The Directors are pleased to place before you, the 83rd Annual Report
 of the Bank along with the Audited Balance Sheet as at March 31, 2011
 and the Profit and Loss Account for the year ended March 31, 2011.
 
 PERFORMANCE OF THE BANK
 
 The performance highlights of the Bank for the financial year ended
 March 31, 2011 are as follows:
 
                                                    Rs. in Crore 
 Key Parameters                              2010-11     2009-10
 
 Deposits                                   29721.00    23012.00
 
 Gross Advances                             20659.00    15970.00
 
 Total Gross Business                       50380.00    38982.00
 
 Net Profit                                   292.56      233.76
 
 Capital & Reserves                          1845.16     1484.71
 
 Capital Adequacy (%) –Basel-I                 13.17       14.73
 
 Basel-II                                      14.01       15.39
 
 Earning Per Share (EPS) :
 
 (a) Basic EPS (in Rs.)                         2.59        2.07
 [face value Rs.1/-]
 
 (b) Diluted EPS ( in Rs.)                      2.58        2.06
 [face value Rs.1/-]
 
 Book Value per Share (in Rs.)                 16.33       13.14 
 [face value Rs. 1/-]
 
 Gross NPA as % of Gross Advances               1.11        1.32
 
 Net NPA as % of Net Advances                   0.29        0.39
 
 Return on Average Assets (%)                   1.05        1.07
 
 FINANCIAL PERFORMANCE
 
 Profit
 
 The Bank has achieved a record net profit of Rs. 292.56 Crore during
 the year registering a growth of 25.15% over the previous year. The
 Bank could achieve this quantitative enhancement in net profit
 essentially on account of higher scale of operations and better
 management of assets and liabilities of the Bank.
 
 The Profit and Loss Account shows an Operating Profit of Rs. 548.08
 Crore before depreciation, tax and provision as per details given
 below:
 
                                                        (Rs. in Crore)
 
 Profit before depreciation, taxes & provisions                 548.08
 
 Less: Depreciation                                :   22.82
 
 Provision for NPA/NPIs                            :   28.84
 
 Provision for depreciation on investments         :    9.37 
 
 Provision for contingencies                       :   20.00
 
 Provision for Income Tax/ Wealth Tax              :  152.94 
 
 Provision for standard advances                   :   21.60
 
 Provision for restructured advances               :  (0.05)    255.52
 
 Net Profit                                        :            292.56
 
 Transfer from Investment Reserve                  :              4.70
 
 Brought forward from last year                    :             17.03
 
 Profit available for appropriation                :            314.29
 
 Appropriations
 
 Transfer to Statutory Reserve                                   73.15
 
 Transfer to Revenue & Other Reserves                           150.00
 
 Transfer to Special Reserve u/s 36(i) (viii) of                  7.00
 Income Tax Act, 1961
 
 Proposed Dividend                                               56.50
 
 Dividend Tax on Proposed Dividend                                9.17
 
 Carried over to Balance Sheet                                   18.47
 
 Total                                                          314.29
 
 Dividend
 
 The Board of Directors has recommended a dividend of 50% (tax-free in
 the hands of shareholders), i.e., @ Rs. 0.50/- per Equity share of face
 value of Rs.1/- per share as against 40%, i.e. Rs.0.40/- per share
 declared last year.
 
 EXPANSION PROGRAMME / POLICY OF THE BANK
 
 During the year, the Bank opened 61 new branches and 116 ATMs across
 the country. The Bank has been successful in widening its coverage
 across the country with 641 branches and 3 extension counters
 transforming it to a pan Indian Institution.  The branch network now
 covers 26 states/union territories and has a network of 489 ATMs.
 
 The Bank plans to open more new branches and ATMs in the current
 financial year so as to reach the corporate goal of 700 Branches and
 600 ATMs by March 31, 2012.
 
 CAPITAL & RESERVES
 
 The Bank was having an issued and paid up capital of Rs. 113.01 Crore
 as on March 31, 2011. Capital & Reserves of the Bank has improved from
 Rs.1484.71 Crore to a healthy level of Rs. 1845.16 Crore due to plough
 back of profits and revaluation of premises.
 
 THE CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)- Basel I & Basel II
 
 The Capital to Risk Weighted Assets Ratio (CRAR) of the Bank as on
 March 31, 2011 according to Basel I guideline is 13.17% as against the
 statutory requirement of 9%. Tier I CRAR constituted 10.60% while Tier
 II CRAR represented 2.57%.
 
 The Capital to Risk Weighted Assets Ratio(CRAR) of the Bank as on March
 31, 2011 according to Basel II guideline is 14.01%, as against the
 statutory requirement of 9%. Tier I CRAR constituted 11.27% while Tier
 II CRAR worked out to 2.74%.
 
 As per Reserve Bank of India guidelines, the Bank has migrated to new
 Capital Adequacy framework w.e.f. March 31, 2009.  The Bank has adopted
 Standardised Approach for Credit Risk, Standardised Duration Approach
 for Market Risk and Basic Indicator Approach for Operational Risk while
 computing the Capital requirement under Basel II guidelines.
 
 LISTING AGREEMENT WITH STOCK EXCHANGES
 
 The Banks shares continue to be listed on The Cochin Stock Exchange
 Ltd., The Bombay Stock Exchange Ltd., and The National Stock Exchange
 of India Ltd. The Bank confirms that it has paid the listing fees to
 all the Stock Exchanges for the year 2011-12.
 
 BUSINESS ACHIEVEMENTS
 
 The Bank could achieve a total gross business of Rs. 50380 Crore,
 consisting of total deposit of Rs. 29721 Crore and gross advances of
 Rs. 20659 Crore as on March 31, 2011 registering a growth of 29.24%
 over the previous year.
 
 In CASA segment, the Bank has achieved a year to year growth of 20%.
 
 During the year 2010-11, 7.51 Lakh new SB A/cs were opened, of which,
 2.82 Lakh accounts belong to students. This was specifically aimed at
 inculcating banking and savings habit among the younger generation.
 
 Deposits
 
 The Bank increased its total deposits to Rs. 29721 Crore from Rs.23012
 Crore last year, registering a growth of 29.15%.
 
 The break up of the deposits as on March 31, 2011 is as under:- 
 
                                           Amount   % to total 
                                   (Rs. in Crore)   Deposits
 
 Current Deposits                         1201.00         4.04
 
 Savings Deposits                         5203.00        17.51
 
 Term Deposits                           23317.00        78.45
 
 Total                                   29721.00       100.00
 
 Advances
 
 Total advances of the Bank registered a growth of 29.07%, to touch a
 gross level of Rs. 20,659 Crore. Total Priority sector advances have
 improved to Rs. 6,291.76 Crore, constituting 39.40 % of the Adjusted
 Net Bank Credit (ANBC) as at the end of the financial year. Exposure to
 agricultural sector amounted to Rs. 3,686.70 Crore, forming 23.09 % of
 ANBC as at the end of the financial year.
 
 Details of exposure under various sub-heads of the priority sector is
 furnished below :
 
                                         Amount (Rs. in Crore)
 
 Agriculture & Allied activities                       3686.70
 
 Small Enterprises                                     1265.75
 
 Other Priority Sector                                 1339.31
 
 Total Priority Sector                                 6291.76
 
 INVESTMENTS
 
 Indian economy has continued its broad based growth during the
 financial year 2010-11 registering an impressive GDP growth rate. But
 the inflationary pressures persisted both from domestic demand and
 higher global commodity prices on account of gradual global recovery
 from financial crisis witnessed in the past years. RBI has moved, in a
 calibrated manner, in the direction of normalizing the policy
 prescriptions. Repo and Reverse Repo rates were hiked 175 and 225 basis
 points respectively. SLR was reduced to 24% from 25% and CRR has been
 increased from 5.75% to 6.00%. The monetary policy initiatives were
 intended to moderate inflation by controlling demand pressures and
 inflationary expectations, creation of a macro environment conducive to
 sustainable growth, to generate liquidity environment consistent with
 more effective transmission of policy actions and to reduce the
 volatility of short-term rates in a narrower corridor. Liquidity in the
 system got tightened sporadically during the year under review,
 especially after the 3G / Broad band auctions held in June, 2010. The
 borrowing under Repo has occasionally crossed 1% of NDTL which was
 within the comfort level of RBI. The interest rates have risen due to
 the liquidity tightness and peaked in March 2011. This resulted in
 pushing up the cost of deposits.
 
 During the first half of the financial year Indian equity market
 witnessed a consolidation mode. In the second half of the financial
 year equity market has shown some volatility. The Banks gross
 investment portfolio has increased by 24.80% to Rs. 8941.06 Crore as
 against a deposit growth of 29.15% resulting in a more healthy
 investment deposit ratio of 30.08% against 31.13% on March 31, 2010.
 
 NON-PERFORMING ASSETS (NPA) MANAGEMENT
 
 During the year 2010-11, the Bank had taken focused steps for recovery
 of Non-performing Assets through recovery camps, issue of notice under
 Securities and Reconstruction of Financial Assets and Enforcement of
 Security Interest Act, 2002 (SARFAESI), One-time settlements, etc.
 
 As a result of the various initiatives taken, the Bank could recover
 NPAs to the tune of Rs. 167.24 Crore during the year against the target
 of Rs. 180 Crore. The Gross and Net NPAs of the Bank as on March 31,
 2011 were Rs. 230.34 Crore and Rs. 60.02 Crore against Rs. 211.00 Crore
 and Rs. 61.57 Crore respectively as on March 31, 2010.
 
 The Percentage of Gross NPA to Gross Advance came down from 1.32% as on
 March 31, 2010 to 1.11% as on March 31, 2011. Another encouraging
 achievement in NPA management was that the Bank could reduce the
 percentage of net NPA to net Advances from 0.39% to 0.29% as on March
 31, 2011, a level comparable with the best in the industry.
 
 INFORMATION TECHNOLOGY (IT) AND IT ENABLED SERVICES
 
 The Bank has been progressively introducing a host of products and
 services deploying the best technology available. Rapid advancement in
 Information Technology (IT) made a paradigm shift in the way business
 at large has been conducted and banking sector was also not an
 exception. The fierce competition being experienced in the banking
 horizon especially from foreign banks as well as new generation private
 sector banks drove the managements of old generation private sector
 banks and Public Sector Banks to adopt IT in the most effective and
 rewarding manner. SIBertech [Deployment of Core Banking Solution
 (CBS) through networking of branches] was one of the early adopted
 measures in this direction, by the Bank.
 
 The Bank has been ahead vis-a-vis other players to accomplish 100% CBS
 status as on March 31, 2007.
 
 Leveraging on the CBS platform, the Bank could introduce a host of IT
 enabled services such as Anywhere Banking, on line ATMs (VISA, MASTER
 and NFS), Net Banking, Mobile banking, E commerce, M Commerce, ASBA
 etc.
 
 Major IT initiatives during the year
 
 The nucleus of CBS (Core Banking Solution) which is the centralized
 repository of data/information commonly known as Data Center (DC) has
 been relocated to a new spacious location with most modern facilities
 and state-of-the-art technologies.  The new set up will be able to take
 care of the Banks business requirements in terms of IT for the next 10
 years, at least. The new DC is green-complied as well.
 
 ASBA (Application Supported by Blocked Accounts) has been introduced to
 enable application for primary market issues, by marking of lien on
 accounts, enabling the customer to manage their resources better with
 tangible gain of interest. VISA (Both global debit cum ATM card)
 operation was launched last year.  This is in addition to the tie-ups
 with Mastercard & NFS ATM networks. Remittance Automation Facility for
 instantaneous fund transfer from abroad was introduced to enable online
 real time remittances from middle-east. A major architectural change in
 network connectivity was also undertaken to ensure more uptime and
 network resiliency. Straight Through Processing (STP) for fund transfer
 using RTGS/NEFT and net banking has been introduced which ensures end
 to end automation of fund transfer from/to other banks without any
 manual intervention.
 
 Information System Security Awareness As a part of awareness programmes
 against the threats emanating from Phishing, Spoofing, and other kinds
 of E-threats details have been published in the Banks web site as well
 as net banking home page. Further, for educating customers and branches
 on the impact of E-Threats circulars/
 
 E Mails/customers meets/structured training sessions have been
 issued/organized. Such initiatives form part of continuing awareness
 programme of the Bank.
 
 The Banks web site contains guidance column for customers with regard
 to the safety measures to be undertaken to guard against the possible
 E-Threats. Mobile alerts are also being sent periodically to make
 customers vigilant about such eventualities.  The Bank has also
 subscribed to services of an industry expert agency in monitoring the
 web site and preventing it from being hacked.
 
 IT Training
 
 During the year, several IT Training programmes (both advanced and
 basic) in relevant areas were organized to keep the operating and other
 staff informed of the advancement and rapid changes in IT.
 
 RISK MANAGEMENT
 
 Risk is an integral part of the banking business and the Bank aims at
 delivering superior value to shareholders by achieving an appropriate
 trade-off between risk and return. Sound risk management and balancing
 risk-return trade-off are critical to a Banks success. Business and
 revenue growth have therefore to be weighed in the context of the risks
 embedded in the Banks business strategy. Of the various types of risks
 the Bank is exposed to, the most important are credit risk, market risk
 (which includes liquidity risk and price risk) and operational risk.
 The identification, measurement, monitoring and mitigation of risks,
 continued to be a key focus area for the Bank. The risk management
 strategy of the Bank is based on a clear understanding of various
 risks, disciplined risk assessment, risk measurement procedures and
 continuous monitoring for mitigation. The policies and procedures
 established for this purpose are continuously benchmarked with the best
 practices followed in the Industry.
 
 The Banks risk management structure is overseen by the Board of
 Directors. Appropriate policies to manage various types of risks are
 approved by Risk Management Committee (RMC), which provides strategic
 guidance while reviewing portfolio behavior. The senior level
 management committees like Credit Risk Management Committee (CRMC),
 Market Risk Management Committee (MRMC) and Operational Risk Management
 Committee (ORMC) develop the risk management policies and vet the risk
 limits. The Asset Liability Management Committee and Investment
 Committee ensure adherence to the implementation of the above risk
 management policies, develop Asset Liability Management Policy and
 Investment Policy within the above risk framework.
 
 Compliance with Basel II framework
 
 The Bank has migrated to Basel II norms during Financial Year
 
 2008-09. In tune with regulatory guidelines on Pillar I of Basel II
 norms, Bank has computed capital charge for credit risk as per the
 Standardized Approach, for market risk as per the Standardized Duration
 Method and for operational risk as per the Basic Indicator Approach. To
 address the issues of Pillar II, the Bank has implemented ICAAP
 (Internal Capital Adequacy Assessment Process) during the year
 integrating capital planning with budgetary planning and to capture
 residual risks which are not addressed in Pillar I like credit
 concentration risk, interest rate risk in the banking book, liquidity
 risk, earnings risk, strategic risk, reputation risk etc. Bank has
 adopted a common framework for additional disclosures under Pillar III
 for adhering to market discipline of Basel II guidelines. This requires
 the Bank to disclose its risk exposures, risk assessment processes and
 its capital adequacy to the market in a more consistent and
 comprehensive manner.
 
 INTERNATIONAL BANKING
 
 In its quest for providing quality and hassle free service to the NRI
 clientele, the Bank has introduced two new products. The Bank has
 successfully implemented online remittance facility with M/s. UAE
 Exchange Centre, Abu Dhabi on Real time basis.  This will ensure
 immediate credit to Banks customers, with a unique feature of
 informing the beneficiaries and remitter through SMS within 60 seconds
 of remittance, branded as SIB Flash.
 
 Another product branded SIB eazyRemit was launched, to provide online
 cross border remittance in USD that facilitates a remitter in US to
 transfer funds to India online, using the internet platform, at a
 nominal cost, in association with M/s. Bank of New York Mellon. This
 facility has been extended to other bank customers as well.
 
 The Bank has entered into MTSS sub-agency arrangement with M/s.
 Weizmann Forex Limited towards payment of inward remittances under
 Western Union Money transfer scheme.
 
 With an objective to provide remittance facilities to NRIs in the gulf,
 the Bank had entered into Speed Remittance arrangement (SIB Express)
 with 4 more Exchange Houses in the current fiscal viz. M/s Delma
 Exchange, AbuDhabi, M/s Muthoot Exchange, Dubai, M/s Alamoudi Exchange,
 Saudi Arabia and M/s Al Dar For Exchange Works, Doha, Qatar. At present
 the Bank is having inward remittance arrangement with 4 banks and 31
 Exchange Houses.
 
 The Bank continued providing managerial support to Hadi Express
 Exchange, UAE, with four branches. The Bank had also set up a stall in
 Global Village Dubai, in connection with Dubai Shopping Festival 2011.
 
 RBI has authorized the Bank as a nominated agency for import of gold.
 The Bank is on the verge of launching the product SIB
 
 Pure Gold. The product offers different denominations of pure gold
 coins, with a fineness of 999.9.
 
 To improve forex business turnover of the Bank, the Bank has received
 necessary approvals for upgrading 7 more branches to B category,
 bringing the total number of B category branches to 32.
 
 NRI PORTFOLIO
 
 The Bank has the unique distinction of opening the first exclusive NRI
 branch in Kerala and still occupies the prime position with 8 exclusive
 NRI branches in the state. The total NRI deposit of the Bank as on
 March 31, 2011 constitutes 19.50 % of the Banks total retail deposit.
 
 The NRI Division of the Bank has since been strengthened to provide
 dedicated service to the Banks NRI Customers. The Division is also
 offering WELCOME KIT-Centralized NRI Account Opening facility through
 Hadi Express Exchange to increase the customer base in UAE. The
 Division also extends support to the branches in their NRI related
 matters and closely monitor the growth of NRI business. NRI Newsletter,
 a quarterly publication from NRI Division continues to provide useful
 information to the Banks NRI Customers.
 
 TRAINING
 
 The Bank accords utmost importance to human resources development.
 Training programmes are conducted in SIB Staff Training College
 (SIBSTC), Thrissur and at 7 Regional Training Centers (RTCs) at ROs for
 enhancement of professional capabi- lities of the staff. The training
 programmes are designed to impart knowledge as well as catalyzing a
 positive attitudinal change in the participants. The improvements made
 in human resources has refected in enhancement of organizational
 productivity.  SIBSTC and the RTCs identify gaps in skill of the
 personnel and provide learning to them for qualitative improvement.
 During the year 2010-11, the Bank imparted training to 1272 officers,
 990 clerks and 285 sub staff in various aspects of banking operations.
 Thus, the Bank could provide training to a total of 2547 of its
 personnel, which is about 45 percent of total staff strength of 5619 as
 on March, 31 2011. This is in consonance with the Banks vision towards
 continuous up-gradation of skills to ensure that the staff members meet
 the rising expectations of customers and discharge services
 professionally covering the entire gamut of banking operations.
 
 MARKETING
 
 The Bank has embedded its marketing strategies to ensure all round
 business growth and to counter the competitiveness in the market. An
 array of products and services were introduced keeping in view
 customers preferences and as a result, the Bank was able to live up to
 their expectations. This exercise has helped the Bank to design each
 customer contact point as easy
 
 and result oriented as possible. The Bank has leveraged on the Core
 Banking platform to offer varied financial products and services in a
 seamless and effective manner.
 
 Any Branch Banking
 
 The Bank offers a wide range of SB & CD products with Any Branch
 Banking facility to suit the needs of various customer segments.
 Through Real Time Gross Settlement / National Electronic Fund Transfer
 (RTGS / NEFT), customers can transfer/ receive funds to/from accounts
 with any other bank in India, who are the members of this payment
 system. Customers can also send /receive funds to /from abroad through
 various online realtime remittance facilities provided by the Bank. The
 new products launched by the Bank such as SIB-Mahila, Youth Plus etc.
 caters to specific segments of the customer base. The products have
 been well received by the customers.
 
 Internet Banking
 
 SIBerNet - the internet banking service of the Bank, facilitates
 online and any-time banking transactions. During the year, the Bank had
 launched the facility of RTGS/NEFT for the Banks internet banking
 customers to transfer the funds to any other bank accounts in India. In
 addition to the existing arrangements with the three leading online
 payment aggregators viz., BillDesk, TechProcess and CCAvenues, the Bank
 has now made arrangements with M/s. Times Of Money Ltd. (TOML) and M/s.
 ATOM Technologies Ltd. to facilitate online transaction for the
 internet banking customers. During the year, Bank had also made
 arrangements with the temples like Attukal Bhagavathi temple,
 Trivandrum and Sree Padmanabha Swamy temple, Trivandrum, to facilitate
 online offerings/donations for the internet banking customers. This is
 in addition to the existing arrangement with Guruvayur Sree Krishna
 temple in Kerala.
 
 Mobile Banking
 
 Customers of the Bank enjoy the benefit of Mobile Banking Service
 wherein, transaction alerts are sent to the customers (including NRIs)
 on a real time basis, using SMS technology. Last year, the Bank had
 launched M-Commerce facility as a value added service in association
 with M/s. Paymate. M-commerce is an entirely new breed of secured
 payment channel, which ensures online and real time payments by debit
 to the customers bank account which is authenticated through the
 registered mobile phone number of the customer. Facilities like account
 based fund transfer, utility bill payments, online recharge etc.  are
 also made available using this facility. The Bank is in the final stage
 of implementing Interbank Mobile Payment Service (IMPS). IMPS offer an
 instant, 24X7, interbank electronic fund transfer service through
 mobile phones.
 
 THIRD PARTY PRODUCTS
 
 Depository Services
 
 The Bank offers Depository services for the benefit of its customers.
 Through this facility, customers can hold their securities in
 electronic form with Central Depository Services (India) Ltd. (CDSL).
 For e-trading, the Bank has launched SIBer Trade - the online trading
 facility to buy stocks and shares from Bombay Stock Exchange Ltd. (BSE)
 and National Stock Exchange of India Ltd. (NSE) through a tie-up
 arrangement with Geojit BNP Paribas Financial Services Ltd. During the
 year, SEBI has registered the Bank as Self Certified Syndicate Bank
 [SCSB] for accepting application under Application Supported by Blocked
 Amount (ASBA). ASBA enables the Banks customers to apply for IPO/FPO
 and rights issues by allowing a lien on the account instead of actual
 payment while applying. The Bank also plans to implement PIS (Portfolio
 Invest Scheme) service which will enable its NRI customers to directly
 invest in the secondary market.
 
 New Pension System
 
 The Bank was appointed as a Point of Presence to provide services to
 subscribers of New Pension System introduced by Pension Fund Regulatory
 and Development Authority (PFRDA).  Currently this service can be
 availed through 551 designated branches, which will be extended to all
 branches soon.
 
 PAN Application Servicing
 
 Based on the representations received from the customers, the Bank had
 made a direct arrangement with M/s. UTI Technology Services
 Ltd.(UTITSL) for servicing the PAN card applications.  This is in
 addition to the already launched KYC Certification services for the
 Mutual Fund Investors, in association with M/s. CDSL Ventures Ltd.
 (CVL).
 
 Mutual Funds
 
 Mutual Funds are one of the preferred investment options for all those
 who wish to avoid direct investment in stock markets, yet earn more
 than what traditional saving avenues offer. The bank is already having
 tie up with 14 leading mutual fund companies to offer variety of mutual
 fund products to the Banks customers.
 
 Insurance (Life/General/Health)
 
 Since June, 2009 the Bank has acted as a corporate agent of Life
 Insurance Corporation (LIC) of India for selling the life insurance
 products. The Bank is No. 1 among the bank channel partners of LIC in
 terms of growth of number of policies canvassed (67%) during the year
 as compared to the previous year.
 
 General Insurance products such as health policy packages and
 policies to protect the assets and goods against various perils are
 also made available to the customers. The Bank acts as a corporate
 agent for the distribution of insurance products of M/s. Bajaj Allianz
 General Insurance Company.
 
 The Bank has entered into an arrangement with M/s.  Cholamandalam MS
 General Insurance Company to offer Health Insurance coverage to the
 customers at competitive rates of premium and a very efficient after
 sales service. A discount of 5% was provided to the Banks shareholders
 availing the policy, and around 5% of such total policies canvassed by
 the Bank during last year, was from the shareholders.
 
 The Bank had also made arrangements with M/s. Kotak Mahindra Life
 Insurance Co. Ltd. to provide life insurance coverage for the Banks
 home loan borrowers under group insurance.
 
 Debit Cards
 
 The Bank has launched VISA International shopping cum debit card during
 the year. With this, the Banks customers can withdraw cash through
 ATMs of any bank in India and also across the globe wherever
 VISA/Master logo is displayed. In addition to the existing Maestro
 cards, the Bank had introduced three varieties of debit cards under
 VISA viz. Classic, Gold and Platinum which offers a wide variety of
 services like enhanced cash withdrawal limits, online transaction
 limits, POS transaction limits and so on.
 
 The Bank is in the final stages of deploying its own Point Of Sales
 (POS) terminals at various merchant locations who are maintaining their
 accounts with the Bank. The Bank is also launching travel cards in
 association with M/s. Travelex, which will be made available soon.
 
 VISIBILITY ENHANCEMENT PROGRAMMES
 
 The Bank has undertaken many promotional initiatives through print,
 audio and visual media during the year 2010-11. The advertisements
 concentrated in major cities like Bangalore, Delhi, Mumbai, Kolkata,
 Chennai and Hyderabad and has enhanced the visibility of the Bank at
 these centres.
 
 This year witnessed more outdoor campaigns like outdoor hoardings,
 exterior train branding, trolley advertisements etc.
 
 PERSONNEL
 
 The Bank is envisaging to have staff complement of 7500 employees on
 its rolls by March 31, 2013. To achieve this target, Bank has embarked
 upon recruitment drive to acquire manpower of required skills. The
 total number of employees as at the year end was 5619. This growth in
 personnel has been dovetailed with the business growth target of the
 Bank.
 
 Staff position
 
 As on March 31, 2011, the Bank had 5619 personnel on its rolls as
 against 5132 as on March 31, 2010. Cadre wise break up is as under:
 
 Designation                     Male        Female         Total
 
 Officers                        1813           675          2488
 
 Clerks                          1160          1092          2252
 
 Sub-staff                        596            21           617
 
                                 3569          1788          5357
 
 Part-time employees               98           164           262
 
 TOTAL STAFF                     3667          1952          5619
 
 Maintenance of staff records was streamlined under HRMSS (Human
 Resources Management System Software). The personnel data can be
 accessed by all controlling offices and various reports based on the
 data can be generated.
 
 Implementation of terms and conditions of National level bipartite
 settlement on Wage Revision and Pension
 
 The salary scales of employees and officers were revised in terms of
 the settlement with arrears w.e.f. November 1, 2007.  The Bank had made
 full provision for arrears of salary and hence there was no impact on
 account of its payment during the year.
 
 Another option for Pension
 
 Existing employees who were in the service of the Bank prior to
 September 29, 1995 and had opted for PF earlier were given another
 opportunity to join the Pension scheme subject to complying with
 certain terms and conditions. Majority of the employees exercised the
 option of the pension. Employees who had already retired were also
 given another option for pension.
 
 EMPLOYEE STOCK OPTION SCHEME (ESOS)
 
 During the financial year 2008-09, the Bank instituted an Employee
 Stock Option Scheme to enable its employees to be a partner in the
 future growth and financial success of the Bank. The Banks
 shareholders approved the plan on August 18, 2008 for the issuance of
 stock options to the employees.  Compensation and Remuneration
 Committee of the Board on November 21, 2009 has recommended to the
 Board to grant options at a discount of 10% on the closing price of the
 shares quoted on NSE on November 20, 2009. Under SIB ESOS 2008 (1st
 Tranche) the Bank granted 3,07,25,000 options to eligible employees.
 Further, Compensation and Remuneration Committee of the Board on
 October 21, 2010 has recommended to the Board to grant options at a
 discount of 10% on the
 
 closing price of the shares quoted on NSE on October 20, 2010.  Under
 SIB ESOS 2008 (2nd Tranche), the Bank granted 5,10,500 options to
 eligible employees. The total options granted under two phases of SIB
 ESOS 2008 works out to 2.76% of the paid up share capital of the Bank
 as at March 31, 2011. The scheme has generated intended motivation
 amongst the staff.
 
 With a view to maintaining highest standards of personal ethics, all
 the Directors of the Bank including the Chairman and Managing Director
 & CEO have voluntarily decided not to accept any stock options, though
 the shareholders of the Bank were gracious enough to permit grant of
 stock options to all the Directors of the Bank during the 80th Annual
 General Meeting.
 
 Exercise period of the Options
 
 The exercise period under SIB ESOS-2008 commences from the completion
 of 2 years from the date of grant of options and expires on completion
 of 1 year from the dates of vesting of options. Further details
 pertaining to Employee Stock Options has been incorporated in an
 annexure to this report.
 
 SIBLINK
 
 SIBLINK, Banks corporate in-house magazine, has been functioning as
 an internal PR tool educating and motivating the staff for better
 performance and is published every quarter.
 
 COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
 DIRECTORS) RULES, 1988
 
 The operations of the Bank are generally not energy intensive.
 However, the Bank has taken all possible measures to control and reduce
 consumption of energy. The Bank continues to undertake possible
 measures for innovation and absorption of technology in banking
 business.
 
 The Company, being a banking company and an authorized dealer in
 Foreign Exchange, has taken all possible steps to encourage export
 credit.
 
 PARTICULARS OF EMPLOYEES
 
 During the year there were no employees in receipt of remuneration
 covered by Section 217(2A) of the Companies Act, 1956, read with the
 Companies (Particulars of Employees) Rules, 1975, as amended vide GSR
 289 (E) dated March 31, 2011 [Companies (Particulars of Employees)
 Amendments Rules, 2011].
 
 DISCLOSURE IN RESPECT OF EXPENDITURE INCURRED ON PENSION FUND AND
 GRATUITY FUND LIABILITY
 
 During the year, the Bank had re-opened the pension option for those
 employees who had joined the Bank prior to 29th September, 1995 and had
 not earlier opted for the pension scheme. Consequently, 2217 employees
 had exercised their
 
 option for the pension scheme and the Bank had incurred an additional
 liability of Rs. 135.13 Crore. Further, during the year the limit of
 gratuity payable to the employees of the bank was also enhanced from
 Rs. 3.50 Lakh to Rs. 10.00 Lakh, pursuant to the amendment to the
 Payment of Gratuity Act, 1972. As a result, the gratuity liability of
 the Bank increased by Rs. 21.40 Crore. The additional cost of pension
 and gratuity to employees works out to Rs. 156.53 Crore.
 
 In compliance of provisions of the Accounting Standard (AS) 15, the
 entire amount of Rs. 156.53 Crore is required to be charged to the
 Profit and Loss account of the current year. However, in accordance
 with the guidelines issued by Reserve Bank of India vide reference
 number DBOD.BP.BC.80/21.04.018/2010- 11 dated February 9, 2011, and
 made applicable to the Bank vide DBOD No.BP.BC.15896/21.04.018/2010-11
 dated April 8, 2011, the Bank decided to amortise the amount of Rs.
 156.53 Crore over a period of five years. Accordingly, Rs. 31.31 Crore
 (representing one-fifth of Rs.156.53 Crore) has been charged to the
 profit and loss account of the current year. The residual amount of
 Rs.125.22 Crore had been carried forward for accounting in next four
 years. The liability arising on account of retired employees who
 exercised option for pension amounting to Rs. 3.88 Crore had been
 charged in full to the Profit and Loss Account of the current year.
 
 CORPORATE SOCIAL RESPONSIBILITY (CSR)
 
 The Banks CSR policy epitomizes active participation in the social and
 economic development of the society. The policy on Corporate Social
 Responsibility strictly conforms to the guidelines of RBI and Ministry
 of company affairs on CSR.
 
 The Bank necessarily focuses on major areas like Education, Health
 Care, Sustainable Livelihood, Infrastructure Development and Social
 Causes and a specific budget is allocated for such activities.
 
 Education
 
 The Bank has supported many low income family students with financial
 assistance and provided them with free uniform and books. The Bank also
 conducts various motivational camps as an effort to spark the desire in
 these students to learn and acquire knowledge.
 
 Healthcare
 
 With the objective of supporting marginalized people through helping
 them to meet their diverse needs in health care, the Bank has
 collaborated with various charitable and health care institutions. The
 Banks efforts included free eye test camps, free food distribution to
 the poor patients of Govt. health care centres and preventive health
 through awareness programmes.  The Bank has also associated with
 Lions-Divyakarunya Heart
 
 Project, named as Hridayathalam which offerered free open heart
 surgeries for 70 or more deserving patients including children
 suffering from serious heart ailments.
 
 Sustainable Development
 
 Sustainable development addresses the needs of the present without
 compromising the resources of future generations to meet their own
 needs. For this, it requires the balancing of environmental, social and
 economic demands. As a part of the Banks social obligation, it has
 partnered with Chethanalaya, a Delhi based NGO and ran a campaign in
 Delhi to bring awareness among the public about the need of
 environmental protection by avoiding the usage of plastic bags. The
 campaign has been much acclaimed by various national agencies as it
 focused on Go Green. The Bank is promoting energy saving concepts and
 projects generating electricity through wind mill plants etc.
 
 The Banks new corporate building has got 3 star rating from Bureau of
 Energy Effciency (BEE) and a 5 star rating is expected on completion
 of the entire renovation processes.  The Bank has been encouraging,
 financing and setting up of non-conventional energy generation units.
 The Bank has also concentrated on Infrastructure development and
 extends assistance for construction of toilet block and community hall.
 Rain water harvesting tanks of the Banks Head Office building of
 80,000 litres capacity is yet another example of eco-friendly processes
 adopted by the Bank.
 
 Social Causes
 
 The Bank has been supporting various charitable institutions in its
 efforts to bring awareness about AIDS, early detection of cancer and
 other chronic diseases. Campaigns against usage of drugs, alcohol and
 smoking are also given priority.
 
 Inclusive growth of all sections of the people is a pre-requisite for
 the country to achieve the status of a developed country by the year
 2020. Financial Inclusion (FI) is one of the major means to achieve all
 round growth. FI, inter-alia, aims at ensuring the availability of
 formal and basic banking services to all the households, including
 those residing in the un-banked/under banked areas. The Bank has been
 an early bird in adopting Financial Inclusion initiatives and it is now
 expanding its wings to uncovered areas. With eight decades of rich
 experience in personalized banking services the Bank has designed a
 simple, secure and smart banking product-FINS Card A/C(Financial
 Inclusion Smart Card Account) to achieve the goals of financial
 inclusion.
 
 Green Initiatives in Corporate Governance
 
 As a responsible corporate citizen, the Bank supports and pursues the
 Green Initiative of the Ministry of Corporate
 
 Affairs (MCA). In conformance with such initiatives, the Bank will
 effect electronic delivery of documents including the notice and
 explanatory statement of Annual General Meeting (AGM), Audited
 Financial Statements, Directors Report, Auditors Report etc. for the
 year ended March 31, 2011, to the email address which the Shareholders
 have previously registered with their Depository Participant (DP) as
 their valid email address. Investors desirous of refreshing / updating
 their email addresses are requested to do so immediately in their
 respective DP accounts. The email addresses indicated in respective DP
 accounts which will be periodically downloaded from NSDL / CDSL will be
 deemed to be their registered email address for serving notices /
 documents including those covered under Section 219 of the Companies
 Act, 1956.
 
 Emails are being sent to available email addresses to enable investors
 to indicate their choice in case they desire to receive printed copies
 of documents/notices/annual reports.  Shareholders holding shares in
 physical form desirous of availing electronic form of delivery of
 documents are requested to update their email addresses with our
 Registrar and Transfer Agents by a written request if they wish to
 avail this facility. A request format for registering e-mail ids with
 the Registrar is enclosed. Shareholders holding shares in demat segment
 are requested to inform their e-mail ids to their respective DPs.
 
 SIB STUDENTS ECONOMIC FORUM (SIBSEF)
 
 Students Economic Forum is a monthly publication from the SIB Staff
 Training College and it provides an analysis of contemporary themes
 relating to developments in economy, Banking and Finance. So far, 232
 themes have been published since the first publication which was
 launched in December 1991.  In response to the requests from readers
 and well wishers, the first 201 themes of this publication were
 compiled in 4 volumes and published. The objective of this venture is
 to kindle interest in economic affairs among the younger generation and
 also to empower the student community. The hard copies of the
 publication numbering 3000 are being sent to all the branches/ offices,
 reputed schools / colleges / academic institutions, RBI offices, other
 banks, government organizations and corporate offices. It has wide
 acceptance among students, bankers and academic community. The subjects
 discussed during the year 2010-11 include - RBI Annual Policy Statement
 2010-11, Sovereign Debt Crisis, Business of Financial Inclusion Part I
 & II, Base Rate – Basis for Lending Rates Part – I & II, Infrastructure
 Financing – Part I & II, Currency War / Competitive Devaluation, New
 Capital Framework for banks – Basel III – Part I & II, and Union Budget
 2011-12 – Growth with Fiscal Correction. The soft copy of this
 publication is being sent to all the Youth Plus account holders by
 e-mail and it is made available in the Banks website.
 
 FINANCIAL INCLUSION INITIATIVES
 
 As per the Financial Inclusion Plan of the Bank, 100 villages are to be
 covered under the project through BC model by the year ending March
 2013. As per the FIP implementation plan projections, the Bank had to
 cover 5 villages by March 31, 2011.  As on March 31, 2011, the Bank
 implemented the project in 7 villages. Meanwhile, various State Level
 Bankers Committees have allotted 39 villages to the Bank, having
 population above 2000 for Financial Inclusion to be covered by March
 2012.  These villages are attached to 23 branches and spread across 4
 States in the country – Kerala, Andhra Pradesh, Tamil Nadu and
 Chattisgarh. As on March 2011, the Bank has covered all the 3 villages
 allotted to the Bank in the States of Kerala and Andhra Pradesh. As a
 part of the implementation process, the Bank has provided onsite
 training to the branch officials as well as to the Business
 Correspondents appointed in the above 7 locations. On behalf of the 46
 participating member banks in FIP, IBA had launched a National Level
 Awareness Campaign on Financial Inclusion titled SWABHIMAAN on
 February 10, 2011. The Bank has already contributed its share to meet
 the expenditure involved.
 
 During the year ended March 31, 2011, the Bank opened 71,000 No frills
 A/cs through the branches, where there is no penalty for not
 maintaining the stipulated minimum balance of Rs. 10/-. In addition to
 this 2.72 Lakh of Students A/cs were also opened, where there is no
 penalty for non maintenance of the stipulated minimum balance of
 Rs.150/-. During the year 2010-2011, Bank could roll out the SmartCard
 based FI project on pilot basis in 7 villages. In addition to the 100
 villages to be covered under FIP through BC model, the Bank has
 committed to cover 10 urban locations through the BC model. Of this, 5
 locations will be covered by the year ending March 31, 2012.
 
 ANTI-MONEY LAUNDERING (AML)
 
 The Bank has accorded great importance to Anti-Money Laundering and the
 transactions of all the branches of the Bank have been provided AML
 software platform. The alerts generated from the AML software are
 monitored on a daily basis and suspicious transactions are reported to
 FIU-India.
 
 In line with the RBI Guidelines, the Bank has developed a culture of
 compliances of Know Your Customer norms.
 
 E-CIRCULAR
 
 The Bank has since migrated to issuance of e-circulars in place of
 manual circulars. All the circulars of the Bank are uploaded using the
 e-circular software. In e-circular, Banks policies, Guidelines and
 Forms are also uploaded so as to empower the branches with readily
 accessible pool of information/ guidelines.
 
 DIRECTORS
 
 Sri Paul Chalissery and Dr. N. J. Kurian who retired at the 82nd Annual
 General Meeting held on July 14, 2010 were re- appointed as Directors
 of the Bank. At the said meeting Sri Mohan E. Alapatt was appointed as
 Director of the Bank, liable to retire by rotation.
 
 Sri A. S. Narayanamoorthy, Dr. C. J. Jose and Sri Davy K.  Manavalan
 retired from the Board w.e.f. July 18, 2010, August 30, 2010 and March
 27, 2011 respectively. The Board places on record its appreciation for
 the valuable services rendered by them during their tenure as
 Directors.
 
 Sri K. Thomas Jacob was appointed as Additional Director by the Board
 of Directors at its meeting held on August 31, 2010.
 
 Sri H. Suresh Prabhu was appointed as Additional Director by the Board
 of Directors at its meeting held on December 1, 2010.
 
 Sri G. A. Shenai demitted his office as Part-time Non-executive
 Chairman and Director of the Bank after the closure of business hours
 on October 22, 2010 on completion of his term. The Board places on
 record its appreciation for the valuable services rendered by Sri G. A.
 Shenai during his term of office as Part- time Non-executive Chairman
 and Director of the Bank.
 
 Sri Amitabha Guha, former Dy. Managing Director of State Bank of India,
 was appointed as Additional Director of the Bank on August 31, 2010.
 With the Approval of Reserve Bank of India, he took charge as Part-time
 Non-executive Chairman of the Bank for a period of 3 years w.e.f.
 November 2, 2010.
 
 Pursuant to the provisions of Section 260 of the Companies Act, 1956,
 Sri K. Thomas Jacob and Sri H. Suresh Prabhu vacates their office at
 the ensuing Annual General Meeting.  Two members have expressed their
 intentions to propose Sri K. Thomas Jacob and Sri H. Suresh Prabhu as
 candidates to the office of a director of the Bank, and have given
 notices in writing along with the deposit amount of Rs. 500/- each, in
 terms of Section 257 of the Companies Act, 1956.
 
 In terms of the provisions of the Companies Act, 1956 and the Articles
 of Association of the Bank, Sri Jose Alapatt and Sri Mathew L. Chakola
 are the directors who retire by rotation at the ensuing Annual General
 Meeting, and being eligible for re-appointment, the Board recommends
 their re-appointment as the Directors of the Bank.
 
 AUDITORS
 
 The Statutory Central Auditors M/s Deloitte Haskins & Sells, Chartered
 Accountants, Chennai will retire at the ensuing Annual General Meeting.
 Having completed a term of four years of continuous audit, the said
 firm is not eligible for
 
 re-appointment. Therefore, the shareholders will have to appoint a new
 firm as Statutory Central Auditors for the audit of the Banks accounts
 for the year 2011-12. RBI has approved the appointment of M/s S R
 Batliboi & Associates, Chartered Accountants, Chennai. A resolution
 will be placed before you at the ensuing Annual General Meeting seeking
 approval for appointing M/s S R Batliboi & Associates as the Statutory
 Auditors of the Bank. The Board recommends the appointment of the said
 firm as the Auditors of the Bank for the Financial Year 2011-12.
 
 AUDIT AND INSPECTION
 
 Regular Inspection of the Banks branches is conducted at periodical
 intervals on the basis of the rating awarded to the branches.
 Concurrent audit at branches by qualified Chartered Accountants
 covering 56% of business of the Bank and concurrent audit of
 International Banking Division and Treasury Department by external
 auditors are also conducted. In addition to the above the Bank also
 conduct Stock Audit, Credit Audit, Information System Audit, Risk based
 Internal Audit, Revenue Audit to check income leakages, Surprise
 Inspection and exclusive Gold loan asset verification etc. at branches.
 Besides, all the branches are subjected to statutory audit on yearly
 basis.  In addition, RBI also conducts an Annual Financial inspection
 of the Bank. The Bank has also implemented online transaction analysis
 software to oversee the daily activities at branches.
 
 EXPLANATION FOR AUDITORS COMMENTS IN THE REPORT
 
 The Auditors Report for the year 2010-11 does not have any
 qualifications. Hence, no explanation is offered in this regard.
 
 CORPORATE GOVERNANCE
 
 A separate report on the status of implementation of Corporate
 Governance as required under Clause 49 of the Listing Agreement with
 Stock Exchanges, and a certificate from M/s Deloitte Haskins & Sells,
 Statutory Auditors of the Bank, are annexed to the Report.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 This has been dealt with in a separate section in the Annual Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirements of Section 217 (2AA) of the Companies Act,
 1956, the Board of Directors hereby declare that:
 
 1. In the preparation of annual accounts for the financial year ended
 March 31, 2011, the applicable accounting standards have been followed
 and proper explanation has
 
 been furnished to the extent of departures from those standards.
 
 2.  The Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the company at the end of the financial year 2010-11 and of the
 profit of the company for that period.
 
 3.  The Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 and Banking Regulation Act, 1949
 for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities.
 
 4.  The Directors have prepared the annual accounts for the financial
 year ended on March 31, 2011, on a going concern basis.
 
 ACKNOWLEDGEMENTS
 
 The Board of Directors places on record its gratitude to the Reserve
 Bank of India, Securities and Exchange Board of India, Government of
 India, Government of Kerala and all other state Governments where the
 Bank operates, other Government and Regulatory Authorities, including
 stock exchanges, where the Banks shares are listed and correspondent
 banks for their strong support and guidance, during the year. The Board
 also places on record its gratitude to the Banks shareholders and
 customers for their continued support, patronage and goodwill. The
 Board further places on record its appreciation for the valuable
 services rendered by M/s Deloitte Haskins & Sells, Statutory Auditors,
 during their tenure. The single most important pillar of any
 Institution is its personnel, more so in the case of a service entity
 like a bank. The Bank gladly acknowledges this fact and thank all of
 them for their diligence and loyalty towards the Bank. The Board
 expresses its sincere appreciation for the dedicated service rendered
 by employees of the Bank at all levels.
 
                                                By Order of the Board
 
                                                      (AMITABHA GUHA) 
                                                             CHAIRMAN
 
 Place: Thrissur 
 Date : May 21, 2011