID
authority authority Numbers Numbers
Name and designation of S.Venkateswaran, Company Secretary/
Compliance Officer of Compliance Officer, The Lakshmi
the Company Vilas Bank Limited Regd. & Administrative04324 220068 [email protected]
Office, Salem Road,220051 – 60 & 69
Kathaparai, Karur – 639 006
Name of Board Committee Share Transfer & Investors’
and Chairman’s name Grievances Committee
Mr.N.Malayalaramamirtham,
Director, The Lakshmi Vilas Bank04324 220068 &
Limited, Regd. & Administrative Office,220051-60 69
Salem Road, Kathaparai,
Karur – 639 006
The Registrar and Share M/s.Integrated Enterprises (India) Ltd 044
Transfer Agents II Floor, “Kences Towers” No.1, 28140801 28142479
Ramakrishna St., 28140802 28143378 [email protected]
North Usman Road, 28140803
T.Nagar, Chennai – 600 017
ANNUAL REPORT 2004-05 31
Means of Communication
The Bank has published its financial - quarterly and annual
results in The New Indian Express (English) andDinamani (Vernacular - all editions) The results are
displayed on the Bank’s website at www.lvbank.com
Management discussion and analysis forms part of the
Annual Report which is posted to the shareholders of the
Bank.
Financial Calendar 2005-2006 (tentative): 78th
Annual General Meeting
Date & Time : 29.09.2005, 10.30 A.MVenue : Registered Office, Salem Road,
Kathaparai, Karur – 639006,
Tamilnadu.
Informations of last three Annual General Meetings
held
75th AGM - 14/08/2002 - 10.30 A.M. - A.O. Karur.
76th AGM - 07/08/2003 - 10.30 A.M. - A.O. Karur.
77th AGM - 29/07/2004 - 10.30 A.M. - A.O. Karur.
Annual General Meeting (Next Year) August, 2006
Board Meetings
Results for the quarter ending June 2005 – 16th July
2005
Results for the quarter ending September 2005 – Lastweek of October 2005
Results for the quarter ending December 2005 – Last
week of January 2006
Results for the quarter ending March 2006 – Last week
of June 2006
Unclaimed Dividend:
Information in respect of unclaimed dividend and last
date for making claim is given below:
Financial Date of Amount as on Last date
Year Declaration 31.03.2005 for claim
in Rs.
1997-98 28.08.1998 5,79,538 27.08.2005
1998-99 28.07.1999 6,12,541 27.07.2006
1999-00 29.08.2000 9,94,491 28.08.2007
2000-01 27.07.2001 11,28,870 26.07.2008
2001-02 14.08.2002 12,27,088 13.08.2009
2002-03 07.08.2003 15,41,449 06.08.2010
2003-04 29.07.2004 19,56,075 28.07.2011
ANNEXURE-D
GENERAL SHAREHOLDERS’ INFORMATION
Compliance with clause 32 of the Listing Agreement
Name and address of the Stock Exchange where equityshares of Lakshmi Vilas Bank Limited is listed:
The National Stock Exchange of India LimitedExchange Plaza, 5th floor,Plot No.C/1,G Block, Bandra – Kurla Complex ,Bandra ( E ) , Mumbai – 400 051.
Bank confirms that the Annual Listing Fee has been paidto National Stock Exchange.
Dematerialization
The fully paid Equity Shares (ISIN NO:
INE694C01018) & partly paid Equity shares (ISINNo: IN9694C01016) of the Bank are admitted underdemat mode with both the depositories of the countryi.e., National Securities Depository Limited and CentralDepository Securities (India) Limited.
Stock Market Data
Month NSE Listed on 21.06.2000
High Low
April 2004 161.35 116.50
May 2004 169.70 105.00
June 2004 128.70 99.00
July 2004 119.50 100.10
August 2004 109.35 93.70
September 2004 113.95 98.40
October 2004 113.95 97.00
November 2004 118.00 99.15
December 2004 228.70 108.95
January 2005 238.60 165.05
February 2005 184.00 176.00
March 2005 197.40 155.00
Bank has 39346 shareholders as on 31.03.2005 of this14618 folios representing 67,64,847 (58.78%) sharesare in Demat Form.
Distribution of Shareholding in break up as on 31.03.2005is given below.
CATEGORY SHAREHOLDERS
No. of shares Number % on total
Upto 500 35,900 91.40
501 1000 2,160 5.50
1001 2000 789 2.01
2001 3000 218 0.50
3001 4000 88 0.20
4001 5000 45 0.11
5001 10000 81 0.21
10001 and above 65 0.11
Total 39,346 100.00
ANNUAL REPORT 2004-05 32
Nomination Facility
Shareholders may avail of the Nomination Facility underSection 109A of the Companies Act, 1956.
Bank Account Details
In order to avoid fraudulent encashment of dividendwarrants, the members are requested to write their BankAccount details to the Office of our Registrar and ShareTransfer Agent.
Shares held in Electronic form
All instructions regarding bank account details, which theshareholders wish to be incorporated in their dividendwarrant will have to be submitted to their depositoryparticipants.
Instructions already given by them in respect of sharesheld in physical form will not be automatically applicableto the dividend paid on shares held in electronic formand the Bank or STA will not entertain any request fordeletion / change of Bank details already printed ondividend warrants as per information received from boththe depositories.
All instructions regarding change of address, nomination,power of attorney etc., shall be given directly to theirDepository participants and the bank or STA will notentertain any such requests directly. Shareholders havingthe holdings partly in demat form and partly in physicalform, should follow the steps narrated above separately.
Share Transfer Process
Bank ensures physical shares are processed by theRegistrar and Share Transfer Agent - IntegratedEnterprises (India) Limited and approved by ShareTransfer Grievances Committee and the certificates aredispatched to the transferees within a maximum periodof 4 weeks from the date of receipt of the transferdocuments by Integrated Enterprises (India) Limited,provided if the share documents are valid in all respects.
Share transfers, dividend payments, demat requests andall other investor related activities are attended to andprocessed at the office of our Registrar and Share TransferAgent.
Shareholders’ Correspondence should be addressedto:
M/s Integrated Enterprises (India) LimitedII floor , “Kences Towers” No.1
Ramakrishna StreetNorth Usman Road, T.Nagar, Chennai – 600 017
Ph: 044-28140801/2/3 Fax: 28142479/28143378Email: [email protected]
Non - Mandatory Requirements
The Bank at present has not adopted the Non- Mandatoryrequirement in regard to Remuneration Committee,sending of half yearly performance to the Share Holdersto their Residence.
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEAS PER SCHEDULE VI, PART IV OF THE COMPANIES ACT, 1956 (Rs.in 000s)
A REGISTRATION DETAILS
Registration 01377
State 18
Balance Sheet Date 31.03.2005
B CAPITAL RAISED DURING THE YEAR
Public Issue Nil
Bonus Issue Nil
Rights Issue Nil
Private Placement Nil
C POSITION OF MOBILISATION
AND DEPLOYMENT OF FUNDS
Total Liabilities 40,53,38,18
Total Assets 40,53,38,18
SOURCES OF FUNDS
Paid-up Capital 11,50,89
Reserves and Surplus 2,18,47,83
Secured Loans Nil
Unsecured Loans 68,94,37
APPLICATION OF FUNDS
Net Fixed Assets 34,10,79
Investment 11,80,86,14
Net Current Assets 2,62,17,53
Miscellaneous Expenditure Nil
Accumulated Losses Nil
D. PERFORMANCE OF THE COMPANY
Total Income 3,36,52,42
Total Expenditure 3,33,17,98
Profit Before Tax (28,69,24)
Profit After Tax 3,34,44
Earning per Share (Rs) 2.91
Dividend Rate Nil
GENERIC NAMES OF THREE PRINCIPAL PRODUCTS
OF THE COMPANY(AS PER MONETARY TERMS)
Items Code N.A
Product Description Banking Company
ANNUAL REPORT 2004-05 33
STATEMENT OF PROGRESS (AMOUNT IN LAKHS OF RUPEES)
Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Paid-up Capital 1135.41 1148.77 1150.86 1150.86 1150.88 1150.88 1150.88 1150.89 1150.89 1150.89
Reserve Fund & 5112.15 6600.36 8361.20 8972.08 11023.06 13126.82 15290.57 18057.72 21513.39 21847.83
Other Reserves
Deposits 91313.19 113250.99 141892.52 159100.77 196340.65 227764.40 247692.23 277050.16 329581.91 349592.51
Advances 49281.74 60838.49 75790.92 90943.14 115004.68 148023.33 156525.19 176369.82 203870.40 231771.14
Investments 39375.78 46987.77 49406.11 59208.59 76756.97 78203.92 90420.57 103657.52 133816.81 118086.14
Net Profit 1000.08 1870.29 2159.00 1432.83 2635.61 2674.48 3022.11 3416.33 4104.85 334.44
Number of Branches 191 200 200 204 205 209 211 215 224 225
Staff Position 1913 2002 1996 1957 1930 1936 1933 1983 1946 1928
Earning Per Share 8.81 16.28 18.76 12.45 22.90 23.24 26.25 29.68 35.67 2.91
Book Value 55.02 67.46 82.65 87.96 105.78 124.06 142.86 166.90 196.93 199.83
Market Price 97.77 63.13 48.35 36.10 38.12 44.42 46.17 65.98 98.72 138.20
Dividend Per 3.00 3.50 3.70 3.70 4.50 4.50 5.00 5.00 5.00 Nil
Share (Rs.)
ANNUAL REPORT 2004-05 34
KanjampattiKaraikudiJawahar Bazaar KarurKarur West “Vengamedu “Kathaparai “KattuputhurKattugudalur (S.O)KovilpattiKrishnagiriKumbakonamKurumbapattiLakkapuramLalgudiThambu Chetty St. Chennai
Adyar “Anna Nagar “Cathedral Road “G.N. Street, “Kodambakkam “Mount Road “Mylapore “Nungambakkam “Purasawalkam “Royapuram “Selaiyur “Triplicane “Valasarawalkam “West Tambaram “MadukkurPalace Road MaduraiThallakulam “MahadhanapuramManameduMannargudiMarandahalliMathurMayiladuthuraiMelurMettupalayamMettur DamMoolangudiMuthugapattiMuthupetMuthurNagapattinamNagercoilNamakkalNathakadaiyurNerinjipettaiNeyveliOddanchatramOlapalayamPalaniPallipalayamPanrutiPapanadPapanasam
MAHARASHTRA
NagpurAndheri MumbaiBorivali “Fort “Matunga “Vashi “PuneMADHYA PRADESH
IndoreNEW DELHI
JanpathKarol BaghPONDICHERRY
AmbagarathurKaraikalPondicherryTAMILNADU
AlathurAmbilikkaiAmburAnbil (S.O)ArakandanallurArantangiAriyalurArniAtturAvalpoonduraiBalasamudramBhuvanagiriChinnadharapuramChittodeOppanakara St.
CoimbatorePersonal Banking “Ganapathy “Gandhipuram “Kovaipudur “Ramanathapuram “R.S. Puram “Uppilipalayam “CuddaloreCumbumDharmapuriDindigulErodeGobichettipalayamGopalapattiHosurIdayakottaiIyyampalayamJalakandapuramKadambuliyur (S.O)KallakurichiKancheepuramKandiliKangayam
ANDHRA PRADESH
AdoniChittoorEluruGajuwakaGopalapatnamGunturKoti HyderabadHubsiguda “Kothapeta “Kukatpally “Malkajgiri “Secunderabad “KakinadaNandyalNelloreOngoleProdatturRajahmundrySuryapetTanukuTirupatiVijayawadaVijayawada IIVisakapatnamWarrangal
GUJARAT
AhmedabadAnandGandhinagarGandhidhamJamnagarRajkotSuratVadadora
KARNATAKA
Gandhinagar BangaloreCantonment “Citymarket “Jayanagar “Jalahalli “Ulsoor “BellaryChitradurgaDavangereHospetHubliKoramangalaMandyaMysoreRaichurRanebennurShimoga
KERALACalicutCochinPalakkadThrissurTrivandrum
PattukkottaiPennagaramPeravuraniPeriakulamPodakudyPollachiPugalurC. Pudupatti (S.O)R. PudupattiRajapalayamRajendramRasipuramBazaar Street SalemC.K. Street “Gugai “Shevapet “Swarnapuri “SankarapuramSankariSatturSeevalaperi (S.O)SendarapattiSivakasiSundarapandiyamSuriyampalayamTanjoreTenkasiTheniThiruvaiyaruThittagudiThottiyamTindivanamTiruchengodeTirukoilurTirunelveliTirupurTiruvarurBig Bazaar St. TrichySrirangam “Thillainagar “ThirukadaiyurThirukattupalliTiruthuraipoondiTiruvannamalaiTuraiyurTuticorinUdumalpetUlipuramUnjalurVadugapalayamVellakoilVelliyanaiVelloreVelur (Namakkal)VettavalamVilangudiVillupuramVirudhunagarVridhachalamYethapurWEST BENGAL
Kolkatta
BRANCH NETWORK
ANNUAL REPORT 2004-05 35
CHENNAI
189, Ist Floor, Aarthi Chambers, Anna Salai,
Chennai - 600 006 Tamilnadu
Off Ph : 52085253 (AGM) 28547198 (CM)
STD : 044 Telex : 041- 5016 Fax : 28547529
Mobile : 98400-99118
Email : [email protected]
MUMBAI
Sterling Centre, 2nd Floor, Andheri-Kurla Road, Chakala,
Andheri (East), Mumbai - 400 093 Maharashtra
Off Ph : 28270236, 28270237, 28270235 (DGM)
STD : 022 Mobile: 98211-32824
Telex : 118-5322 Fax : 022-28270234
Tel. ad : ELVEEBEE
Email : [email protected]
SUB DIVISIONAL OFFICE, AHMEDABAD
1st Floor, Blue Star Complex, P.B. No. 34,
Near High Court, Railway Crossing, Navrangpura,
Ahmedabad - 380 014 Gujarat
Off Ph : 26564263, 26563686 STD : 079
Telex : 0121-6114LVBA Tel. Fax : 26563686
Tel. ad : LAXMIBANK
HYDERABAD
Flat No. 2A, Samrat Complex,
IInd Floor, Saifabad,
Hyderabad - 500 004 Andhra Pradesh
Off Ph : 23241904(AGM), 23212024, 23211782
STD : 040 Mobile: 98480 - 23865
Tel. Fax : 040-23212024 Tel. ad : HILLELVEBE
Email : [email protected]
BANGALORE
568, 38th Cross, 11th Main, 1st Floor,
P.B. No. 4129
5th Block, Jayanagar, Bangalore - 560 041
Karnataka
Off Ph : 26345249 (AGM) 26633902 STD : 080
Mobile : 98456-60683
Tel. Fax : 080-26345249
Email : [email protected]
COIMBATORE
LVB Platinum Jubilee Building,
68, Oppanakara Street,
IInd Floor, Coimbatore - 641 001 Tamil Nadu
Off Ph : 2304997, 2304843, 2383150 (AGM)
STD : 0422 Mobile: 98424-36776
Tel. Fax : 0422-2304843
Email : [email protected]
KARUR
48/54, South Madavilagam Street,
Karur - 639 001 Tamil Nadu
Off Ph : 262531 (DM), 261684 STD : 04324
Mobile : 98424-56619
Tel. Fax : 04324-262531
Email : [email protected]
MADURAI
97, Palace Road, P.B. No. 177, II Floor,
Madurai - 625 001 Tamil Nadu
Off Ph : 2336572, 2338213 (DM) STD : 0452
Mobile : 98421 - 65133
Telex : 0445-220 Tel. Fax : 0452-2338213
Email : [email protected]
SALEM
49-A, I Floor, Advaitha Aashram Road,
Salem - 636 004. Tamil Nadu
Off Ph : 2336753, 2336751, 2336752 (DM)
STD : 0427 Mobile: 98424 - 63400
Tel. Fax : 0427-2336751
Email : [email protected]
INTERNATIONAL DIVISION/DOMESTIC TREASURY
25-31, Aban House, 4th Floor, Sri Saibaba Marg. Kalagodha, Fort Mumbai - 400 023, MaharashtraOff Ph : 22822811, 22883261,22839928 (DGM) STD : 022 Fax : 22822812
Mobile : 98204 - 52642 (DGM-ID); 98202-84023(AGM-INV.CELL)Email: [email protected]; [email protected]
DIVISIONAL / SUB DIVISIONAL OFFICES :
ANNUAL REPORT 2004-05 36
USA & CANADA
1. HSBC BANK USA, NEW YORK
2. AMERICAN EXPRESS BANK, NEW YORK
3. TORONTO DOMINION BANK, TORONTO
EUROPE
4. HSBC BANK PLC, LONDON
5. CLYDESDALE BANK, GLASGOW
6. CITI BANK, FRANKFURT
7. DRESDNER BANK, FRANKFURT
8. DEUTSCHE BANK, ESCHBORN
9. HYPO VERIENS BANK, HAMBURG
10. ABN AMRO BANK, AMSTERDAM
11. INTESABCI SPA, MILAN
12. BANCA NAZIONALE DEL LAVORO, ROME
13. UBS AG, ZURICH
14. NATEXIS BANQUE, POPULAIRES PARIS
15. FORTIS BANK, BRUSSELS
16. DEN DANSKE BANK, COPENHAGEN
17. ZURCHER KANTONAL BANK, SWITZERLAND
LIST OF OVERSEAS CORRESPONDENT / AGENCY BANKS
ASIA PACIFIC
18. NATIONAL AUSTRALIA BANK, MELBOURNE
19. COMMONWEALTH BANK OF AUSTRALIA, SYDNEY
20. STANDARD CHARTERED BANK, TOKYO
21. HONGKONG AND SHANGHAI BANKING
CORPORATION:
HONGKONG, SINGAPORE, KUALA LUMPUR &
SYDNEY
GULF
22. SAUDI BRITISH BANK, RIYADH
23. HABIB BANK AG ZURICH, DUBAI
24. SAUDI HOLLANDI BANK, DUBAI.