Dear Shareholders,
 
 It is my pleasure to present the Annual Report of your Bank along with
 the Balance Sheet as at 31st March,2012 and Profit & Loss Account for
 the financial year ended 31st March 2012. After crossing the landmark
 business mix of Rs. 1 Lac Crore last year I am pleased to inform you that
 with your support and confidence of the customers the Bank was able to
 cross Business Mix of Rs. 1,34,000 crore during the year.
 
 The Backdrop:
 
 The Financial Year 2011-12 had been a challenging year. The Global
 Economies witnessed a modest recovery with accelerated GDP growth in
 US. However concerns persisted with regard to the sustaining of the
 momentum. The uncertainty in the EURO zone primarily because of the
 sovereign debt crisis even after large scale infusion of liquidity by
 the European Commercial Banks has resulted in the negative GDP growth
 in the fourth quarter. The increase in oil prices which are mainly
 fuelled by uncertainties of supply have raised concerns on escalation
 of global inflation.
 
 The emerging market economies which are viewed as growth engines of the
 world economy world over have also slowed down due to tightening of the
 monetary conditions to tame the rising inflation.
 
 The Indian economy which had registered a growth of 8.6% during 2011
 has further moderated during 2012 and is expected to grow at 6.9% very
 close to the base line projection of 7.00% by Reserve Bank of India.
 This has been mainly on account of slowdown in the industrial sector
 due to cumulative effect of the monetary tightening and slackening of
 external demands.
 
 The Reserve Bank of India monetary stance in the first half
 concentrating on containing the inflation paused with unchanged policy
 rates in the mid quarter review in December 2011 and modified policy
 rates downwards in its major policy announcements for 2012-2013 to
 provide greater liquidity to financial system to enhance growth and at
 the same time ensure safeguards against any demand side inflationary
 pressures re-emerging.
 
 Banking Sector:
 
 In view of the moderation in growth and inflationary trends the non
 food credit growth during 2011-2012 has remained subdued as compared to
 FY. 2010-2011. As on March, 2012 credit growth was 17% whereas the
 deposit growth was 13.40%. This resulted in wide gap between credit
 growth and deposit growth. This has been inspite of Scheduled
 Commercial Banks maintaining high interest rates on deposits for most
 part of the financial year.
 
 Performance of the Bank:
 
 Despite this challenging environment your Bank has been able to perform
 reasonably well registering an all-round growth in various parameters.
 I would like to touch upon some of the areas where your Bank has
 performed well during 2011-12.
 
 Business Mix of the Bank has increased from Rs. 1,09,372.99 crore as of
 March 2011, to a new height of Rs. 1,34,326 crore as of March 2012,
 registering a growth of 22.81%.
 
 Total Deposits have grown to the level of Rs. 77,166.80 crore as of March
 2012 as compared to Rs. 64,209.62 crore as of March 2011, registering a
 growth of 20.18%.
 
 Total Advances of the Bank stood at Rs. 57,159.20 crore as of March 2012
 as compared to Rs. 45,163.37 Crore as of March 2011, registering a growth
 of 26.56%.
 
 Keeping in view the policy of risk diversification, the credit
 deployment has been strategically focused with emphasis on MSME, Retail
 and Agriculture sectors. Retail loans stood at Rs. 7,283 crore, up by
 18.69%, MSME loans stood at Rs. 8,291 crore showing an increase of 22.22%
 while loans to agriculture sector stood at Rs. 6,989 crore, registering a
 growth of 9.39% as of March 2012.  Having identified MSME as one of the
 growth engine Bank has significantly reduced interest rates on such
 advances to make it competitive and has entered into tie up with auto
 manufacturers for financing of three wheelers.
 
 Total income of the Bank for the year has increased by Rs. 1,808.63 Crore
 (32.49%) and stood at Rs. 7,376 Crore. as compared to an Income of Rs.
 5,567.37 Crore earned during the previous year.
 
 Interest income of the Bank registered an increase by 34.98% and
 reached a level of Rs. 6,794.13 Crore during the current year.
 
 Whereas, the Bank''s net interest income (NII) has increased
 substantially by 19.15% and stood at Rs. 2,101 Crore as compared to Rs.
 1,763.37 Crore posted during the previous year.
 
 Core Fee based income has increased by Rs. 102.48 crore (27.31%) from Rs.
 375.25 crore as of March 2011 to Rs. 477.73 crore as of March 2012.
 
 I am pleased to announce that your Bank has been successful in
 registering an increase of 31.31 % in Net Profit from a level of Rs.
 611.63 crore as on March 2011 to Rs. 803.14 crore during the current
 year.
 
 I am happy to announce that the Board of Directors of the Bank have
 recommended an enhanced dividend of 30% (i.e Rs. 3.00 per Share ) for the
 current year as against 22%( Rs. 2.20 per Share ) for the previous year.
 
 Asset Quality:
 
 The Bank has continued its efforts in maintaining asset quality and NPA
 management during the year 2011-12 also, irrespective of the
 deteriorating asset quality experienced by the banking industry in
 general. The concerted efforts made for upgradation of recently slipped
 NPAs, recovery through compromise settlements, action under SARFAESI
 Act etc has enabled Bank to maintain NPA at a minimum possible level.
 The efforts have also contributed in achieving improved cash recovery
 during the year.
 
 The Gross NPA, in absolute terms, increased by Rs. 114.26 Crore from Rs.
 842.24 Crore as on 31st March 2011 to Rs. 956.50 Crore as on 31st March,
 2012. Gross NPA ratio of the Bank decreased to 1.67% as on 31.03.2012
 from 1.86 % as on 31.03.2011.
 
 The Net NPA ratio of the Bank stood at 1.01% as on 31.03.2012 as
 against 1.22% as on 31.03.2011. Net NPAs, in absolute terms increased
 by Rs. 22.78 Crore from Rs. 548.95 Crore as on 31st March, 2011 to 
 Rs. 571.73 Crore as on 31st March, 2012.
 
 Provision Coverage Ratio (including prudential write off) stood at
 75.53% i.e. well above the regulatory requirement of 70%.
 
 The cash recovery in NPA Accounts during the year 2011-12 was Rs. 222.56
 Crore and up gradation in the accounts was Rs. 191.47 Crore. The Bank
 recorded recovery in written off accounts during the year of Rs. 81.93
 Crore including recovery of interest in written off accounts of Rs. 12.17
 Crore.
 
 The Bank has conducted 1461 recovery camps in various Regions during
 the year, which were attended by 16940 borrowers. A total of 2785
 accounts were settled for Rs. 32.46 Crore and 864 accounts were upgraded
 for Rs. 21.33 Crore during the year through such recovery camps.
 
 New Capital Adequacy Norms:
 
 During the year, the Bank allotted 1.67 Crore Equity Shares of face
 value of Rs. 10/- at a price of Rs. 90.73 (including premium of Rs. 
 80.73) aggregating Rs. 151 crore, to the Life Insurance Corporation of 
 India on preferential basis. With the above allotment, Government of 
 India''s holding in the Bank stands reduced to 55.24% from 58.01%.
 
 The Capital to Risk (Weighted) Asset Ratio (CRAR) stood at 11.51% as of
 March 2012, compared to 13.41% as of March 2011, against the
 requirement of 9%. However, the Core CRAR of the Bank under Basel II is
 8.86 % as on 31st March, 2012 which indicates healthy level of Core
 Capital.
 
 The Net Worth of the Bank improved to Rs. 4,256.14 crore as on 31.03.2012
 from Rs. 3,366.43 crore as on 31.03.2011, registering a growth of Rs.
 889.71 Crore (26.43%).
 
 Network and Delivery Channels:
 
 With the focus on increasing the number of delivery channels, the Bank
 has opened 51 new branches during 2011-12. The total number of branches
 of the Bank stood at 1342 as of March 2012.  All the branches of the
 Bank are covered under CBS.
 
 As at 31st March 2012, the Bank had an installation base of 543 ATMs
 comprising of 430 On-site ATMs and 113 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:
 
 It is my firm belief that for a service oriented organization like Bank
 to succeed, human resource which interfaces with customers of the Bank
 should be adequately skilled and efficient. In this regard your Bank
 has continued to focus on imparting training to its employees in an on
 going process for development / improvement of their knowledge, skill
 and business confidence. Trainings are conducted in- house at various
 training centers and also through reputed institutions like NIBM, CAB,
 BIRD, BTC, etc. Bank has also been nominating executives / officers for
 training programs in different foreign locations.
 
 During the year, the Bank had provided training to 3974 employees in
 thrust areas of Credit, Rural Banking, Retail Banking, Risk Management,
 Treasury, Marketing, Information Technology, Management Development,
 Customer Orientation, etc. During the year, 21 executives / officers
 were sent abroad for attending training.
 
 The Bank, to meet its requirements of personnel for increasing business
 levels and opening of new branches, has recruited 408 officers (incl.
 POs) under various scales and disciplines and 404 clerks during the
 year.
 
 Transformation through Technology:
 
 As of March 2012, all the 1342 branches of the bank and the entire
 business have been brought under CBS.
 
 With a view to keep pace with the advancement in Banking technology the
 Bank has launched Dena i Connect - and Dena MConnect the internet and
 mobile Banking Service for the customers of all branches. Dena i
 Connect enables the customers to access their account information
 through internet which under normal circumstances would have required
 them to visit the branch.  The customers of the Bank can make payment
 of Direct Taxes and Indirect Taxes through internet without visiting
 the branch. With Dena MConnect customers can avail various facilities
 including funds transfer using their mobile handset.
 
 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 2011-12, the Bank has implemented Financial Inclusion
 Plan ( FIP ) in 728 villages allocated to it by various SLBCs under
 Lead Bank Scheme.
 
 During 2011-2012 Bank has covered 41 villages by opening Brick and
 Motor Branches and has covered 34 villages by setting up Ultra Small
 Branches. The remaining 653 villages are covered by engaging individual
 Business Correspondents.
 
 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, Micro-Insurance products and issuance of Dena
 Kisan Credit Cards and Dena General Credit Cards.
 
 Corporate Social Responsibilities
 
 Your Bank believes in Corporate Social Responsibility by creating
 sustainable livelihoods and contribute to rural transformation and
 education. In these efforts your Bank has taken initiatives to address
 to some of the pressing developmental challenges. Bank has set up some
 of the social projects like setting up of RSETI and supplementary girl
 child education .
 
 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 12 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 and 1 in Silvassa in the U T. of Dadra & Nagar Haveli
 where your Bank is shouldering the responsibility of Lead Bank.
 
 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 2213 girl students under the scheme.
 
 The Road Ahead:
 
 With the policy stance of Reserve Bank of India intending to adjust
 policy rates to levels in consistent with the current growth
 moderation, ensuring safe guards against demand led inflation re-
 emerging and to provide adequate liquidity to the financial system, the
 growth process is likely to stabilise and hence, the GDP growth outlook
 for 2012-13 is expected to be around 7.3%. The expectation on
 maintaining the economic growth is based on the assumptions of increase
 in investment due to easing of liquidity and stabilization of the
 inflation during the year.
 
 In view of the easier liquidity conditions resulting from the
 moderation of the Monetary Policy stance of the Reserve Bank of India
 with the intention of sustaining growth and also reigning in the
 inflationary pressures, the Bank will be required to have a prudent and
 balanced approach in credit delivery and monitoring system. The
 regulatory measures on implementation of Liquidity Risk Management and
 Basel III Framework will also have impact on the Bank''s performance.
 
 The Bank will continue with its strategy to remain focused on expanding
 its outreach by opening branches in new areas and concentrate on thrust
 areas such as MSME, Retail and Agriculture.  The easing of liquidity
 can enable Bank to bring down the cost of deposit by focusing on
 increasing CASA Deposits. Bank shall also accelerate efforts in
 increasing non interest / fee based income.
 
 Bank has appointed IDBI Intech ( a PSU owned by IDBI ) to suggest
 strategies and assist in the implementation of Business Process
 Re-Engineering exercise involving people, processes and technology.
 
 In line with the Government of India initiatives on Financial
 Inclusion, the Bank will embark upon its urban financial inclusion plan
 by providing banking services to migrant workers / labourers in select
 urban areas of Gujarat and Maharashtra through third party service
 providers.
 
 Acknowledgements:
 
 I express my sincere thanks to the Bank''s 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.
 
 I also acknowledge the valuable guidance, support and co- operation
 received from the Directors on the Board of the Bank.
 
 I am also thankful to the Financial Institutions / Banks and
 Correspondents for their co-operation 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 co-operation in faster business development and progress of
 the Bank.
 
 Nupur Mitra
 
 Chairperson & Managing Director