I have great pleasure in presenting to you the Annual Report of the
 Bank along with the Balance Sheet as at 31st March 2011 and Profit &
 Loss Account for the year ended 31st March 2011. At the outset, I am
 pleased to inform you that with your unstinted support, the Bank was
 able to cross the Business Mix of Rs. 1 Lac Crore during the year.
 
 The Backdrop:
 
 The Financial Year 2010-11 had been a year of multi speed recovery with
 the growth in the advanced economy as well as the emerging / developing
 economies outpacing the initial expectations.  Although the Global
 Economies have shown improvement during the year, the increase in oil
 prices and significant sovereign default risks continue to threaten
 growth sustenance. The increase in oil prices have raised concerns on
 escalation of global inflation due to increase in commodity, fuel and
 other industrial input prices. The emerging market economies world over
 have shown strong growth, mainly on account of huge domestic demand,
 good exports and higher foreign investments. However, these economies
 are also under inflationary pressure due to the increase in oil prices.
 
 The Indian economy has registered a moderate growth rate of 8.6% during
 2011 mainly on account of growth in Agriculture, resurgence in Exports
 and huge domestic consumption. However the growth in the industrial and
 service sector has decelerated particularly in the second half mainly
 on account of high base effect and moderation in investment demand.
 With Reserve Bank of India monetary stance, concentrating on containing
 the inflation albeit ensuring liquidity available for growth, the GDP
 growth is estimated to moderate in the short term.
 
 Banking Sector:
 
 Year on Year, the non food credit growth has been above 20%, the
 projected level of Reserve Bank of India. As on March, 2011 credit
 growth was 21.38% whereas the deposit growth was 15.84%. This resulted
 in wide gap between credit growth and deposit growth.  Recognizing the
 structural imbalance between deposit growth and credit growth as well
 as the underlying signals of the anti-inflationary monetary policy
 stance, banks raised their deposit rates to improve deposit
 mobilization while raising the lending rates, which could be expected
 to moderate the aggregate demand, going forward.  Performance of the
 Bank:
 
 I would like to touch upon some areas where your Bank has performed
 well during 2010-11.
 
 Business Mix of the Bank has increased from Rs. 87,066.36 crore as of
 March 2010, to a new height of Rs. 1,09,372.99 crore as of March 2011,
 registering a growth of 25.62%.The Bank has crossed the landmark
 business mix of Rs. 1 Lac crore during the year.
 
 Total Deposits have grown to the level of Rs. 64,209.62 crore as of
 March 2011 as compared to Rs. 51,344.28 crore as of March 2010,
 registering a growth of 25.05%.
 
 Total Advances of the Bank stood at Rs. 45,163.37 crore as of March
 2011 as compared to Rs. 35,721.41 Crore as of March 2010, registering a
 growth of 26.42%.
 
 CASA increased by 24.15% during the Financial year 2010-11 as compared
 to 23.01% in the previous year. In absolute terms CASA increased by Rs.
 4424 Crore.
 
 The thrust areas for credit expansion, with emphasis on risk dispersal
 continued to be on MSME, Retail and Agriculture sectors.  Retail loans
 stood at Rs. 6,136 crore, up by 14.05%, MSME loans stood at Rs. 6,784
 crore showing an increase of 20.12% while loans to agriculture sector
 stood at Rs. 6,389 crore, registering a growth of 32.38% as of March
 2011.
 
 Total income of the Bank for the year has increased by Rs. 968.38
 Crore. (21.06%) and stood at Rs. 5567.37 Crore. as compared to an
 Income of Rs. 4598.99 Crore earned during the previous year.
 
 Interest income of the Bank has increased by 25.51% and reached a level
 of Rs. 5033.53 Crore.
 
 Whereas, the Banks net interest income (Nil) has increased
 substantially by 60.30% and stood at Rs. 1763.37 Crore as compared
 
 to Rs. 1100.03 Crore posted during the previous year.
 
 Fee based Income has increased by ? 65.67 crore (21.21%) from Rs.
 309.58 crore as of March 2010 to Rs. 375.25 crore as of March 2011.
 
 I am privileged to announce that as a result of the above and the
 strenuous efforts by all the employees of the Bank, the Net Profit of
 the Bank has increased from Rs. 511.25 crore to Rs. 611.63 crore during
 the year 2010-11, after providing for the full pension liability for
 the retired employees who opted for second pension option and 1/5th of
 liability for existing employees who opted for second pension option
 and enhancement of gratuity limit aggregating to Rs. 206.42 crore
 during the last quarter. This represents an increase of 19.63% during
 the year.
 
 I am happy to announce that the Board of Directors of the Bank have
 recommended an enhanced dividend of 22% as against 20% for the previous
 year.  
 
 Asset Quality:
 
 The Bank repeated its commendable performance in maintaining asset
 quality and NPA management during the year 2010-11 also, irrespective
 of the unprecedented slippages experienced by the banking industry in
 general. The Banks performance in NPA management is directly
 attributed to the concerted efforts made for upgradation of recently
 slipped NPAs, recovery through compromise settlements, action under
 SARFAESI Act etc which resulted in improving cash recovery and
 upgradation to a considerable extent.  The proactive steps taken by the
 Bank in NPA reduction ensured that level of NPAs is restricted to the
 minimum possible.
 
 The Gross NPA, in absolute terms, increased by Rs. 200.25 Crore from
 Rs. 641.99 Crore as on 31st March 2010 to Rs. 842.24 Crore as on 31st
 March 2011. Gross NPA ratio of the Bank increased marginally to 1.86%
 as on 31.03.2011 from 1.80% as on 31.03.2010.
 
 The Net NPA ratio of the Bank stood at 1.22% as on 31.03.2011 as
 against 1.21% as on 31.03.2010. Net NPAs, in absolute terms increased
 by Rs. 121.42 Crore from Rs. 427.53 Crore as on 31st March 2010 to Rs.
 548.95 Crore as on 31st March 2011.
 
 Provision Coverage Ratio (including prudential write off) stood at
 74.62% i.e. well above the regulatory requirement of 70%.
 
 Special attention was given to recovery in NPAs during the year by
 designating recovery facilitators at all major centres to augment
 recovery efforts through negotiated settlements. Special recovery
 drives were continued for recovery in written off accounts. Recovery
 Camps and Lok Adalats were organized at Regional Offices and major
 centres on regular intervals.
 
 The cash recovery during the year 2010-11 was Rs. 191.05 Crore and
 upgradation in the accounts was Rs. 171.12 Crore. The Bank recorded an
 all time high recovery in written off accounts during the year at Rs.
 134.58 Crore as against Rs. 125.54 Crore recorded during the previous
 year.
 
 The Bank has conducted 1526 recovery camps in various Regions during
 the year, which were attended by 21340 borrowers. A total of 2032
 accounts were settled for Rs. 19.52 Crore and 1242 accounts were
 upgraded for Rs.  34.11 Crore during the year through such recovery
 camps.
 
 New Capital Adequacy Norms:
 
 During the year, the Bank allotted 4.65 Crore Equity Shares of face
 value of Rs. 10/- at a price of Rs. 115.75 (including premium of Rs.
 105.75) aggregating Rs. 539 crore, to the Government of India on
 preferential basis. With the above allotment, Government of Indias
 holding in the Bank stands enhanced to 58.01% from 51.19%.
 
 The Capital to Risk (Weighted) Asset Ratio (CRAR) stood at 13.41% as of
 March 2011, compared to 12.77% as of March 2010, against the
 requirement of 9%.
 
 The Net Worth of the Bank improved to Rs. 3,366.43 crore as on
 31.03.2011 from Rs. 2,201.64 crore as on 31.03.2010, registering a
 growth of Rs. 1,164.79 Crore (52.91%).  Network and Delivery Channels:
 
 There was focus on increasing the number of delivery channels and the
 Bank has opened 68 new branches during 2010-11. The total number of
 branches of the Bank stood at 1291 as of March 2011. All the branches
 of the Bank are covered under CBS.
 
 The Bank has consciously included centres where Banks presence was
 negligible or hitherto uncovered area. These centres are mainly in
 Jharkhand, Bihar, West Bengal, Sikkim, Himachal Pradesh.Tamil Nadu,
 Orissa and Uttarakhand. The Bank has also identified areas / centres,
 mostly falling in the category of under banked areas as- well as under
 Minority dominated districts for opening branches.
 
 As at 31st March 2011, the Bank had an installation base of 496 ATMs
 comprising of 391 on-site ATMs and 105 Off-site ATMs for the
 convenience of customers. Two of the ATMs can be operated by thumb
 impression which is convenient for small customers (under financial
 inclusion) and semi-literate persons.
 
 Human Resource Development:
 
 Human resources forms your Banks interface with its customers and
 efficient customer service across the counters is the key to success
 against tough competition in the industry. The Bank continued to focus
 on skill upgradation of employees at all levels through training
 programmes, workshops, seminars etc, both through the Banks training
 set up and reputed external training set-ups.
 
 During the year, the Bank had provided training to 6343 employees in
 thrust areas of Credit, Rural Banking, Retail Banking, Risk Management,
 Treasury, Marketing, Information Technology, Management Development,
 Customer Orientation, etc. During the year, 10 executives were sent
 abroad for attending training.
 
 The Bank, to meet its requirements of personnel for increasing business
 levels and opening of new branches, has initiated recruitment of 564
 officers (incl. 100 POs) under various scales and disciplines and 250
 clerks during the year. Out of 564, 112
 
 specialist officers in the areas of Forex, Credit & Agriculture are
 being recruited through Campus interview.
 
 Transformation through Technology:
 
 As of March 2011, all the 1291 branches of the bank and the entire
 business have been brought under CBS.
 
 The Bank has launched DenaI Connect - the internet Banking Service
 for the customers of all branches. This enables the customers to access
 their account information through internet which under normal
 circumstances would have required them to visit the branch. Under DenaI
 Connect, the customer of the Bank can make payment of Direct Taxes and
 Indirect Taxes through internet without visiting the branch.
 
 The Bank has started SMS Alert facility through which customers get
 alerts on occurrence of any financial transactions or through delivery
 channels. Customers also receive alerts for due dates of Term Deposits
 as well as Loan installments due date.
 
 Financial Inclusion Plan:
 
 During the year 2010-11, the Bank has covered 310 villages under
 Financial Inclusion Plan against the set target of 299 villages.
 
 The Financial Inclusion plan apart from providing banking outlets, also
 includes extension of facilities like No Frills Accounts, Inbuilt
 Overdraft facility in the No Frills Accounts, Entrepreneurship Credit,
 Remittance facilities and Micro-Insurance products.
 
 Coverage of Households
 
 During the year 2010-11, the Bank has covered 136548 households against
 the set target of 137479 households, in the villages identified under
 the Financial Inclusion Plan. Remaining households could not be covered
 mainly on account of migration or unwillingness to open the accounts.
 
 No Frills Accounts:
 
 Total 1,53,193 No Frills Accounts have been opened in the FIP Villages
 by March 2011 against the annual target of 90,000 accounts during
 2010-11. However, the total number of No Frill Accounts in the Bank
 stood at 9,01,140 as of March, 2011.
 
 Inbuilt OD facility in the No Frills Accounts:
 
 OD facility has been extended by the Bank in case of 92,046 No Frills
 Accounts against the target of 81,000 No Frills Accounts during
 2010-11. The total number of inbuilt OD facility extended in the No
 Frills Accounts is 2,37,622 as of March 2011.
 
 Dena Kisan Credit Cards:
 
 Under Financial Inclusion Plan, against projected target of issuing
 1.87 lac cards for Rs. 1540.20 crore for March 2011, the Bank has
 achieved issuance of 1.87 lac Dena Kisan Credit Cards amounting to Rs.
 2,107.56 crore.
 
 Dena General Credit Cards:
 
 As of March 2011, the Bank has issued 13,000 Dena General Credit Cards
 amounting to Rs. 23.05 Crore, under Financial Inclusion Plan.
 
 Corporate Social Responsibilities
 
 Rural Self Employment Training Institutes (RSETIs):
 
 The Bank has set up a Society known as Dena Rural Development
 Foundation (DRDF) with a corpus of Rs. 150.00 lacs to take up various
 initiatives in Rural Development. DRDF in turn has established 11 Rural
 Self Employment Training Institutes (RSETIs) in its lead districts, 6
 RSETIs in the State of Gujarat and 5 RSETIs in the state of
 Chhattisgarh. These RSETIs have organised 358 training programmes and
 have imparted training to 11727 youth for various activities during the
 year 2010-11.
 
 Sponsoring Education of Girl Child:
 
 As a part of Corporate Social Responsibility, the Bank has continued
 with the Nobel scheme viz. Dena Laxmi Shiksha Protsahan Yojana, to
 sponsor education of Girl students in the villages served by the Bank.
 Under the scheme the Bank has been providing scholarships of Rs. 2000/-
 and Rs. 1500/- per annum to identified girl student belonging to Below
 Poverty Line (BPL) family. Such students are selected from each of the
 schools based on first and second rank secured in 7th Standard from the
 villages under the command area of the Bank. The Bank has so far
 provided scholarships to 2104 girl students under the scheme.
 
 The Road Ahead:
 
 With the policy stance of Reserve Bank of India concentrating on
 containing inflation, the growth process is likely to moderate in the
 medium term and hence, the GDP growth outlook for 2011-12 is expected
 to be around 8%. The expectation on maintaining the momentum in
 economic growth is based on the assumptions of a normal monsoon and
 stabilization of the food prices during the year.
 
 In view of the tight liquidity conditions resulting from the hardening
 of the Monetary Policy stance of the Reserve Bank of India with the
 intention of reigning in the run away inflation, the Bank will be
 required to have a prudent and balanced approach in credit delivery and
 monitoring system. The regulatory measures of enhanced provisioning
 requirements on certain categories of non performing advances and
 restructured advances will have impact on the Banks performance.
 
 The Bank will continue with its strategy to remain focused on expanding
 its outreach by opening branches in new areas, concentrate on thrust
 areas such as MSME, Retail and Agriculture.  To bring down the cost of
 deposit, the Bank will continue to pay focused attention for increasing
 CASA Deposits, sustained efforts in recovery in written off accounts
 and increasing non interest / fee based income.
 
 In line with the Government of India initiatives on Financial
 Inclusion, the Bank will endeavor to open 25 per cent of new branches
 in areas which are located in Tier V and Tier VI centers so as to
 provide Banking access to more and more people.
 
 Acknowledgements:
 
 I express my sincere thanks to the Banks valued customers,
 shareholders and well wishers for their valuable contribution to the
 progress of the Bank and seek their continued support and co- operation
 in future.
 
 I acknowledge with gratitude, the timely advice, valuable guidance and
 support received from Government of India and Reserve Bank of India.
 
 The Bank express special thanks to Government of India for infusing
 capital Rs. 539 crore and thus enabling the bank to maintain a Tier
 CRAR, as on 31st March, 2011, above the prescribed benchmark.
 
 I am also thankful to the Financial Institutions / Banks and
 Correspondents for their cooperation and support to the Bank.
 
 I wish to place on record, the deep appreciation of the valuable
 contribution of the staff, at all levels, without which the progress
 achieved, would have been unattainable. I look forward to your
 continued cooperation in faster business development and progress of
 the Bank.
 
 
 
 
 D. L. Rawal
 Chairman & Managing Director