MIRA INFORM REPORT

 

 

Report Date :

10.12.2011

 

IDENTIFICATION DETAILS

 

Name :

THE RATNAKAR BANK LIMITED

 

 

Registered Office :

Shahupuri, Kolhapur – 416001, Maharasahtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2011

 

 

Date of Incorporation :

14.06.1943

 

 

Com. Reg. No.:

007308

 

 

Capital Investment / Paid-up Capital :

Rs. 2149.474 Millions

 

 

CIN No.:

[Company Identification No.]

U65191PN1943PLC007308

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

KLPT01764A/ MUMT09278D/ KLPT01905B/ KLPT01845E/ KLPT01800B/ KLPT01797F/ KLPT01864C/ KLPT081858D/ PNET08057A/ PNET07964F/ MUMT09900C/ PNET03925F/ KLPT01783F/ MUMT03234A/ KLPT01940B/ KLPT01924G

 

 

PAN No.:

[Permanent Account No.]

AABCT3335M

 

 

Legal Form :

A Closely Held Public Limited Liability Company

 

 

Line of Business :

Banking Activities

 

 

No. of Employees :

907(Approximately) As on 31.03.2011

 

RATING & COMMENTS

 

MIRA’s Rating :

A (64)

 

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 :

USD 43400000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established bank having fine track. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments.

 

The bank can be considered good for normal business dealings at usual trade terms and conditions.

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – September 30, 2011

 

Country Name

Previous Rating

(30.06.2011)

Current Rating

(30.09.2011)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOCATIONS

 

Registered Office :

1st Lane, Shahupuri, Kolhapur – 416001, Maharashtra, India

Tel. No.:

91-231-2656831/2653006

Fax No.:

91-231-2653658

E-Mail :

vpjain@ratnakarbank.in

Websites :

http://www.theratnakarbank.com

 

 

Administrative Office :

Mahavir, Shri Shahu Market Yard, Kolhapur – 416005, Maharashtra, India

Tel. No.:

91-231-2650981 to 984

Fax No.:

91-231-2657386

 

 

Mumbai Main Office :

One India Bulls Center, Tower 2, 6th Floor, 841, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400013, Maharashtra, India

Tel. No.:

91-22-43020600

Fax No.:

91-22-43020520

 

 

DIRECTORS

 

As on 31.03.2011

 

Name :

Mr. S.G Kutte

Designation :

Chairman cum Managing Director

 

 

Name :

Mr. Vishwavir Ahuja

Designation :

Managing Director and Chief Executive Officer

 

 

Name :

Mr. B.D. Arwade

Designation :

Director

 

 

Name :

Mr. G.V. Godbole

Designation :

Director

 

 

Name :

Mr. K.J. Patil

Designation :

Director

 

 

Name :

Mr. Narayan Ramchandran

Designation :

Director

 

 

Name :

Mr. S.N. Minche

Designation :

Director

 

 

Name :

Mr. Vimal Bhandari

Designation :

Director

 

 

Name :

Mr. Murti Radhakrishnan

Designation :

Additional Director

 

 

Name :

Mr. T.B. Satyanarayan

Designation :

Additional Director

 

KEY EXECUTIVES

 

 

Name :

Mr. Rajeev Ahuja

Designation :

Head – Financial Markets and Strategy

 

 

Name :

Mr. Nitin Chopra

Designation :

Head – Consumer and Retail Banking

 

 

Name :

Mr. Sunil Gulati

Designation :

Chief Risk Officer

 

 

Name :

Mr. S.B. Mukherji

Designation :

Chef General Manager

 

 

Name :

Ms. Shanta Vallury

Designation :

Head – Branch Banking

 

 

Name :

Mr Suhas Sahakari

Designation :

Head – Commercial Banking

 

 

Name :

Mr. Naresh Karla

Designation :

Chief Financial Officer

 

 

Name :

Mr. R. Gurumurthy

Designation :

Head – Corporate and Institutional Banking

 

 

Name :

Ms. Virta Jain

Designation :

Company Secretary

 

 

BUSINESS DETAILS

 

 

Line of Business :

Banking Activities

 

 

GENERAL INFORMATION

 

No. of Employees :

907(Approximately) As on 31.03.2011

 

 

Bankers :

Reserve Bank of India

 

 

Facilities :

Secured Loan

As on

31.03.2011

(Rs. in

Millions)

As on

31.03.2010

(Rs. in

Millions)

Borrowing in India

 

 

Reserve Bank of India

0.000

0.000

Other Banks

0.000

0.000

Other Institution and Agencies

76.917

0.309

Subordinate Debts

0.000

38.000

Total

76.917

38.309

Secured Loan

As on

31.03.2010

(Rs. in

Millions)

As on

31.03.2009

(Rs. in

Millions)

Borrowing Outside India

0.000

0.000

Total

0.000

0.000

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

P.G. Bhagwat

Chartered Accountant

 

 

CAPITAL STRUCTURE

 

As on 31.03.2011

 

Authorised Capital :

No. of Shares

Type

Value

Amount

400000000

Ordinary  Shares

Rs.10/- each

Rs. 4000.000 Millions

 

 

 

 

 

Issued

No. of Shares

Type

Value

Amount

220117000

Equity Shares

Rs.10/- each

Rs. 2201.170 Millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

214947396

Equity Shares

Rs.10/- each

Rs. 2419.474 Millions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

 

31.03.2011

31.03.2010

CAPITAL AND LIABILITIES

 

 

 

1]  Capital

 

2149.474

1047.201

2] Reserves & Surplus

 

8700.321

2482.614

3] Deposits

 

20421.568

15850.367

4] Borrowings

 

76.917

38.309

5] Other Liabilities and Provision

 

948.595

1439.040

 

 

 

 

TOTAL

 

32296.875

20857.531

 

 

 

 

ASSETS

 

 

 

Cash and Balances With Reserve Bank of India

 

1641.733

18031.178

Balances With Banks and Money at Call and Short Notice

 

1860.114

1757.617

Investment

 

8924.836

5072.176

Advances

 

19051.673

11704.437

Fixed Assets

 

433.978

217.196

Other Assets

 

384.541

302.927

 

 

 

 

TOTAL

 

32296.875

27085.531

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

 

31.03.2011

31.03.2010

 

INCOME

 

 

 

 

 

Interest Earned

 

1891.882

1441.658

 

 

Other Income

 

185.794

132.199

 

 

TOTAL                                     (A)

 

2077.676

1573.857

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Interest Expanded

 

940.324

852.471

 

 

Operating Expenses

 

944.775

387.037

 

 

Provision and Contingencies

 

69.314

143.269

 

 

TOTAL                                     (B)

 

1954.413

1382.777

 

 

 

 

 

Less

NET PROFIT/(LOSS) FOR THE YEAR

 

123.263

191.080

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

 

2.206

3.358

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Transfer to Statutory Reserve

 

31.000

48.000

 

 

Transfer to Capital Reserve

 

0.000

6.112

 

 

Transfer to Revenue and Other Reserves

 

35.000

60.000

 

 

Transfer to Investment Reserve

 

5.353

4.852

 

 

Proposed Dividend

 

42.989

62.832

 

 

Tax on Dividend

 

7.140

10.436

 

BALANCE CARRIED TO THE B/S

 

121.482

192.232

 

 

 

 

 

 

Earnings Per Share (Rs.)

 

 

 

 

Basic

 

0.96

1.82

 

Diluted

 

0.95

1.82

 

LOCAL AGENCY FURTHER INFORMATION

 

 RATING HISTORY

 

Instrument

Amount Outstanding (Rs in Millions)

Maturity Date

Rating Outstanding

Certificate of Deposit

3750.000

July 2011

(ICRA)A1+

 

 

 

 

 

 Rating of [ICRA]A1+ has been assigned to Rs. 3750.000 millions Certificate of Deposits Programme of Subject.   The rating is supported by the bank’s long track record of over 65 years in Maharashtra and North Karnataka, experienced senior management team that has joined the bank over the last one year, strong regulatory capitalisation level of 56.4% as on 31-Mar-11 aided by capital infusion in Q4FY11, comfortable liquidity profile with positive mismatches in short term buckets, healthy CASA ratio of 35% as on 31-Mar-11, stable asset quality, and healthy Net Interest Margins (NIMs). The rating also factors in the relatively small size of operation with asset base of around Rs. 32000.000 millions as on 31-Mar-11, geographical concentration of operations, with more than 60% of advances in Maharashtra and the decline in FY11 profitability on account of high one-time expenses. ICRA derives comfort from the change in management of the bank with several experienced banking professionals joining at senior management positions, and the change in shareholding pattern following the rights issue in Q4FY11. The ability of the new management in scaling up the business volumes in a fiercely competitive environment while managing the associated risks will be a key rating sensitivity.

 

In FY11, advances registered a strong growth of 60% from Rs. 11700.000 millions to ~Rs. 19000.000 millions, with most of the growth happening in the last quarter of FY11. In the first nine months of FY11, the new management took stock of the present condition of the bank and decided to implement new policies and systems that were required to continue the growth momentum, resulting in a muted growth of 10% over Mar-10 levels. ICRA has also noted a shift in the nature of advances; In FY10, almost 30% of the advances portfolio pertained to bill discounting/Letter of credit. In FY11, the new management focussed on increasing the share of term loans and other advances. Consequently, the share of bill discounting /LC has come down to ~20% of the total advances as on Mar-11.

 

The growth in overall deposits has been lower as compared to that in advances, resulting in increase in Credit to Deposit ratio from 74% in FY10 to 93% in FY11. CASA deposits of the bank decreased marginally from 36.1% in FY10 to 34.5% in FY11 with slower growth in low cost deposits. Given the growth targets of the bank, the CASA ratio is expected to further drop over the next 12-18 months and the management expectation of maintaining the CASA above 30% would be a challenge. The asset quality of the bank has remained stable over the past few years and has shown improvement in FY11, with the fresh NPA generation rate dropping to 0.42% in FY11 as compared to 1.86% in FY10. Further, during FY11, the bank increased focus on recoveries which resulted in significant collections from overdue accounts. Hence, the Gross and Net NPA ratio improved to 1.12% and 0.36% respectively as of 31-Mar-11, much lower than Mar-10 numbers of 2.33% and 0.97% respectively. The restructured advances of the bank continue to be low at 0.63% of total advances as on 31 March 2011, with no advances restructured during FY10 & FY11.

 

Subject posted a healthy growth of 61% in Net Interest Income in FY11 to Rs. 950.000 millions, on the back of strong credit growth. While the average yield on advances got compressed by 100 bps in FY11, RBL managed to improve its NIMs from 3.67% in FY10 to 4.62%* in FY11 on account of lower interest expense. The yield on advances of the bank has remained low on account of higher share of LC/bill discounting. Going forward, with the change in portfolio mix, and the hikes in the base rate (currently at 9%), the yields is expected to improve. Net Interest Margin (NIM) of the bank has remained healthy in excess of 3% for the last 5 years on the back of low leverage and modest deposit costs.

 

Fee based income of the bank has formed 0.2%-0.3% of the average total assets for the last five financial years. The bank is a corporate agent of Kotak Life and Bajaj Allianz General Insurance and it will also start distributing Mutual Funds from July 2011 onwards, providing stability to the fee income. The ‘Miscellaneous income’ of the bank increased from 0.39% in FY10 to 0.52% in FY11, mainly on account of recovery from written off loans and higher processing fees. In FY11, the operating expenses of the bank increased from 2.04% to 3.56% on account of higher employee expenses driven by higher pension & gratuity cost, and addition to the workforce. The employee expenses for the bank have increased from 1.2% in FY10 to 2.7% in FY11. While the pension cost with respect to retired employees (Rs. 124.400 millions) has been expensed in FY11 in accordance with RBI guidelines, the bank has decided to amortise the pension cost pertaining to current employees over three years, instead of five years as permitted by RBI. Further, the bank has charged entire cost due to gratuity limit enhancement, amounting to Rs. 17.100 millions, in FY11 itself instead of five years as permitted by RBI.

 

In FY11, RBL reported negative credit provisions as focus on recoveries lead to write-back of provisions. Overall, provisions continue to be low and have come down from 0.26% for FY10 to 0.01% for FY11. On account of significant one-time expenses relating to the second pension option, enhancement in gratuity limit, payment of wage revision related arrears, addition to the employee base etc. causing higher employee expenses, the core operating profits of the bank shrunk to 0.74% in FY11, as compared to 1.72% in FY10. Driven by lower operating profits, slightly offset by lower provisions, the net profitability of the bank reduced to 0.46% of average total assets for FY11 as compared to 1.01% for FY10. While the one-time pension expenses with respect to retired employees has impacted profitability in FY11, accelerated provisions with respect to current employees, will have a positive impact on the future profitability indicators.

 

The capital adequacy of the bank has remained strong over the past few years and it got further boosted by capital infusion of Rs. 7030.000 Millions via the 10th Rights issue in Q4FY11. As a result, the capital adequacy ratio of the bank stood at 56.41% (Tier I: 55.9%) as of 31-Mar-11. Currently, RBL has no tier II bonds; the last tranche of Tier II bonds was redeemed in Sep-10.

 

The bank’s liquidity position remains comfortable with positive mismatches in the short term buckets. The majority of advances of the bank have short to medium term; together with strong CASA base helps the bank to maintain a good ALM profile. The bank also has increased its inter-bank counterparty lines which would help the bank to manage short term liquidity mismatches.

 

 

BRIEF BACKGROUND

 

Established in 1943, Subject is a Kolhapur based small sized old private sector bank. It was granted the status of scheduled commercial bank in 1959. The business of Subject is primarily concentrated in Maharashtra, and North Karnataka. As on March 31, 2011, RBL had 100 branches and 19 ATMs. The asset base of the bank stood at Rs. 32300.000 millions at the end of FY11, a growth of 55% over FY10. In FY11, the bank reported total income of Rs. 2080.000 millions and a net profit of Rs. 120.000 millions. The gross and net NPA of the bank stood at 1.12% and 0.36% respectively as on March 31, 2011 (2.33% and 0.97% respectively as on March 31, 2010). The bank reported a regulatory capital adequacy ratio at 56.4%, with Tier I capital being 55.9% as on March 31, 2011.

 

FINANCIAL HIGHLIGHTS

 

The net profit for the year after provisions and taxes amounts to Rs. 123.300 Millions, which shows a decrease of Rs. 67.800 Millions compared to previous year mainly on account of significant charge to the profit and loss account for meeting the costs relating to the second pension option, enhancement in gratuity limit, payment of wage arrears post the 9 bi-partite wage agreement etc. adding up to approximately Rs. 347.300 Millions Notwithstanding these higher costs, the Bank has shown a strong all-round performance and grown its Net Interest Income, Fee Income and achieved a significant reduction in Non-performing Assets resulting in a net profit of Rs. 123.300 Millions

 

NET WORTH

 

Net Worth of the Bank as at March 31, 2011 was Rs. 10745.500 Millions comprising of paid-up equity capital of Rs. 2149.500 Millions and reserves of Rs. 8596.000 Millions (excluding Revaluation Reserve, Investment reserve and intangible assets). An amount of Rs. 71.300 millions was transferred to reserves out of the profit earned during FY11.

 

MANAGEMENT DISCUSSION AND ANALYSIS

 

Economic Environment:

 

In 2010, the world economy continued to recover from its deepest recession since the end of World War ll. The marked economic improvement is attributable to three main factors:

* Expansive monetary and fiscal policy in the industrial countries

* Robust demand of the emerging market economies

* Catch-up effects on the demand side and inventory building

 

Global GDP grew by 4.7% in 2010 after contracting by 1.2% in 2009. At 7.4%, GDP growth in the emerging market economies was much stronger than that in the developed world (2.6%). The Indian economy has been on a high growth trajectory registering a growth rate of 8.5% in 2010-11 vis-avis 8% growth in the previous fiscal.

 

The growth has been broad-based with the agriculture sector growing by a significant 6.6% (0.4% for previous year) for FY11 and the industrial and the service sectors growing by 7.9% (8%) and 9.4% (10.1%) respectively. Growth in the industrial sector was buoyant during the first half of FY11. The manufacturing sector grew at a robust rate of 12.7% and 10% in the first two quarters of 2010-11 respectively. Thereafter, industrial output growth started moderating. Index of industrial production (IIP) registered a 7.8% growth for the financial year 2010-11 as against a growth of 10.5% a year ago.

 

India's exports have posted a significant growth and surpassed the growth target of US $220 billion set for 2010-11. Export growth for the second half of FY11 was lower than the growth seen during the first half, but substantially higher than the rates prevalent a year ago.

 

Financial markets in India remained, by and large, stable in FY11 despite the challenges posed by global uncertainties, high inflation and high current account and fiscal deficits. Money markets remained orderly in FY11 with call money rate largely remaining within the Liquidity Adjustment Facility (LAF) corridor. Asset prices, including property prices, generally remained range bound. Stock markets showed periodic volatility as a response to domestic and global developments. In the foreign exchange market, the Rupee remained volatile against major international currencies during FY11.

 

The banking sector in India remains healthy, resilient, and profitable and has performed well during 2010-11. In FY11, Scheduled Commercial Banks (SCBs) credit growth (21.49%) outpaced deposit growth (15.95%) by a substantial margin. However, during FY11 Inflation, from a peak of 11% in April 2010, declined gradually but continued to remain at about 8%. The inflation further increased to 9.44% in June 2011. In view of the inflationary pressure, RBI maintained a tightening stance through the year by raising the policy rates ten times in a row. From April 2010 till end of June, the cash reserve ratio (CRR) was increased by 25 basis points from 5.75% to 6%, the repo rate by 250 basis points from 5% to 7.5%, and the reverse repo rate by 300 basis points from 3.5% to 6.5%. These tightening measures have translated into a rise in the rate of interest on liabilities as well as assets across the board including the rates charged by the banks to their borrowers.

 

In FY12, at least in the first half of the year, it is expected that the monetary tightening would continue. Factors such as economic developments in the Eurozone, weak recovery in the developed countries, monetary measures adopted by these countries, rate of inflation etc. would determine the course for the Banking Industry in India. The monetary tightening in India as well as rising commodity prices and demand situation in the domestic as well as international markets is also likely to impact the pace of growth of the Indian economy which will have consequent influence on the credit growth. With increasing competition in the industry, focus on financial inclusion, expected cost pressures on account of higher deposit rates, employee as well as operating expenses, enhanced provision requirements on advances, banks are expected to face margin and profit pressure during FY12. Banks would be required to plan and take concerted measures to achieve financial targets in this environment.

 

In summary, the long-term fundamentals of the Indian economy, i.e. favourable demographics, growing middle class, rising incomes, emergence of lower tier cities, high savings and investment rate etc., point to the underlying strength and resilience of the economy. These growth drivers are expected to be sustained over the medium-to long term. However, in the short term, high inflation continues to pose challenges for the policy makers, at a time when global economic environment is showing signs of weakness as well as persistent uncertainty in the Eurozone with high inflation and rising interest rates risking the economic growth of the country.

 

Capital:

 

Against the backdrop of a volatile equity market, the Bank has successfully completed its capital raising exercise in FY11. The Bank raised Rs. 7267.800 millions during the year. The Bank raised `Rs. 7027.500 millions at the appropriate time in Q4 FY11 by doing a rights issue during the last quarter of the financial year. The Bank has also achieved a high level of institutionalization of shareholding

 

- in excess of 55% of the capital base of the Bank.

This capital base will allow the Bank to complete its transformation agenda as well as finance its future growth.

 

As of date, more than 80% of the Bank’s shares are held in dematerialized form.

 

Technology/Infrastructure and Operations:

 

During FY11 the Bank set up 12 new branches (taking the total to 100 branches) and a modern corporate office along with a branch at One India bulls Centre, Lower Parel, Mumbai. During the year, the Bank has made significant improvement in its technology infrastructure making the Bank’s service offering swift as well as more resilient. The Bank also completed implementation of Core Banking System (CBS) in all its rural and semiurban

branches - all the 100 branches of the Bank are now on CBS.

 

The Bank has become a member of the NFS and implemented a new switch leading to a wider acceptability of the Bank’s ATM card as well as improving the cross utilisation of the Bank’s ATMnetwork. The Bank now also has the capability of offering various card based products. The Bank has outsourced its ATM deployment and servicing activities to achieve scale and economy of operations which would enable the Bank to aggressively pursue its plan of deploying more than 250 ATMs over three years. The Bank has implemented automated Treasury system to take care of its fixed income, money markets and foreign exchange initiatives.

 

Business Focus:

 

The Bank has made significant progress on the business front bringing in specialization in terms of formation of Commercial Banking, Retail, Agriculture and Financial Inclusion and Financial Markets verticals, yet retaining a ‘Branch Centric’ business organization. The Bank has resourced these verticals with the right talent to significantly grow the business of the Bank. After completing the set-up phase, in the latter half of the year the Bank has increased focus on growing the size of business as is evident from the financial highlights above, while continuing to build upon upgrading its technology platforms, infrastructure, treasury and product capabilities, operations and risk processes in the year underway.

 

BUSINESS PERFORMANCE:

 

DEPOSITS

 

During the year, Deposits of the Bank increased from Rs. 15850.400 Millions as at March 31, 2010 to Rs. 20421.600 millions as at March 31, 2011, registering a growth of 29%.

 

ADVANCES

 

During the year, Net Advances increased from Rs. 11704.400 millions as at March 31, 2010 to `Rs. 19052.000 millions as at March 31, 2011, registering a growth of 63%.

 

PRIORITY SECTOR ADVANCES

 

The Bank has always been in the forefront in the area of Priority Sector and Agriculture Lending, harnessing the vast potential of the rural market through its wide network of over 56 rural and semi urban branches.

 

Priority Sector Advances of the Bank surged from Rs. 3332.800 millions to Rs. 5001.900 millions as at March 31, 2011 and formed 56.09% of the Adjusted Net Bank Credit (ANBC) against the mandated target of 40%. Of this, credit to agriculture witnessed a robust growth. Total Agriculture Advances of the Bank recorded a growth of 101% over the previous year and rose to Rs. 2048.400 millions comprising 22.97% of ANBC as on March 2011 against a mandated target of 18%

 

Outstanding Credit to SC/ST out of total Priority Sector Credit is Rs. 27.200 millions spread over 1149 accounts. Actual recovery in such accounts was Rs. 40.000 millions, which was 37.73% of demand.

 

 

CORPORATE GOVERNANCE

 

Bank’s Philosophy:

 

The Bank’s philosophy on corporate governance is aimed at supporting the top management of the Bank in the efficient conduct of its business and meeting its obligations towards its stakeholders. The Bank is committed to transparent and merit-based organisation and ensures fairness transparency and responsiveness in all transactions.

 

Board of Directors

 

Constitution

 

The Board of Directors is constituted in accordance with the provisions of the Companies Act, 1956, Banking Regulation Act, 1949 and Articles of Association of the Bank. The Board consists of eminent persons with considerable professional expertise in banking, finance, agriculture and other related fields.

 

The Board is comprised of seven non- executive directors, two directors appointed as Additional Director by Reserve Bank of India (RBI) and one Executive Director (i.e. Managing Director and Chief Executive Officer).

 

The names of directors as of March 31, 2011 and their attendance during the review year at Board/ Committee are given under the heading of Attendance of Directors.

 

Committee of Directors:

 

The Board functions either as a full Board or through various committees to oversee specific operational areas. The Board has constituted eleven Committees of Directors to take decisions or advise the Board on certain operational areas in the best interests of the Bank. These committees monitor activities falling within their term of reference.

 

Contingent Liability

                                                                                                                                                           Rs in Millions

Particular

31.03.2011

31.03.2010

Claims against the bank not acknowledged as debts

4.903

3.771

Liability for Partly Paid Investment

55.596

42.000

Liability on Account of Outstanding forward Exchange contracts

0.000

0.000

Guarantees given on behalf of constituents

 

 

- In India

848.719

686.991

- Outside India

0.000

0.000

Acceptances, Endorsements and other Obligations

82.279

97.146

Other items for which the bank is contingently liable

 

 

Income tax & other matters (under appeal)

63.618

39.956

 

1055.116

869.864

 

DISCLOSURE UNDER THE NEW CAPITAL ADEQUACY FRAMEWORK (BASEL ll) FOR THE QUARTER ENDED 30TH JUNE 2011

                                                                                                                                           (Rs. in Millions)

Particulars

31.06.2011

31.03.2011

Capital

 

 

- Tier l

10745.500

10745.500

- Tier ll

104.200

91.700

TOTAL

10849.700

10837.200

 

 

 

Capital Reserved at 9%

 

 

- For Credit Risk

1997.600

1531.700

- For Market Risk

255.900

97.300

- For Operational Risk

120.800

100.200

TOTAL

2374.300

1729.200

 

 

 

Capital Adequacy Ratio

41.13%

56.41%

- Tier l

40.73%

55.90%

- Tier ll

0.40%

0.48%

 

AUDITED ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 31, 2011

 

                                                                                                              (Rs. in Millions)

Particulars

2010-2011

AUDITED

1 Interest earned (a) + (b) + (c)

1891.900

(a) Interest / discount on advances / bills

1341.500

(b) Income on Investments

440.000

(c) Interest on balances with Reserve Bank of India and other inter -

bank funds

110.400

2 Other Income

185.800

3 TOTAL INCOME (1) + (2)

2077.700

4 Interest Expended

940.300

5 Operating expenses (i) + (ii)

944.800

(i) Employees Cost

722.700

(ii) Other operating expenses

222.100

6 TOTAL EXPENDITURE (4) + (5)

1885.100

(Excluding Provisions and Contingencies)

 

7 OPERATING PROFIT (3) - (6)

192.600

8 Provisions (other than tax) and Contingencies (Net)

3.000

9 Exceptional Items

--

10 Profit / (Loss) from OrdinaryActivities before Tax (7) - (8) - (9)

189.600

11 Tax Expense

66.300

12 Net Profit / (Loss) from Ordinary Activities after Tax (10) - (11)

123.300

13 Extraordinary items (net of tax expense)

--

14 NET PROFIT / (LOSS) (12) - (13)

123.300

15 Paid - up equity share capital (Face value Rs. 10/- per share)

2149.500

16 Reserves excluding revaluation reserves

8688.700

17 Analytical Ratios

 

(i) Percentage of Shares held by Government of India

--

(ii) Capital Adequacy Ratio (Basel I)

59.42%

(iii) Capital Adequacy Ratio (Basel II)

56.41%

(iv) Earnings per Share (EPS)

 

- Basic

0.96

- Diluted

0.95

(v) NPA Ratios

 

(a) Amount of Gross Non-Performing Assets

2215.100

(b) Amount of Net Non-Performing Assets

68.900

(c) % of Gross NPAs

1.12%

(d) % of Net NPAs

0.36%

(vi) Return on Assets

0.53%

 

 

 

 

 

 

 

 

 

 

    

    

 

     

 


 

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.52.23

UK Pound

1

Rs.81.55

Euro

1

Rs.69.60

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

8

PAID-UP CAPITAL

1~10

7

OPERATING SCALE

1~10

8

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

7

--PROFITABILIRY

1~10

6

--LIQUIDITY

1~10

7

--LEVERAGE

1~10

7

--RESERVES

1~10

7

--CREDIT LINES

1~10

7

--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

NO

--LISTED

YES/NO

NO

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

64

 

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

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

-

NB

                                       New Business

-

 

 

 

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.