Axis Bank

The Board of Directors has pleasure in presenting the Fourteenth Annual
 Report of your Bank together with the Audited Statement of Accounts,
 Auditors Report and the report on business and operations of the Bank
 for the financial year ended 31st March 2008.
 
 The financial year 2007-08 will be remembered as a year of
 transformation in the history of the Bank, when the name of the Bank
 changed to Axis Bank from UTI Bank. The conviction that it was
 worthwhile to invest in building a brand that would solely be our own,
 helped to create a distinct identity. The name Axis Bank connotes
 solidity and transcends geographical boundaries as we seek to become a
 multinational bank. The Bank was successful in establishing a new
 identity in the market in a short span of time.
 
 FINANCIAL PERFORMANCE
 
 The Bank once again met with considerable success over the past year
 and achieved all its key objectives. This encouraging performance not
 only underscored the sustainability of the Banks high tempo of growth,
 but also helped to move closer to its objective of being one of the
 more customer-focused banks in the country. This is reflected in the
 robust growth in both business and revenue during 2007-08 and in
 various financial parameters. The financial highlights for the year
 under review are presented below:
 
                                                        (Rs. in crores)
 PARTICULARS                   2007-08      2006-07         Growth
 
 Deposits                    87,626.22    58,785.60         49.06%
 Out of which
 Savings Bank Deposits       19,982.41    12,125.88         64.79%
 Current Account Deposits    20,044.58    11,304.31         77.32%
 Advances                    59,661.14    36,876.48         61.79%
 Out of which
 Retail Assets               13,591.68     8,927.54         52.24%
 Non-retail Advances         46,069.46    27,948.94         64.83%
 Total Assets/Liabilities  1,09,577.85    73,257.22         49.58%
 Net Interest Income          2,585.35     1,468.33         76.07%
 Other Income                 1,795.49     1,010.11         77.75%
 Out of which
 Trading Profit                 427.74       185.72        130.31%
 Fee & other income           1,367.75       824.39         65.91%
 Operating Expenses excl.
 depreciation                 1,996.81     1,102.73         81.08%
 Profit before depreciation, 
 provisions and tax           2,384.03     1,375.71         73.29%
 Depreciation                   158.11       111.86         41.35%
 Provision for Tax              575.25       337.21         70.59%
 Other Provisions & Write offs  579.64       267.61        116.60%
 Net Profit                   1,071.03       659.03         62.52%
 Appropriations:
 Transfer to Statutory Reserve  267.76       164.76         62.52%
 Transfer to Capital Reserve     26.84        15.64         71.61%
 Proposed Dividend              251.64       148.79         69.12%
 Surplus carried over to
 Balance Sheet                  524.79       329.84         59.10%
 
 KEY PERFORMANCE INDICATORS                    2007-08      200607
 
 Interest Income as a percentage 
 of working funds*                               8.08%       7.42%
 
 Non-Interest Income as a percentage 
 of working funds                                2.07%       1.68%
 
 Net Interest Margin                             3.47%       2.74%
 
 Return on Average Net Worth                    16.09%      21.84%
 
 Operating Profit as a percentage 
 of working funds                                2.57%       2.10%
 
 Return on Average Assets                        1.24%       1.10%
 
 Profit per employee**                        Rs. 8.39 lacs  7.59 lacs
 
 Business (Deposits less inter bank 
 deposits + Advances) per employee**          Rs.11.17crores 10.24 crores
 
 Net Non performing assets as a 
 percentage of net customer assets***             0.36%       0.61%
 
 - Working funds represent average total assets.
 
 - Productivity ratios are based on average number of employees.
 
 - Customer Assets include advances, credit substitutes and unamortised
 cost of assets leased out.
 
 Previous year figures have been regrouped wherever necessary.
 
 During 2007-08, the Banks business and earnings continued to show high
 growth, indicative of a clear strategic focus, the communication of
 corporate priorities to branches across the country, and finally the
 execution of these goals through intensive efforts. The Bank reported a
 net profit of Rs. 1,071.03 crores during the year ended 31st March
 2008, up 62.52%, from Rs.  659.03 crores in the previous year. Diluted
 earnings per share (EPS) were Rs. 31.31 per share, up 37.38% from Rs.
 22.79 per share a year earlier. Return on Equity (ROE) was 16.09%
 compared to 21.84% a year earlier. The decline in ROE was primarily on
 account of the raising of fresh equity capital during the financial
 year. Return on Average Assets was 1.24%, compared to 1.10% in the
 previous year.
 
 In 2007-08, the Bank achieved a total income of Rs. 8,800.80 crores, up
 60.84% from 2006-07. During this period, operating revenue was Rs.
 4,380.84 crores, up 76.76% from the previous year, while operating
 profit was up by 76.12% to reach Rs. 2,225.92 crores. The strong growth
 in income was largely driven by a strong increase in both net interest
 income by 76.07% to Rs. 2,585.35 crores, and fee and other income by
 77.75% to Rs. 1,795.49 crores. The strong income growth reflects the
 solid business growth across all banking segments and the successful
 execution of growth initiatives. The strong growth in incomes was
 partly offset by an increase in operating expenses, including
 depreciation, by 77.42% to Rs. 2,154.92 crores. The increase in
 operating expenses primarily reflects the higher costs incurred as a
 result of increased business levels that include additional sales and
 service personnel and higher variable compensation. Additional expenses
 incurred to support the growth initiatives of the Bank (including
 network expansion as well as the re-branding exercise) also contributed
 to the increase in operating expenses.
 
 In 2007-08, net interest income increased by 76.07% to Rs. 2,585.35
 crores from Rs. 1,468.33 crores in the previous year. This increase was
 largely due to a strong asset side growth, as also the robust growth in
 low-cost demand deposits (current and savings bank deposits). On a
 daily average basis, total earning assets in 2007-08 increased by
 39.18% to Rs. 74,589 crores from Rs. 53,591 crores a year ago. This was
 partially offset by a rise in funding costs due to the hardening of
 rates on term deposits during the year. However, the steady growth in
 demand deposits, which on a daily average basis increased by 57% to Rs.
 25,515 crores from Rs. 16,252 crores a year ago, helped contain the
 funding costs. Nevertheless, the average cost of funds in 2007-08
 increased to 6.02% from 5.60% a year earlier. In 2007-08, the cost of
 deposits increased to 5.91% from 5.38% a year earlier, primarily the
 result of an increase in the cost of term deposits by 146 basis points.
 
 During the year, the yield on earning assets increased by 106 basis
 points to 9.36% from 8.30% a year earlier, reflecting the impact of
 changes in the product-mix in advances, together with an improvement in
 the yield on investments. The Bank was able to absorb the downward
 pressure on the yield on advances in the last quarter of the financial
 year, and the consequent compression of margins, through concerted
 efforts in shoring up low-cost demand deposits. In 2007-08, the net
 interest margin increased to 3.47% from 2.74% a year earlier. On a
 quarter-to-quarter basis, net interest margin in the year rose from
 2.56% in Q1, to 3.28% in Q2, to 3.91 % in Q3 and 3.93% inQ4,
 highlighting the quality of earnings.
 
 Other income, comprising trading profits, fee and miscellaneous income,
 also increased strongly by 77.75% to Rs. 1,795.49 crores in 2007-08
 from Rs. 1,010.11 crores in 2006-07. Fee and miscellaneous income rose
 by 65.91% to Rs. 1,367.75 crores from Rs. 824.39 crores a year earlier.
 Fee income has a significant share in the earnings of the Bank and its
 main contributors are service charges for account maintenance,
 inter-change fees, third-party distribution fees, transaction banking
 including cash management services, syndication and placement fees and
 fees earned on the processing of loans. Trading profit increased by
 130.31 % to Rs. 427.74 crores from Rs. 185.72 crores a year earlier. A
 significant portion of growth in trading profit was client- driven,
 with particularly high growth in profit earned on merchant
 
 foreign exchange business. In 2007-08, profit on foreign exchange
 transactions increased by 66.18% to Rs. 207.48 crores from Rs.  124.85
 crores. Another contributor to the growth of trading profit was profit
 from investment in equity shares - a result primarily of the buoyancy
 in the capital markets.
 
 In 2007-08, the operating revenue of the Bank increased by 76.76% to
 Rs. 4,380.84 crores from Rs. 2,478.44 crores in 2006-07. Net interest
 income together with fee and other income (excluding trading profit)
 constituted 90.24% of operating revenue, reflecting the robust core
 earning streams of the Bank.
 
 Operating expenses increased by 77.42% to Rs. 2,154.92 crores from Rs.
 1,214.59 crores in 2006-07. Expenses grew mainly due to the increase in
 sales and service staff levels, higher performance related pay, an
 aggressive growth of the Banks retail network and the re-branding
 exercise undertaken by the Bank. Employees costs increased by 75.76%
 to Rs. 670.25 crores from Rs. 381.35 crores last year, constituting
 31.10% of the operating expenses, largely prompted by the increase in
 the number of employees from 9,980 on 31st March 2007 to 14,739 on 31st
 March 2008. During the year, the cost: income ratio was 49.19% against
 49.01% last year.
 
 Operating profit of the Bank in 2007-08 increased by 76.12% to Rs.
 2,225.92 crores from Rs. 1,263.85 crores a year earlier. Further, the
 book value per share increased from Rs. 120.50 as on 31 March 2007 to
 Rs. 245.14 as on 31st March 2008. The business per employee improved to
 Rs. 11.17 crores from Rs. 10.24 crores a year ago. Profit per employee
 has also improved from Rs. 7.59 lacs in 2006-07 to Rs.  8.39 lacs in
 2007-08. In 2007-08, the Bank has created total provisions (excluding
 provisions for tax) of Rs. 579.64 crores compared to Rs.  267.61 crores
 a year ago. The Bank has created provisions for loan assets of Rs.
 344.01 crores compared to Rs. 73.73 crores a year ago, while provision
 for standard assets was Rs. 153.46 crores compared to Rs.122.35 crores
 a year ago. The Bank continued to improve its asset quality, as a
 result of which net NPAs, as a percentage of net customer assets,
 declined from 0.61 % as on 31 March 2007 to 0.36% as on 31 March
 2008. The Bank has also shown substantial growth in several key balance
 sheet parameters for the year ended 31st March 2008. The total balance
 sheet size increased by 49.58% to Rs. 1,09,577.85 crores as on 31st
 March 2008 from Rs. 73,257.22 crores as on 31st March 2007.  Total
 deposits have increased by 49.06% from Rs. 58,785.60 crores as on 31st
 March 2007 to Rs. 87,626.22 crores as on 31st March 2008. Demand
 deposits (savings bank and current accounts) increased by 70.84% to Rs.
 40,026.99 crores on 31st March 2008. Savings bank account deposits have
 increased by 64.79% to Rs. 19,982.41 crores, while current account
 deposits grew by 77.32% to Rs. 20,044.58 crores. Demand deposits
 constituted 45.68% of total deposits on 31st March 2008 compared to
 39.86% last year. On a daily average basis, the total deposits in
 2007-08 increased by 37.35% to Rs. 63,341 crores, in which demand
 deposits increased by 57.00% to Rs. 25,514 crores. As a result, the
 percentage share of demand deposits on a daily average basis increased
 to 40.28% in 2007-08. The total advances of the Bank as on 31 March
 2008 increased by 61.79% to Rs.  59,661.14 crores. Of this, corporate
 advances (comprising large and mid- corporates) increased by 68.32% to
 Rs. 29,025.84 crores. During the same period, advances to SMEs
 increased by 73.98% to Rs.  11,536.92 crores, while agricultural
 lending increased by 35.17% to Rs. 5,506.70 crores. Retail loans
 increased by 52.24% to Rs.  13,591.68 crores. The Banks total
 investments increased by 25.31% to Rs. 33,705.10 crores.  The
 investments in government and approved securities held to meet the
 Banks SLR requirement increased by 22.81 % to Rs. 20,178.84 crores as
 a result of the increase in total deposits. Other investments,
 including corporate debt securities, increased by 29.24% to Rs.
 13,526.26 crores. The total assets of the Banks overseas branches as
 on 31 March 2008 increased by 110% to Rs. 6,672 crores, constituting
 6.09% of the Banks total assets.
 
 As a conscious strategy of building an organic growth engine during the
 year, the Bank continued to expand its distribution network, in both
 domestic and overseas geographies, to enlarge its reach and accelerate
 its business momentum. The Bank has developed a branch network which is
 built on customer-convenience and service, helping it particularly in
 the acquisition of low-cost retail deposits, retail assets, lending to
 agriculture, SME and mid-corporates and facilitating the cross-selling
 of third-party products.
 
 During 2007-08,143 new branches were added to the Banks network,
 taking the number of branches to 651. This includes 33 extension
 counters that have been upgraded to branches.  As on 31st March 2008,
 the Bank had a network of 651 branches and 20 extension counters as
 against 508 branches and 53 extension counters a year earlier. Out of
 the 651 branches, 158 branches are in semi-urban and rural areas. With
 the opening of these offices, the geographical reach of the Bank
 extends to 29 States and 3 Union Territories covering 405 centres.
 During the year, the Bank set up 423 ATMs, thereby taking the ATM
 network of the Bank from 2,341 to 2,764, enabling it to retain its
 status of being the third largest ATM network provider among all banks
 in the country. During the year, the Bank also expanded overseas with
 the opening of a branch at the Dubai International Finance Centre
 (DIFC). This was in addition to the existing branches at Singapore and
 Hong Kong and the representative Office in Shanghai. The Bank has also
 received the authorization of the Central Bank of the UAE to establish
 a Representative Office in Dubai. The opening of these overseas offices
 will provide significant opportunities to the Bank to finance
 cross-border trade and manufacturing activities in addition to the
 ability to source remittances and other businesses from the NRI
 community.
 
 CAPITAL & RESERVES
 
 During the year under review, the Bank has raised capital in the form
 of Tier I and Tier II Capital to support future growth. The Bank has
 raised Tier I Capital in the form of equity capital through
 simultaneous offerings in the form of a follow-on Global Depositary
 Receipt (GDR) issue, a Qualified Institutional Placement (QIP) and a
 preferential allotment of equity shares to the promoters of the Bank.
 As a result, the Bank mobilised an aggregate of Rs. 4,534.36 crores
 through the three-way offering as per the details below.
 
 The Bank raised Rs. 878.83 crores (equivalent to US Dollars 218.06
 million) through the allotment of 1,41,32,466 GDRs, each representing
 one equity share of the Bank at a price of US Dollars 15.43 per GDR.
 The GDR was priced at a nominal discount to the closing price of the
 Banks listed GDR on the London Stock Exchange (LSE) but at par with
 the preceding one-month average price of GDRs quoted on the LSE.
 Converted at the Noon-Day Buying Rate of US Dollars published by the
 Federal Reserve in New York, the price of the underlying share in the
 Indian market was Rs. 620 per share, which is a discount to the closing
 price of the Banks share of Rs. 644.60 on the NSE as on that date. The
 GDRs are listed and traded on the London Stock Exchange.
 
 The Bank also raised Rs. 1,752.43 crores by issuing 2,82,64,934 equity
 shares under QIP. The equity shares under the QIP were priced along
 with the GDR at Rs. 620 per share (equivalent to the price offered
 under the GDR offering). To maintain the percentage shareholding of the
 Banks promoters at the pre-GDR/QIP offering level, the Administrator
 of the Specified Undertaking of the Unit Trust of India (UTI-1), Life
 Insurance Corporation of India, General Insurance Corporation of India
 and three government-owned general insurance companies participated in
 a preferential offer by subscribing to 3,06,95,129 equity shares. The
 equity shares offered under the preferential allotment route were also
 priced at Rs. 620 per share (equivalent to price at which both GDR and
 QIP was priced). Through the process of preferential allotment of
 equity shares to promoter entities, the Bank raised Rs.1,903.10 crores.
 Asa result, the Bank raised, as stated above, an aggregate equity
 capital of Rs. 4,534.36 crores under GDR/QIP and the preferential
 offer. This will help the Bank in continuing its growth strategy and in
 strengthening its capital adequacy ratio. The Bank is now well
 capitalised, with the capital adequacy ratio at the end of the year at
 13.73%, substantially above the benchmark requirement of 9% stipulated
 by Reserve Bank of India. Of this Tier I Capital amounted to 10.17%, up
 from 6.42% a year earlier, while Tier II Capital was at 3.56%.
 
 During the year under review, the Bank also allotted equity shares to
 employees under its Employee Stock Option Plan aggregating 29,86,353
 equity shares.
 
 The paid up capital of the Bank as on 31st March 2008 thereby rose to
 Rs. 357.71 crores from Rs. 281.63 crores as on 31st March 2007.  The
 shareholding pattern of the Bank as of 31st March 2008 was as under.
 
 Sr. No.  Name of Shareholders                    % of Paid Up Capital
 
 i.       Administrator of the Specified 
          Undertaking of the Unit 
          Trust of India (UTI-I)                           27.18
 
 ii.      Life Insurance Corporation of India              10.40
 
 iii.     General Insurance Corporation and 
          four PSU Insurance Companies                      4.93
 
 iv.      Overseas Investors including Flls/OCBs/NRIs      35.46
 
 v.       Foreign Direct Investment (GDR issue)             3.64
 
 vi.      Other Indian Financial Institutions/ 
          Mutual Funds/ Banks                               8.33
 
 vii.     Others                                           10.06
 
          Total                                           100.00
 
 During the year, the Bank has also raised US Dollars 60 million
 (equivalent to Rs. 243.12 crores) as Upper Tier II Capital from
 Singapore under its MTN Programme.
 
 The Banks shares are listed on the NSE, the BSE, the Ahmedabad Stock
 Exchange and the OTCEI (under permitted securities). The GDRs issued by
 the Bank are listed on the London Stock Exchange (LSE). The Bonds
 issued by the Bank under the MTN programme are listed on the Singapore
 Stock Exchange. The listing fees relating to all stock exchanges for
 the current year have been paid. With effect from 26th March 2001, the
 shares of the Bank have been included and traded in the BSE GroupA.
 
 DIVIDEND
 
 The Banks diluted Earning per Share (EPS) for 2007-08 has risen to Rs.
 31.31 from Rs. 22.79 during 2006-07. In view of the excellent financial
 performance of the Bank, the encouraging future outlook of the Bank as
 well as the objective of rewarding shareholders with cash dividends
 while retaining capital to maintain a healthy capital adequacy ratio to
 support future growth, the Board of Directors has recommended a higher
 dividend rate of 60% on equity shares, compared to the 45% dividend
 declared for the last year. This increase reflects our confidence in
 the Banks ability to consistently grow earnings over time.
 
 BOARD OF DIRECTORS
 
 During the year, some changes in the Board of Directors have taken
 place. Shri K. N. Prithviraj was appointed as Additional Director on
 9th January 2008, joining the Board as a nominee of the Administrator
 of the Specified Undertaking of the Unit Trust of India (UTI - I).
 Further, Shri S. B. Mathur, a nominee of the Administrator of the
 Specified Undertaking of the Unit Trust of India (UTI - I) has resigned
 on 6th December 2007.
 
 The Board of Directors places on record its appreciation and gratitude
 to Shri S. B. Mathur for the valuable services rendered by him during
 his tenure as Director of the Bank.
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the Bank, Shri N. C. Singhal, Shri J. R.
 Varma and Shri R. B.L. Vaish retire by rotation at the Fourteenth
 Annual General Meeting and, being eligible, offer themselves for re-
 appointment as Directors of the Bank.
 
 SUBSIDIARIES
 
 The Bank has set up two wholly-owned subsidiaries. Axis Sales Limited,
 and Axis Private Equity Limited. Axis Sales Limited has been set up for
 marketing credit cards and retail asset products. The objective of this
 subsidiary is to build a specialised force of sales personnel, optimise
 operational efficiency and productivity and thereby reduce costs. The
 sales subsidiary also seeks to provide greater control and monitoring
 of the sales effort vis-a-vis the DSA model. The second subsidiary of
 the Bank, Axis Private Equity Limited has been formed primarily to
 carry on the activities of managing (directly or indirectly)
 investments, venture capital funds and off-shore funds. In terms of an
 exemption received from the Ministry of Corporate Affairs, Government
 of India through its letter no. 47/417/2007-CL-lll dated 22nd November
 2007 under Section 212(8) of the Companies Act 1956, copies of the
 Directors Report, report of the auditors of the two subsidiaries along
 with financial statements have not been attached to the accounts of the
 Bank for the financial year ended 31st March 2008. Any shareholder who
 may be interested in obtaining a copy of these details may write to the
 Company Secretary at the Registered Office of the Bank. These documents
 will also be available for examination by any shareholder of the Bank
 at its Registered Office and also at the registered offices of the two
 subsidiaries. Inline with the Accounting Standard 21 (AS 21) issued by
 the Institute of Chartered Accountants of India, the consolidated
 financial results of the Bank along with its subsidiaries for the year
 ended 31st March 2008 are enclosed as an Annexure to this report.
 
 EMPLOYEE STOCK OPTION PLAN (ESOP)
 
 The Bank has instituted an Employee Stock Option Scheme to enable its
 employees, including whole-time Directors, to participate in the future
 growth and financial success of the Bank. Under the Scheme 2,78,00,000
 options can be granted to employees. The employee stock option scheme
 is in accordance with the Securities and Exchange Board of India
 (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines,
 1999. The eligibility and number of options to be granted to an
 employee is determined on the basis of the employees work performance
 and is approved by the Board of Directors.
 
 The Banks shareholders approved plans in February 2001, June 2004 and
 June 2006 for the issuance of stock options to employees.  Under the
 first two plans and upto the grant made on 29th April, 2004, the option
 conversion price was set at the average daily high- low price of the
 Banks equity shares traded during the 52 weeks preceding the date of
 grant at the Stock Exchange which has had the maximum trading volume of
 the Banks equity share during that period (presently the NSE). Under
 the third plan and with effect from the grant made by the Company on
 10th June 2005, the pricing formula has been changed to the closing
 price on the day previous to the grant date. The Remuneration and
 Nomination Committee granted options under these plans on seven
 occasions, 11,18,925 during 2000-01,17,79,700 during 2001-02, 27,74,450
 during 2003-04, 38,09,830 during 2004-05, 57,08,240 during 2005-06,
 46,95,860 during 2006-07 and 67,29,340 during 2007-08. The options
 granted, which are non-transferable, vest at the rate of 30%, 30% and
 40% on each of three successive anniversaries following the granting,
 subject to standard vesting conditions, and must be exercised within
 three years of the date of vesting. As of 31st March 2008, 1,09,50,436
 options had been exercised and 1,27,94,268 options were in force.
 
 Other statutory disclosures as required by the revised SEBI guidelines
 on ESOPs are given in the Annexure to this report.
 
 CORPORATE GOVERNANCE
 
 The Bank is committed to achieving a high standard of corporate
 governance and it aspires to benchmark itself with international best
 practices. The corporate governance practices followed by the Bank are
 enclosed as an Annexure to this report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 The Board of Directors hereby declares and confirms that:
 
 i.  The applicable accounting standards have been followed in the
 preparation of the annual accounts and proper explanations have been
 furnished, relating to material departures.
 
 ii.  Accounting policies have been selected, and applied consistently
 and reasonably, and prudent judgements and estimates have been made so
 as to give a true and fair view of the state of affairs of the Bank and
 of the Profit & Loss of the Bank for the financial year ended 31st March
 2008.  iii.  Proper and sufficient care has been taken for the
 maintenance of adequate accounting records, in accordance with the
 provisions of the Companies (Amendment) Act, 2000, for safeguarding the
 assets of the Bank and for preventing and detecting fraud and other
 irregularities.
 
 iv.  The annual accounts have been prepared on a going concern basis.
 
 STATUTORY DISCLOSURE
 
 Considering the nature of activities of the Bank, the provisions of
 Section 217(1)(e) of the Companies Act, 1956 relating to conservation
 of energy and technology absorption do not apply to the Bank. The Bank
 has, however, used information technology extensively in its
 operations.
 
 The statement containing particulars of employees as required under
 Section 217(2A) of the Companies Act, 1956 and the rules made
 thereunder, is given in an Annexure appended hereto and forms part of
 this report. In terms of Section 219(1) (iv) of the Act, the Report and
 Accounts are being sent to the shareholders excluding the aforesaid
 Annexure. Any shareholder interested in obtaining a copy of the
 Annexure may write to the Company Secretary at the Registered Off ice
 of the Bank.
 
 AUDITORS
 
 M/s S. R. Batliboi & Co., Chartered Accountants, Statutory Auditors of
 the Bank since 2006, retire on the conclusion of the Fourteenth Annual
 General Meeting and are eligible for re-appointment, subject to the
 approval of Reserve Bank of India, and of the shareholders. As
 recommended by the Audit Committee, the Board has proposed the
 appointment of M/s S.R. Batliboi & Co., Chartered Accountants as
 Statutory Auditors for the financial year 2008-09. The shareholders are
 requested to consider their appointment.
 
 ACKNOWLEDGEMENTS
 
 The Board of Directors places on record its gratitude to the Reserve
 Bank of India, other government and regulatory authorities, financial
 institutions and correspondent banks for their strong support and
 guidance. The Board acknowledges the support of the shareholders and
 also places on record its sincere thanks to its valued clients and
 customers for their continued patronage. The Board also expresses its
 deep sense of appreciation to all employees of the Bank for their
 strong work ethic, excellent performance, professionalism, team work,
 commitment, and initiative which has led to the Bank making commendable
 progress in todays challenging environment.
 
                            For and on behalf of the Board of Directors
 
 Place: Mumbai                                 P. J. Nayak
 Date : April 21, 2008              Chairman & Chief Executive Officer