MIRA INFORM REPORT

Report Date :

23.10.2008

IDENTIFICATION DETAILS

Name :	IDBI BANK LIMITED
Registered Office :	Chaturvedi Mansion, 26, Old Palasia, Agra Bombay Road, Indore – 452001, Madhya Pradesh
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	15.09.1994
Com. Reg. No.:	10-8624
CIN No.: [Company Identification No.]	L65925MP1994PLC008624
Legal Form :	It is a Public Limited Liability Bank owned by the Government of India. Shares of the Bank are traded on the Stock Exchanges.
Line of Business :	Providing Banking Services

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	Large
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed bank in private sector. The Bank is progressing very well. The Bank recently took-over The United Western Bank Limited. Payments are usually correct and as per commitments. The Bank can be considered good for any normal business dealings at usual trade terms and conditions. It can be considered as a promising business partner in medium to long – run.

LOCATIONS

Registered Office :	Chaturvedi Mansion, 26, Old Palasia, Agra Bombay Road, Indore – 452001, Madhya Pradesh, India
Tel. No.:	91-731-2556666
Fax No.:	91-731-2556666
E-Mail :	pro@idbi.co.in corporate_office@idbi-bank.com
Website :	http://www.idbibank.com
Head Office :	IDBI Tower, WTC Complex, Cuffe Parade, Mumbai - 400 005, Maharashtra
Tel. No.:	91-22-22189111/ 66553355
Fax No.:	91-22-22181294 / 5179/8137
E-Mail :	pro@idbi.co.in corporate_office@idbi-bank.com

DIRECTORS

Name :	Mr. V. P. Shetty
Designation :	Director
Name :	Mr. O. V. Bundellu
Designation :	Director
Name :	Mr. Jitender Balakrishnan
Designation :	Director
Name :	Mr. Vinod Rai
Designation :	Director
Name :	Dr. Ajay Dua
Designation :	Director
Name :	Mr. Analjit Singh
Designation :	Director
Name :	Ms. Lila Firoz Poonawalla
Designation :	Director
Name :	Mr. R. V. Gupta
Designation :	Director
Name :	Mr. K. Narasimha Murthy
Designation :	Director
Name :	Mr. H. L. Zutshi
Designation :	Director
Name :	Mr. A. Sakthivel
Designation :	Director
Name :	Dr. D. Veerendra Heggade
Designation :	Director
Name :	Mr. Ajay Shanka
Designation :	Director
Name :	Mr. Arun Ramnathan
Designation :	Director
Name :	Mr. Yogesh Agarwal
Designation :	Director

KEY EXECUTIVES

Principal Officers:	Mr. Shri G. M. Ramamurthy
	Mr. J.K. Ray
	Mr. R. K. Kapoor
	Mr. B.P. Mandal
	Mr. V. K. Saxena
	Mr. Pradip Roy
	Mr. C.P. Philip
	Mr. B.P. Singh
	Dr.T.K. Mukhopadhyay
	Mr. B. Ravindranath
	Mr. A.V. Rammurty
	Mr. O.K. Kambale
	Mr. S.N. Baheti
	Mr. Siby Antony
	Mr. S. Andi
	Mr. Balkrishan Batra
	Mr. S. Ananthakrishnan
	Mr. M. Chittaranjan Kumar
	Mr. T. R. Bajalia
	Mr. R.C. Razdan
	Mr. R. K. Bansal
	Mr. L.P. Aggarwal
	Mr. Prakash V. Naik
	Mr. G.V. Nageswara Rao
	Mr. Susheel Narain Kak
	Mr. Rajan Ghotgalkar
	Mr. Sanjay Sharma
	Mr. U. Venkataraman
	Mr. R. Narasimhan
	Mr. Sunil Aggarwal
	Capt.T. Venugopal
	Mr. R. Damodaran
	Mr. Iswar C. Agasti
	Mr. Akhauri Rajesh Sinha

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2008

Names of Shareholders	No. of Shares	Percentage of Holding
Government of India	381778000	52.68
Employees	1804610	0.25
Public	111389503	15.37
Hindu Undivided Families	2764691	0.38
Bodies Corporate	44947004	6.20
Institutions	115166564	15.89
Societies	28960	0.00
Trusts	452428	0.06
Insurance Companies	58916585	8.13
NRI's	5305805	0.73
Directors or relatives of directors	440	0.00
NSDL (Transit)	2177300	0.30
Grand Total	724731890	100.00

BUSINESS DETAILS

Line of Business :

Providing Banking Services

GENERAL INFORMATION

No. of Employees :	4548
Bankers :	Reserve Bank of India Central Office, NCOB, Shahid Bhagat Singh Road, Mumbai – 400 021, Maharashtra, India

Banking Relations :	Good
Auditors :
Name :	Suri and Company Chartered Accountants
Name :	Sorab S. Engineer and Company Chartered Accountants
Name :	Khimiji Kunwarji and Company Chartered Accountant
Name :	Suresh Chandra and Associates Chartered Accountant
Subsidiaries :	· IDBI Capital Market Services Limited · IDBI Homefinance Limited · IDBI Intech Limited · Small Industries Development Bank of India · IDBI Investment Management Company Limited

CAPITAL STRUCTURE

As on 31.03.2008

Authorised Capital :

No. of Shares	Type	Value	Amount
1250000000	Equity Shares	Rs. 10/- each	Rs. 12500.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
724763834	Equity Shares	Rs. 10/- each	Rs. 7247.638 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
LIABILITIES
Capital	7247.638	7243.541	7237.946
Reserves & Surplus	80955.013	75751.071	56473.885
Employees’ stock options [grants] outstanding	17.010	4.013	8.759
Deposits	729979.846	433540.414	260009.164
Borrowings	386125.531	424043.756	475302.057
Other Liabilities and Provisions	102618.888	97810.443	86615.999
GRAND TOTAL	1306943.926	1038393.238	885647.810
ASSETS
Cash & Balances with RBI	66948.348	54064.711	26800.949
Balances with Banks and money at Call & Short Notice	20639.371	15046.184	26828.865
Investments	328029.278	256753.119	253505.263
Advances	822126.886	624708.226	527390.678
Fixed Assets	27659.794	27783.665	8109.019
Other Assets	41540.249	60037.333	43015.036
GRAND TOTAL	1306943.926	1038393.238	885647.810

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		80208.411	63454.192	66611.677
Other Income		16354.672	10271.834	0.000
Total Income		96563.083	73726.026	66611.677
Net Profit for the period		7294.555	6303.094	5608.874
Profit / Loss for the period		13149.010	10307.103	0.000
IDBI EXIM Special Fund, Balance transferred		0.000	16.915	5608.874
Expenditures :
	Interest	73644.133	56874.900
	Operating Expenses	9587.824	7784.662	61002.803
	Provision and contingencies	6036.571	2763.370
Total Expenditure		89268.528	64722.932	61002.803

QUARTERLY RESULTS

PARTICULARS	30.06.2008 1^st Quarter
Sales Turnover	24176.400
Other Income	3214.800
Total Income	27391.200
Total Expenditure	2317.500
Operating Profit	25073.700
Interest	23256.100
Gross Profit	1817.600
Depreciation	0.000
Tax	220.000
Reported PAT	1597.600

KEY RATIOS

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
Credit Deposit Ratio	124.35	166.12	238.79
Investment Deposit Ratio	50.26	73.57	122.63
Cash Deposit Ratio	10.40	11.66	12.30
Interest Expended/Interest Earned	91.82	89.63	92.94
Other Income/Total Income	18.16	14.29	19.22
Operating Expense/Total Income	10.96	10.78	12.90
Interest Income/Total Funds	6.95	6.66	6.33
Interest Expended /Total Funds	6.38	5.97	5.88
Net Interest Income/Total Funds	0.57	0.69	0.45
Non Interest Income/Total Funds	1.54	1.11	1.51
Operating Expense/Total Income	0.93	0.84	1.01
Profit Before Provisions/Total Funds	1.18	0.79	0.94
Net Profit/Total Funds	0.63	0.66	0.66
Return On Net Worth(%)	11.19	7.37	9.12

LOCAL AGENCY FURTHER INFORMATION

History

A Development Financial Institution (DFI) transformed into a full-service commercial bank and named as Industrial Development Bank of India Limited (IDBI). It was incorporated as a wholly owned subsidiary of Reserve Bank of India (RBI) in the year of 1964. The bank helping to build a modern and industrially buoyant India and supporting the dreams of Corporate India to its fruition in every possible way for over 44 years and bank reaching out over a broader operating canvas as a new generation full service commercial bank IDBI focusing on industrial and economic development of the country and inclusive banking, pervasive growth and unbounded prosperity and Bank has been actively engaged in providing a major thrust to financing of Small and Medium Enterprises (SMEs). In 1976 IDBI came under the holding of Government of India (GOI) by the way of RBI's transfer. RBI surrendered its 100% stake to GOI . The Bank made its Initial Public Offer (IPO) in July, 1995, it brought down GOI holding to 72% and the post-capital restructuring to 58.1%. IDBI transferred its International Finance Division to Export-Import Bank of India in the year 1982.

 In 1993, IDBI desired to offer a broad range of financial products and services, hence it formed one wholly owned subsidiary company and named as IDBI Capital Market Services Limited (ICMS). It was a first step of the bank, followed by the bank entered into different areas. The Bank had set up an another one wholly owned subsidiary company formed to undertake Information Technology (IT) related activities of the organization in March 2000 namely IDBI Intech Limited (IIL). IDBI also decided to add one more wing in its business by entering into home loan segment, it has established a public limited company "IDBI Home finance Limited". In the same year, IDBI entered into a financial and technical collaboration agreement with Nepal Development Bank (NDB). In March 2001, the Bank incorporated IDBI Trusteeship Services to take over the entire debenture business and assist to the subscribers and issuers of debentures by the way of up-to-date information and efficient professional services. In March 2003, the Bank made an exit from its asset management activity by divesting its entire shareholding in IDBI Principal Asset Management company Limited, IDBI Principal Trustee Company Limited and all Trust Corpus rights of IDBI Mutual Fund in favour of its joint venture partner Principal Financial Services Inc. USA., with a view to concentrate on its core business activities. The Bank also divested its entire stake in Discount and Finance House of India Limited (DFHI) in favour of SBI. In September 2003, the Bank acquired the entire shareholding of Tata Finance Limited in Tata Home Finance Limited The company has since been renamed as IDBI Home Finance Limited (IHFL). In October 2004, IDBI was transformed into a banking company to undertake all kind of banking activities while continuing to play its secular Development Financial Institution role. To reflect this, IDBI's name was changed as Industrial Development Bank of India Limited  

In 2005, IDBI Limited merged its banking subsidiary 'IDBI Bank' with itself, IDBI is now a universal bank. In October 2006, the Bank merged the erstwhile United Western Bank Limited (UWB) with itself as a part of the inorganic growth strategy and IDBI Bank had tied up with MITCON Consultancy Services Limited of Pune for carbon credit. During the year 2006 , IDBI Gilts Limited a wholly-owned subsidiary was incorporated to undertake Primary Dealership (PD) business.  

The Bank won the coveted "Outstanding Achiever of the Year Award-2006" under both Corporate and Individual categories at the Indian Banks' Association (IBA) Awards 2006 organized by IBA and Trade Fares and Conferences International (TFCI) . It was also awarded the Special Award for "Best Internet Bank for Corporate Customers" and for the "IT Team of the Year" by Institute For Development and Research in Banking Technology (IDRBT) in the same year and the RBI coffered the 'Bilingual House Magazine' Award for the Bank's house journal 'Shree Vayam'. As of 2007, the Bank has totally 432 branches, 18 extension counters and 523 ATMs spread across 255 cities, reflects its effort to spread its wings across the country.  

The Bank has entered into fourth tie-up for trading in carbon credits with Sumitomo of Japan as on July 2007. Under this arrangement, companies could get single-point assistance pertaining to origination and implementation of CDM projects, as well as advisory services on generation and trading of carbon emission reductions (CERs). As of April 2008 IDBI Fortis launched Life insurance business through joint venture with Federal Bank and Fortis NV. IDBI Bank will set up a mutual fund subsidiary with IDBI Capital markets, its wholly-owned subsidiary, after life insurance venture gets off the ground. The bank will have a 65 per cent stake in the asset management company (AMC) with IDBI Capital holding the remaining share. The banks odyssey has just begun. In the quest for inclusive banking, pervasive growth and unbounded prosperity.

Profit and Appropriations: 

During the year April 2007-March 2008, gross income earned by the Bank amounted to Rs. 96563 Millions, comprising interest income of Rs. 80208 Millions and other income of Rs. 16355 Millions. Provisions during the period amounted to Rs. 6036 Millions comprising Rs. 5104 Millions for bad and doubtful debts and investments and Rs. 932 Millions towards tax. After netting the provisions of Rs. 5104 Millions for bad and doubtful debts and investments, net income was at Rs. 91459 Millions. Total expenditure of the Bank, during the year, excluding provisions and contingencies, stood at Rs. 83232 Millions consisting of Rs. 73644 Millions of interest expenses and Rs. 9588 Millions of operational expenses. 

The Bank's working during the year resulted in a Profit Before Tax (PBT) of Rs. 8227 Millions. After making a provision of Rs. 932 Millions towards taxation, Profit After Tax (PAT) amounted to Rs. 7295 Millions. Appropriation of PAT as approved by the Board of Directors is given in Table 2. For each share of face value of Rs. 10, Earning Per Share (EPS) during the year stood at Rs. 10.1 and Book Value Per Share stood it Rs. 93.4 as at end-March, 2008. 

Organisational Structure: 

As an attestation of its customer-centric approach, the Bank has effected enabling modifications in its organizational structure to make it adequately responsive to the financial requirements and goals of clients. The earlier SBU-based operating model has been replaced with more effective and efficient 'customer-focused vertical model' capable of delivering world class products and services. Entire spectrum of the Bank's business is now covered by customeroriented verticals viz. infrastructure and syndication, large corporate, mid-corporate, personal banking, small and medium enterprises, agri-business, international banking, treasury and transaction banking. 

The Bank has developed an innovative credit delivery model for SMEs and has gradually been building up City SME Centres (CSCs). The CSCs would provide support in terms of loan processing of the proposals as also would undertake back office related activities to buttress the credit delivery mechanism. The dedicated SME Relationship Managers at branches would provide a single customer touch point to provide whole range of banking services with regard to SMEs. 

Organisational restructuring during the current year also dovetails much-awaited solutions to define seniority across the merged entities. With this the Bank has attained complete E organizational integration of all functional/areas. 

During the period the Bank increased its branch network by opening 67 more branches. In addition, a complete review was undertaken with regard to relocation of branches to more potential areas and 32 branches were effectively shifted to newelocations. During the financial year 2008-09, the Bank has an ambitious plan for expansion of the network including its ATM network. 

Capital Adequacy: 

Capital Adequacy Ratio (CAR) of the Bank continued to remain sound. Against the stipulated RBI norm of 9%, the. Bank's CAR as at end-March 2008 worked out to I 1.950/.The Tier-I CAR also was at a high level of 7.42%. Though the current level of capital is adequate for the present business requirements, the Bank would continue to ensure that capital is adequate and supportive to its long-term business plans and is deployed effectively to optimize its cost. The Bank has also undertaken proactive measures to ensure compliance with the Basel-II framework. 

REAL SECTOR: 

Gross Domestic Product (GDP): 

The Indian economy continued to exhibit reasonably strong growth momentum during 2007-08, despite the global slowdown. According to revised estimates of Central Statistical Organisation (CSO), the economy recorded a real GDP growth of 9.0% during 2007-08 as compared to 9.6% during 2006-07. The growth in Industry at 8.1% and Services at 10.7% sectors continued to be the prime drivers of growth in overall GDR The growth In Agriculture Improved to 4.5% during 2007-08 as against 3.8% during the previous year. A number of enabling measures, coupled with the debt relief package, In the Union Budget 2008-09 augur well for the revitallsation of this sector which would have positive Impact for the economy as a whole. 

Investment and Industrial Scenario: 

A notable contributory feature of observed buoyancy in GDP growth in recent years has been a sharply rising trend in gross domestic Investment and saving. This was sustained during 2006-07 also, with Gross Domestic Saving recording 34.8% of GDP, up from 34.3% recorded in 2005-06. Both private and public saving contributed to higher overall saving during 2006-07. This, enabled Gross Domestic Capital Formation (GDCF) at current market prices to move up to 35.9% of GDP in 2006-07, as compared to 35.5% In the Immediate preceding year. The acceleration In-domestic investment and saving rates is expected to drive growth and provide the resources for meeting the 9% (average) growth target of the 11th Five Year Plan (2007-12). 

Performance of Subsidiary Organizations: 

IDBI Capital Market Services Limited: 

IDBI Capital Market Services Limited (IDBI Capital), a wholly-owned subsidiary of the Bank, offers a full suite of financial products and services to institutional, corporate and retail clients. Its businesses include Stock Broking, Distribution of Financial Products, Merchant Banking, Corporate Advisory Services, Debt arranging and underwriting, Portfolio Management of Pension / PF Funds and Research services. 

IDBI Capital has established itself in the Investment Banking business having completed 13 issues apart from several Corporate Advisory assignments in project appraisal, shares valuation, loan syndication, debt restructuring, etc. It has also made initial forays into Private Equity investment. IDBI Capital continues to remain a major player in the PF / Pension Fund Management with assets under management of over Rs. 82500 Millions. Two years back, IDBI Capital launched its online broking platform www.idbipaisabuilderin to help retail investors' invest in Equity (BSE / NSE/FandO), Mutual Funds (15) and IPOs with information / analysis / recommendations provided therein. 

To enhance its retail reach across the country, it has tied up with the Bank as also with other banks viz. Punjab National Bank, Bank of Rajasthan, Union Bank of India, Karur Vysya Bank and Oriental Bank of Commerce for marketing its investment portal. This would help build an extensive retail network for the Company. 

The Equity broking segment has scaled up its operations enhancing turnover of cash segment by 40% over the previous year. The FandO segment market has also been launched during this fiscal.  

In accordance with the revised RBI guidelines, the primary dealing business was relocated to IDBI's new subsidiary, IDBI Gilts Limited. That would enable IDBI Capital to concentrate on financial services (institutional and retail) and equity-oriented businesses. 

Future Outlook: 

The Indian economy exhibited strong resilience to global happenings, which indeed would have dampening effect on the GDP growth. The improved domestic investment, backed predominantly by domestic savings, is the single most important indicator, which augurs well for the continuity of the growth momentum. Buoyancy in the manufacturing sector and the services sector is expected to continue and would provide predominant impetus towards economic growth. The proposals in the Union Budget 2008-09 for effective reduction of the tax burden under personal income and excise is further expected to stimulate both private and government consumption. Inflationary pressure in the recent past have slightly altered general expectations about the economy. The prices of manufactured products are expected to harden largely tracking the lagged effects of increases in prices of basic products like food, energy and metals. 

RBI policies, are also geared to support the growth momentum by maintaining macroeconomic and financial stability and ensuring that there is smooth flow of credit to the productive sectors of the economy. Given the strong fundamentals of the Indian economy and the successful policies of RBI, there does not appear to be any major concern either for banks or for financial stability. 

Though the economy is insulated from regional slowdown, there are visible dark clouds on the horizon. Global turbulence emanated from sub-prime crisis, and the increased prices may stymie the growth agenda. A slew of reform measures and ramping up of infrastructure would indeed be required to achieve the growth expectations. The Government has appropriately assigned prime importance for the planned development of key infrastructure and implementation of flagship program 'Bharat Nirman'. As the Bank is well poised and has put in place adequate systems, going ahead the Bank would largely benefit from the emerging business opportunities. 

Retail Finance: 

The upsurge in the Indian retail sector continued and the segment witnessed robust growth during the large part of the fiscal. The growth trajectory, though flattened due to international developments, could gather valuable space in business matrix. Increased disposable income, wider product range and improved credit delivery channels including the technological support enabled the retail sector to gain to a great extent. The Bank in its endeavor to benefit from the retail buoyancy, strategically emphasized to design innovative products and enlarge client base to increase its share, with improved yield. 

The Bank in its stint to catering to the diversified needs of the retail customers, offers an array of innovative Retail Asset products, both Secured (Housing Loan, Mortgage Loan, Loan against Securities) and Unsecured (Personal Loans, Educational Loans and Overdraft to Merchant Establishments). During the year, the Bank increased its bouquet of retail products by launching Loan against Rent Receivables, Loan against Commercial Property, Reverse Mortgage Loan, Holiday Travel Loan and Loan to the Staff of IDBI-Assisted Units. During the year, the Bank successfully participated in various Property Exhibitions at major centers such as Mumbai, Vashi, Thane, Pune, Kolkata, Chennai, Delhi, Jaipur, Chandigarh and Hyderabad that gave a significant mileage to the Home Loan products of the Bank. The coverage of the Bank's Education Loan Scheme has been extended by launching On-line Education Loan during the year. The Bank now has Retail Asset Centres across 30 cities. Retail Asset Centres at 24 more centres are proposed during the FY 2008-09. With a view to enhancing the geographic spread, product acceptance, operational efficiency and credit expertise, all the branches of the Bank have started lending retail asset products. 

The Bank is continuously making innovation to offer value-added services to its esteemed clients and towards this endeavour, the Bank has formalized tie-ups with IDBI Capital Market Services Limited, a 100% subsidiary of the Bank, and with Motilal Oswal Securities Limited to offer state-of-the-art internet-based trading facility in Equities, Futures and Options markets. The clients can also purchase and redeem units of Mutual Funds and can subscribe to Initial Public Offerings of various corporates / institutions using this facility. This unique facility provides total convenience as all the above services can be availed with the click of a mouse and the complete process is seamless. The Bank has started selling life insurance products of IDBI Fortis Life Insurance Company Limited under the Bancassurance arrangement. 

The Bank is also giving a thrust for expansion of its ATM network with the number of installed ATMs going up from 520 as on March 31, 2007 to 755 as on March 31, 2008. The momentum is expected to continue during the current financial year and the Bank is poised to have a network of about 1200 ATMs by the end of March, 2009. 

The Bank has always been at the forefront of promoting Alternate Channels for delivery of Banking products and services. As a part of these efforts, the Bank, during the financial year 2007-08, launched the MasterCard Debit Card, relaunched the cash card product and upgraded its Net Banking architecture thereby enhancing customer experience. 

Corporate Finance: 

The Bank provides project finance, both in rupee and foreign currencies, to boost capital formation and infrastructure development in the country. In addition to assistance for greenfield projects, the Bank also funds projects for expansion, diversification and modernization. In project appraisal and monitoring, the Bank follows global best practices and in, the process has created sizeable and well-diversified assets portfolio. In the recent years, the Bank has been increasingly providing non-project finance with short and medium term maturities in the form of Short-term Loan,Working Capital and Treasury Products to meet the ongoing requirement of corporates. 

The Bank offers a wide array of corporate banking products under various business segments such as Deposits, Cash Management Services, Central and State Government agency business (both direct and indirect taxes),Trade Finance and Treasury Products. 

In respect of trade services, the Bank has set up dedicated trade finance sales teams for product offerings at key locations and has been pursuing focused and specialized approach in this business segment. Trade Finance operations of the Bank are available through designated branches, which provide Trade Finance Products viz., Letters of Credit, Bank Guarantees, Collections, Remittances, Forward Contracts, Packing Credit, Post Shipment Finance, Maturity Factoring, Invoice Discounting and Trade Advisory Services. 

The Cash Management Services of the Bank have bagged several prestigious debt servicing, redemption and dividend deals from leading corporates. The Bank is the first bank to offer payment facility of direct taxes through Internet and is also the first bank to offer online payment of Central Excise Duty and Service Tax through the Internet. The Bank has the mandate to collect direct taxes at several branches and extension counters across the country and also to collect Excise Duty and Service Tax at select branches. Additionally, the Bank has the mandate to collect sales tax and stamp duty for certain State Governments and import/export licence fees over the Internet. 

With the major initiatives by Syndication, Structuring and Advisory Department (SSAD), the Bank has emerged as one of the leading players in Debt Syndication and Advisory arena. With a view to churn the Bank's loan portfolio as also to generate fee-based income, SSAD started Securitisation activities during the financial year 2007-08 and earned the fame of being a leading public sector bank in the field of Securitisation. 

Treasury Operations: 

The new state-of-the-art Treasury at the Bank's Head Office became operational during the financial year. With this, all the segments viz., Money Market, Foreign Exchange, Derivatives, Equity and Liquidity Management were placed under one roof for better management of funds and enhanced customer service. With the single integrated IT platform, online treasury services were extended to more branches. 

The Bank's Treasury successfully managed to keep pace with the balance sheet growth by adopting proactive strategies to manage the liquidity requirements of the Bank. Liquidity was well managed by raising resources to meet the maturing bonds as well as the disbursements by using judicious mix of domestic and foreign currency liabilities. 

The Bank also used instruments of varying maturities to manage the Asset Liability mismatch as well as to meet the liquidity requirements. These instruments included Certificate of Deposits, Inter Bank borrowing, Bonds, Refinance from various institutions, lines of credit, bulk deposits and foreign currency borrowings. 

Treasury invested in Central and State Government securities to progressively build the SLR portfolio for the Bank. The volatility in the domestic interest rate market was effectively used to optimize the yield on investments. Further, the SLR portfolio was also used sporadically to manage the short term liquidity mismatches. 

The year witnessed weakness in USD against INR and all other major currencies. Although USD/INR stabilized around 40.00 during the fourth quarter, the Dollar's slide against other major currencies like EUR, CHF, JPY, and CAD continued. USD fell to its lowest against EUR and CHF; it also touched multi-year low against GBP and JPY. 

The Bank provided various types of customized solutions to cater to customers in their foreign exchange requirements, hedging of their interest rate risks, exchange rate risks and to manage the cash flows. In the volatile currency market, the Bank's Treasury provided competitive rates for various requirements of corporate clients for their foreign exchange transactions, thereby ensuring a quantum jump in customer volumes as well as revenues. The Bank's Treasury has a full-fledged marketing team, which interacts constantly with the corporate clients and proactively provides them with views on various currencies to enable them efficiently manage the volatilities in the currency markets. 

In the Derivative segment of the market, the Bank sourced new clients and broad-based the product offering not only in Rupee Interest Rate Derivatives but also in the Foreign Currency interest rates. The weakness in the US Dollar provided good business opportunity for improving the derivative business. The Derivative structures were offered within the Regulatory guidelines so that clients manage the interest rate and currency exposure in the best possible way. With the combination of the interest rate as well as currency structures, the Bank's Treasury helped the clients to manage the interest rate as well as the foreign currency risks. Option structures were also offered to the clients after due assessment and understanding of the clients requirements. 

The Bank is in the process of setting up a system to offer the 'on-line foreign exchange dealing platform' to corporate clients. This will enable the Bank to further enhance business volumes and also widen the client base. 

New Business Initiatives: 

The Bank, during the financial year, floated a few innovative products, broadly designed in accordance with the requirements and feedback of its clients. Lending produc is like loans against commercial property, loans against loan receivables and reverse mortgage loans were introduced and marketed effectively through our branches. Facility and system revamping was carried out to provide education loans online. On the liability side, niche saving bank accounts went live for women. The Bank also introduced 3-in savings-cum-demat accounts with trading facility during the year. Financial inclusion was taken a step ahead with provision of mobile van banking amenities at Satara. 

SME segment is emerging as one of the key growth engines of the Indian economy. The Bank has been designing customized products for SMEs from time-to-time and accordingly launched special current account for hosiery industry during the financial year. In building up valuable relationships in this area, the Bank has set up City SME Centres (CSCs) keeping in mind the specific requirements of SME business. 

In order to ensure customer delight, a regional processing centre was opened at Kolkata. This would consequently reduce delivery time for customers in the eastern part of the country and would also soften the associated service cost. 

Credit Risk: 

The Bank recognises the significance of credit risk in banking operations and has put in place a Credit Risk Management System with appropriate risk management skill sets, which provides not only a competitive advantage in the market place, but also positions the Bank to capitalise on the opportunities for growth. The Bank follows a proactive Credit Policy, which is regularly reviewed and updated to take into account the developments in the credit scenario. Best practices are employed through appropriate credit delivery processes and portfolio and account monitoring. Sector exposures and target businesses are monitored regularly, especially for exposure to sensitive sectors. 

Under the parallel run of the new capital adequacy framework (Basel-II), the Bank has adopted the Standardised Approach for credit risk. The Bank is in the process of modernising and upgrading its Credit Risk Management System in step with the market developments to meet Basel-II requirements. 

Market Risk: 

The Bank addresses all forms of market risks, viz., liquidity risk, interest rate risk and forex risk through a well-defined set of policies and processes. Separate treatment is given to the management of risks in trading book and banking book recognising their differential impact on the balance sheet. The trading book risks, which are more susceptible to market movements, are continuously measured and managed by marking the positions to the prevalent market rates. In order to assess the likely impact of market movements, periodic analysis of the trading book is carried out on the basis of positions based on changes in market rates, past trends, stress tests through rate shocks, scenario analysis, etc. Market risks in the banking book are analysed and managed through liquidity and interest rate sensitivity, gap, duration and scenario analysis. The overall positions and functions of market risks are run under the policy framework defined in Asset Liability Management Policy, Market Risk Policy and Investment Policy. 

In order to implement the Basel-II norms in respect of market risk, the Bank is upgrading its software capability to assess the liquidity and interest rate risks under various scenarios, including stress testing. The Bank is also implementing Value at Risk (Valk) model for the entire Treasury trading portfolio with a view to assessing capital requirement for market risks based on advanced approach under Basel-II. Also, the capital charge for interest rate risk in banking book will be fine-tuned through duration gap analysis. 

Operational Risk: 

The Bank measures, monitors and controls operational risk through a software system 'ORBIT' (Operational Risk Business Intelligence Tool). Branches are being rated for their operational risk profile through an embedded branch-rating model. The Bank has put in place a policy for Know The Customer' (KYC) and Anti-Money Laundering' (AML) requirements. As a measure of Operational Risk Management, the Bank also conducts appropriate training programmes to sensitise line managers across the Bank on operational risk inherent in each function. 

As a part of implementation of Basel-I guidelines, the Bank has commenced computation of the capital requirements for operational risk under the Basic Indicator Approach (BIA). Also, steps have been initiated to upgrade the existing system and practices to migrate to Advanced Measurement Approach. 

Recognising the importance of Business Continuity Planning (BCP) for minimizing the, adverse effects of business disruption and system failure, the Bank has put in place a Board-approved broad framework of BCP In addition, in order to provide continued and uninterrupted customer service even during natural disasters, a Disaster Recovery Site has been installed and Disaster Recovery (DR) drill exercises are conducted periodically to test the efficacy of the DR Plan. 

AS PER WEBSITE:

IDBI Bank Q1 2009 net up 4% to Rs. 1600 Millions

Highlights of Q1 FY09 financial results vis-à-vis Q1 FY08 (June 30, 2008)

· Net profit up 4% to Rs. 1600 Millions (from Rs.1530 Millions)

· Business up 42% to Rs. 1508320 Millions

· Deposits increased by 56% to Rs. 727170 Millions

· Advances up by 31% to Rs. 781150 Millions

· Total assets grew by 24% to Rs. 1304100 Millions

Mumbai, July 22, 2008: The Board of Directors of IDBI Bank Limited (IDBI Bank) met in Mumbai today to consider the financial results for the quarter ended June 30, 2008. The results have been reviewed by the Statutory Auditors.

Working results:

(Rs. Millions)

	Q1 2008-09	Q1 2007-08	FY 2007-08
Total Income	27400	21930	96560
Interest Income	24180	17930	80210
Non-Interest Income	3220	4000	16350
Total Expenses	25380	19360	83230
Interest expenses	23260	17300	73640
Operating expenses	2120	2060	9590
Operating Profit	2020	2570	13330
Provisions (net)	420	1040	6040
Net Profit	1600	1530	7290

Profitability:

IDBI Bank reported a net profit of Rs. 1600 Millions for the quarter ended June 30, 2008, as against Rs. 1530 Millions in the corresponding quarter ended June 30, 2007. This amounts to an increase in net profit by 4% for the quarter compared to corresponding period last year.

Business:
As of June 30, 2008, IDBI Bank’s total business (deposits and advances) stood at Rs 1508320 Millions as against Rs 1065290 Millions as of June 30, 2007, registering a growth of 42%.

Deposits increased by a robust 56% year-on-year (y-o-y) to Rs. 727170 Millions from Rs. 467570 Millions outstanding as of June 30, 2007. Advances also increased by 31% to Rs. 781150 Millions y-o-y, as compared to   Rs. 597720 Millions as at end-June, 2007.

Advances also increased by 31% to Rs. 781150 Millions y-o-y, as compared to   Rs. 597720 Millions as at end-June, 2007.

As of June 30, 2008, aggregate assets stood at Rs. 1304100 Millions as against Rs. 1051470 Millions as on June 30, 2007, registering a growth of 24%.

Non Performing Assets (NPAs

The gross NPAs and net NPAs as on June 30, 2008 stood at Rs. 15780 millions (1.98%) and Rs. 10710 Millions (1.36%) respectively as against Rs. 12940 Millions  (2.06%) and Rs. 7140 Millions  (1.15%) as on June 30,2007.

CAR:
IDBI Bank continued to maintain a sound capital base as indicated by its Capital Adequacy Ratio (CAR). As against the stipulated RBI norm of 9%, the Bank's CAR stood at 12.02% (Tier-I: 7.47%) as of June 30, 2008.

Significant developments during April - June 2008

• Hon'ble Union Finance Minister Shri P. Chidambaram inaugurated the 500th branch of IDBI Bank at Karaikudi (Sivaganga District) in Tamil Nadu on May 25, 2008. The occasion also marked the inauguration of the 800th ATM of the Bank.
• The Bank has set up value added service in the form of RTGS facility. It will now be in a position to give the name of remitter along with the UTR (Unique Transaction Reference) Number in the account statement of the customers for all inward RTGS transactions. This will enable customers to know the remitter details of the inward RTGS entries and facilitate better daily funds management.
• On June 6, 2008, Shri S Jaipal Reddy, Hon'ble Union Minister for Urban Development, Government of India, launched through its website (www.egazette.nic.in) the e-Gazette- an electronic form of all Gazette notifications - as part of the Ministry of Urban Development (MoUD)'s initiative to reach out instantaneously to the users in the Corporate sector, businesses, legal fraternity, State Govts, NGOs, academicians, individuals etc. IDBI Bank, as accredited banker to the Department of Publication, MoUD, provides the payment gateway to download all such Gazette notifications for all corporates, organizations and individuals having account with IDBI Bank.
• The Union Government has announced Agricultural Debt Waiver and Debt Relief Scheme, 2008 in the recent past to provide debt waiver/ relief to marginal, small and other farmers. IDBI Bank has implemented the Agricultural Debt Waiver and Debt Relief Scheme, 2008, announced by the Union Government.

Un-audited Financial Results for the Quarter Ended June 30, 2008

(Rs. Millions)

		Quarter Ended		Year Ended
		June 30, 2008	June 30, 2007	March 31, 2008
		(Reviewed)	(Reviewed)	(Audited)
1.	Interest earned (a)+(b)+(c)+(d)	24176.400	17927.900	80208.400
	(a) Interest/discount on advances/bills	19095.600	14687.200	65087.400
	(b) Income on investments	4842.300	2998.000	13707.500
	(c) Interest on balances with Reserve Bank of India and other inter bank funds	215.100	183.000	464.800
	(d) Others	23.400	59.700	948.700
2	Other Income	3214.800	4002.100	16354.700
3	Total Income (1+2)	27391.200	21930.000	96563.100
4	Interest Expended	23256.100	17299.100	73644.100
5	Operating Expenses (i)+(ii)+(iii)	2118.700	2057.400	9587.900
	(i) Employees cost	848.500	790.500	3846.100
	(ii) Other operating expenses	1660.800	1266.900	5741.800
	(iii) Prior period adjustments	(390.600)	-	-
6	Total Expenditure ((4)+(5) excluding provisions and contingencies)	25374.800	19356.500	83232.000
7	Operating profit before Provisions and Contingencies (3-6)	2016.400	2573.500	13331.100
8	Provisions (other than tax)and Contingencies (Net)	198.800	857.300	5104.100
9	Exceptional Items	-	-	-
10	Profit (+)/Loss(-) from Ordinary Activities before tax (7-8-9)	1817.600	1716.200	8227.000
11	Tax expense	220.000	185.000	932.500
12	Net Profit (+) /Loss(-) for the period ((10-11))	1597.600	1531.200	7294.500
13	Extraordinary items (net of tax expense)	-	-	-
14	Net Profit(+)/Loss(-) for the period((12-13))	1597.600	1531.200	7294.500
15	Paid-up equity share capital (Face Value Rs.10)	7247.600	7244.900	7247.600
16	Reserves excluding Revaluation Reserves (as per balance sheet of previous accounting year)	-	-	60420.600
17	Analytical Ratios
	(i) Percentage of shares held by GOI	52.68	52.71	52.68
	(ii) Capital Adequacy Ratio (%)	12.02	14.38	11.95
	(iii) Earning Per Share (EPS) (Rupees)
	a) Basic (not annualized)	2.20	2.11	10.06
	b) Diluted (not annualized)	2.20	2.11	10.06
	(iv) NPA Ratios
	a) Amount of gross NPA	15781.800	12936.600	15646.800
	Amount of net NPA	10711.500	7140.600	10829.100
	b) % of gross NPAs	1.98	2.06	1.87
	% of net NPAs	1.36	1.15	1.30
	c) Return on assets (annualised)	0.50%	0.60%	0.67%
18	Public Shareholding
	No. of shares	342985834	342576088	342985834
	Percentage of Shareholding	47.32	47.29	47.32

Segment Reporting for the quarter ended June 30, 2008

(Rs. Millions)

Sr. No.	Particulars	Quarter ended	Quarter ended	Year ended
		June 30, 2008	June 30, 2007	March 31, 2008
		(Reviewed)	(Reviewed)	(Audited)
a.	Segment Revenue
	Wholesale banking	21325.800	17787.900	74300.000
	Retail banking	9531.000	6528.000	30716.700
	Treasury	5789.500	8192.200	18683.700
	TOTAL	36646.300	32508.100	123700.400
	Less :- Inter-segment revenue	9255.100	10578.100	27137.300
	Net sales / income from operations	27391.200	21930.000	96563.100
b.	Segment Results -Profit/(loss) before tax
	Wholesale banking	1944.300	1137.800	5626.900
	Retail banking	217.100	417.300	2219.400
	Treasury	[343.800]	161.100	380.700
	TOTAL	1817.600	1716.200	8227.000
	Less: Other unallocable expenditure net of Unallocable income
	Total profit before tax	1817.600	1716.200	8227.000
	Income taxes	220.000	185.000	932.500
	Net profit	1597.600	1531.200	7294.500
c.	Capital employed (Segment assets-Segment liabilities)
	Wholesale banking	46020.900	47278.100	47351.900
	Retail banking	15932.700	13254.500	12856.100
	Treasury	6075.400	2886.900	6107.800
	Unallocated	1236.800	138.500	1352.400
	Total	69265.800	63558.000	67668.200
	The Bank has not made any disclosures under the segment `Other Banking Operations' as it is not a significant segment in terms of Accounting Standard 17

Notes:

(i) The above results have been taken on record by the Board of Directors of the IDBI Bank Limited at its meeting held on July 22, 2008.

(ii) Other income includes Profits from investments of Rs. 506.600 Millions earned by the Bank on buy back of its shares by IDBI Capital Market Services Limited (ICMS), a wholly owned subsidiary.
(iii) The details of investor complaints are as follows:

Category of investors	Pending as on 1/4/08	Received during the quarter	Disposed during the quarter	Unresolved at the end of quarter
Shareholders	Nil	543	543	Nil
Bondholders	2	17604	17601	5
Total	2	18147	18144	5

(iv)The figures of the previous accounting periods have been regrouped and adjusted wherever required.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.49.29
UK Pound	1	Rs.80.40
Euro	1	Rs.63.35

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		68

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions