The Directors have great pleasure in presenting the Banks Annual
 Report along with the Audited Statement of Accounts and the Cash flow
 statement for the year ended 31st March 2011.
 
 Financial Highlights
 
 The Bank took forward its growth story and the major highlights are as
 follows:
 
 - Operating profit increased to Rs.3291.7 crore as against Rs.2747.4 crore
 for 2009-10 registering a growth of 19.8 per cent.
 
 Net profit for 2010-11 crossed the Rs.1700 crore mark and was at Rs.1714.1
 crore as compared to Rs.1555 crore for 2009-10, showing a growth of 10.2
 per cent.
 
 - Net Interest Margin improved to 3.75 per cent from 3.55 per cent.
 
 - Return on average assets was at 1.53 per cent.
 
 - Capital Adequacy Ratio was at 13.56 per cent as compared to 12.71 per
 cent as of March 2010.
 
 Return on Net worth for 2010-11 was at 21.50 per cent.
 
 - Earnings per share was at Rs.38.79 and Book value per share was
 Rs.184.44.
 
 - Global Business of the Bank crossed Rs.180,000 crore during the year
 and was at Rs.181,530 crore, registering a growth of 20.3 per cent.
 
 Total Deposits grew by Rs.17,576 crore to Rs.105,804 crore, a growth of
 19.9 per cent for the year 2010-11.
 
 - Gross Advances were at Rs.75,726 crore, registering an increase of
 Rs.13,068 crore (20.9 per cent) as on 31.3.2011. Overall Credit Deposit
 ratio was at 71.6 per cent.
 
 - Priority Sector Advances at Rs.25,969 crore, grew by Rs.4304 crore (19.9
 per cent).
 
 - Agriculture Credit grew by Rs.1904 crore (20.8 per cent) to Rs.11,048
 crore and accounted for 18.57 per cent of Adjusted Net Bank Credit.
 
 - The Bank scaled new heights in the recovery of NPA.  During 2010-11,
 total recovery of NPA (including AUC) amounted to Rs.756.58 crore as
 against Rs.587.48 crore last year.
 
 - Gross NPA was at 0.98 per cent as against 0.81 per cent for March
 2010 and Net NPA was at 0.53 per cent as against 0.23 per cent in March
 2010.
 
 - Under Financial Inclusion project, a total of 1.53 lakh No-Frill
 accounts have been opened.
 
 - Total domestic branch network of the Bank in India increased to 1860
 as on 31.3.2011 and all the branches are under CBS. Besides, the Bank
 has 3 overseas branches.
 
 - Total number of ATMs increased to 1128, which included 322 offsite
 ATMs and our customers can have access to 70000 ATMs in the shared
 network.
 
 Income and Expenditure
 
 - During the year, total income of the Bank increased to Rs.10542.9 crore
 with a strong growth in interest income to the tune of Rs.9361.0 crore or
 21.4 per cent.
 
 - Net interest income registered a rise to Rs.4036 crore (27.7 per cent).
 
 - Core non-interest income increased to Rs.905.65 crore (26.7 per cent).
 
 - On the Expenditure side, the Banks interest expenditure was at
 Rs.5324.9 crore, an increase of Rs.771.7 crore or 16.9 per cent.
 
 - Total operating expenses at T1926.3 crore for 2010-11 has shown an
 increase of Rs.196.0 crore, an increase of 11.3 per cent, when compared
 to the level of Rs.1730.3 crore in 2009-10.
 
 The income and expenditure for the period 2010-11 are given hereunder:
 
                                              (Rs.. in crore)
 
 Particulars                  2009-10     2010-11     Absolute     %
                                                      Growth    Growth
 
 Total Interest Income        7714.37     9361.02     1646.65    21.4
 
 Total Interest Expenditure   4553.18     5324.92      771.74    16.9
 
 Net Interest Income          3161.19     4036.12      874.93    27.7
 
 Net Operating Income         4477.60     5217.99      740.39    16.5
 
 Operating Expenses           1730.25     1926.31      196.06    11.3
 
 Operating Profit             2747.35     3291.68      544.33    19.8
 
 Provisions & Contingencies   1192.36     1577.60      385.24    32.3
 including depreciation
 on account of transfer of
 securities to HTM category
 
 Net Profit                   1554.99     1714.07      159.08    10.2
 
 Spread Analysis
 
 - The Banks Net Interest Income improved to Rs.4036 crore in 2010-11
 from Rs.3161.2 crore in 2009-10, thereby registering a growth of 27.7 per
 cent.
 
 - The increase in Interest Income led to an increase in Net Interest
 Margin to 3.75 per cent as of March 2011.
 
 The Spread analysis is as under:
 
                                         (Rs.. in crore)
 
                                                        Growth
 
 Parameters                2009-10     2010-11   Absolute       %
 
 Interest Spread           3161.19     4036.12    874.93      27.7
 
 Yield on Funds %             8.28        8.35
 
 Cost of Funds %              4.89        4.75
 
 Net Interest                 3.55        3.75
 Margin %
 
 IMPORTANT RATIOS
 
                                                   (in per cent)
 
 Parameters                             2009-10         2010-11
 
 Yield on Advances                       10.71           10.28
 
 Yield on Investment                      6.35            6.91
 
 Cost of Deposits                         5.66            5.41
 
 Return on Assets                         1.67            1.53
 
 Cost Income ratio                       38.64           36.92
 
 Business per employee (Rs. in lakh)      760.78          929.76
 
 Profit per employee (Rs. in lakh)          7.92            8.88
 
 DIVIDEND
 
 The Board of Directors has recommended a dividend of 75 per cent for
 2010-11. The dividend for financial year 2010-11 shall be subject to
 tax on dividend to be paid by the Bank. The total outflow on account of
 dividend for 2010-11 is Rs. 362.33 crore including dividend tax. The
 payout ratio works out to 21.1 per cent.
 
 NET WORTH AND CRAR
 
 - The Net worth of the Bank improved to Rs.8326.55 crore as on 31.3.2011
 from n047.02 crore as on 31.03.2010, reflecting a growth of 18.16 per
 cent due to plough back of profits.
 
 - As per Basel II, the Capital to Risk Weighted Assets Ratio (CRAR) is
 13.56 per cent as of March 2011, compared to 12.71 per cent as of March
 2010, against the requirement of 9 per cent.
 
 The CRAR of Tier I capital was 11.02 per cent as of March 2011 as
 against 11.13 per cent as of March 2010.
 
                                         (in per cent)
 
                                            As on
                                 March 2010         March 2011
 
 Tier-I Capital                    11.13              11.02
 
 Tier-ll Capital                    1.58               2.54
 
 Total                             12.71              13.56
 
 - In accordance with the priorities accorded by the Government of
 India, the Banks Advances to SC/ST
 reachedRs.1876.15croreasof31s,March2011 constituting 7.22 per cent of
 total Priority Sector advances.
 
 - Also, as per Government guidelines, during the process of Direct
 Recruitment and Internal Promotions, Pre- recruitment and Pre-promotion
 trainings were offered to SC/ST employees.
 
 - Periodical Quarterly Meetings were conducted and grievances, if any,
 were resolved then and there.  The Cell also ensures prompt disposal of
 grievances/ representations of SC/ST employees. A Chief Liaison Officer
 in the rank of General Manager has been nominated for this purpose.
 
 CHANGES IN THE BOARD DURING THE YEAR
 
 During the period under review, Shri Rajeev Rishi assumed charge as
 Executive Director on October 1, 2010.
 
 Shri. A S Bhattacharya, Executive Director demitted office on September
 30, 2010 on his elevation as Chairman & Managing Director, Bank of
 Maharashtra.
 
 Shri S Karuppasamy, was appointed as the RBI nominee to the Board on
 July 30, 2010. Shri M Jayanath, was appointed as the Workmen Employee
 Director of the Bank by the Government of India and assumed charge on
 April 21,2010.
 
 Shri C R Gopalasundaram, Shri T T Natarajan, Shri G Charath Chandran
 and Mrs. Saria Khan were Directors of the Bank upto 29.07.2010,
 21.11.2010, 13.01.2011 and 30.01.2011 respectively.
 
 DIRECTORS RESPONSIBILITY STATEMENT:
 
 The Directors confirm that in the preparation of the annual accounts
 for the year ended March 31, 2011 -
 
 - 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 consistently applied;
 
 Reasonable and prudent judgment and estimates were made so as to give a
 true and fair view of the state of affairs of the Bank at the end of
 the financial year and of the profit of the Bank for the year ended
 March 31, 2011.
 
 - Proper and sufficient care were 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 expresses its deep sense of gratitude to the Government of
 India, Reserve Bank of India and Securities & Exchange Board of India
 for the valuable guidance and support received from them. The Board
 also thanks the financial institutions and correspondent banks for
 their co-operation and support. The Board acknowledges the unstinted
 support of its customers and shareholders.
 
 The Board places on record its sincere appreciation of the valuable
 contribution made by Shri A S Bhattacharya as Executive Director of the
 Bank from 01.04.2010 to 30.09.2010
 
 The Board places on record its appreciation of the valuable
 contribution made by Shri C R Gopalasundaram, Shri T T Natarajan, Shri
 G Charath Chandran and Mrs. Saria Khan, who ceased to be members during
 the year.
 
 The Board places on record its appreciation of the dedicated services
 and contribution made by members of staff for the overall performance
 of the Bank.
 
 For and on behalf of Board of Directors 
 CHAIRMAN AND MANAGING DIRECTOR