MIRA INFORM REPORT

Report Date :

15.03.2011

IDENTIFICATION DETAILS

Name :	TAMILNAD MERCANTILE BANK LIMITED
Registered Office :	57, Victoria Extension Road, Thoothukudi-628002, Tamilnadu
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	11.05.1921
Com. Reg. No.:	001908
CIN No.: [Company Identification No.]	U65110TN1921PLC001908
TAN No.: [Tax Deduction & Collection Account No.]	CHET01129C
Legal Form :	Public Limited Liability Bank.
Line of Business :	Subject is engaged in banking activities.

RATING & COMMENTS

MIRA’s Rating :

A (70)

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 510000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed bank having fine track. Financial position of the bank is good. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. 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 – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
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 :	57, Victoria Extension Road, Thoothukudi-628002, Tamilnadu, India
Tel. No.:	91-461-2321382 /2321929 / 2321932 /2321971 / 2325381 /2 325831
Fax No.:	91-461-2322994
E-Mail :	tmbankhi@md3.vsnl.net.in tmbankms@md3.vsnl.net.in tmbankho@sancharnet.in
Website :	http://www.tamilnadmercantilebank.com
Branches :	Located at · Andhra Pradesh · Delhi · Gujarat · Karnataka · Kerala · Maharashtra · Orissa · Pondicherry · Punjab · Rajasthan · Tamilnadu · West Bengal
Regional Office :	14 - F and G, Mani Nagar, Palayamkottai Road, Thoothukudi - 628002, Tamilnadu, India

DIRECTORS

As on 30.09.2010

Name :	Mr. Arvamuthan Kannan Jagannathan
Designation :	Managing Director
Address :	TMB Pearl House, 5T/4, Ganesan Nagar, Thoothukudi-628008, Tamilnadu, India
Date of Birth/Age :	12.04.1950
Date of Appointment :	23.09.2010
DIN No.:	03273392
Name :	Mr. Balkrishnan Prabhakaran
Designation :	Director
Date of Appointment :	26.11.2009
DIN No.:	00209875
Name :	Mr. Thangavel Rajakumar
Designation :	Director
Date of Appointment :	26.11.2009
DIN No.:	02659409
Name :	Mr. Vikraman Nithayanandham
Designation :	Director
Date of Appointment :	26.11.2009
DIN No.:	00466250
Name :	Mr. Pandian Mahendravel
Designation :	Director
Date of Appointment :	26.11.2009
DIN No.:	00688302
Name :	Mr. Yesuthasen Pathiudian
Designation :	Director
Date of Appointment :	26.11.2009
DIN No.:	00767702
Name :	Mr. Shanmugam Rajendran Aravindkumar
Designation :	Director
Date of Appointment :	26.11.2009
DIN No.:	02145836
Name :	Mr. Subbu Nadar Chandrasekar
Designation :	Director
Date of Appointment :	26.11.2009
DIN No.:	02174506
Name :	Mr. Thirukumar Vethanayagam
Designation :	Director
Date of Appointment :	12.02.2010
DIN No.:	02873163
Name :	Mr. Srinivasan Sundar
Designation :	Director
Date of Appointment :	06.01.2010
DIN No.:	00115315
Name :	Mr. Kaippilly Narayanan Rajan
Designation :	Nominee Director
Date of Appointment :	11.01.2010
DIN No.:	02963834
Name :	Mr. Rajan Valappil Kiliyam
Designation :	Nominee Director
Date of Appointment :	11.07.2010
DIN No.:	03184355
Name :	Mr. Gudupalle Nagamal Reddy
Designation :	Managing Director
Date of Appointment :	01.06.2009
Date of Ceasing:	23.09.2010
DIN No.:	02490682
Name :	Mr. Shankar Jaganathan
Designation :	Director
Date of Appointment :	26.11.2009
Date of Ceasing:	06.01.2010
DIN No.:	02121024
Name :	Mr. Sambasivan Ganapathy
Designation :	Director
Date of Appointment :	26.11.2009
Date of Ceasing:	06.01.2010
DIN No.:	02897850
Name :	Mr. Srinivasan Swminathan
Designation :	Nominee Director
Date of Appointment :	11.07.2006
Date of Ceasing:	10.07.2010
DIN No.:	00230782
Name :	Mr. Kannan Srirangapatnam Tirumalachari
Designation :	Nominee Director
Date of Appointment :	11.10.2004
Date of Ceasing:	10.01.2010
DIN No.:	00277899

KEY EXECUTIVES

Name :	Mr. N S Mohan
Designation :	Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2010

Names of Shareholders	No. of Shares
Annamalai S	684
Arul Arasu E	905
Ashok S	732
Ashok Kumar P.C.G.	2722
Athiban A.S.	1346
Barathamani D.	501
Baskaran C	1590
Bhaskaran V	830
Brammanandamn V V D	768
Chinnakannan R	1220
Dharmarajan N S SC	619
Ganesan D	549
Geetha Prem	515
Gokul Patnai	11342
Jeyalakshmi P	1586
Kamala Narendran	850
Kanagasabat R	549
Kannan Adityan B R	712
Kumaran K	1274
Lingakumar K	1000
Maheswsaran S	1132
Maran M G M	10459
Meenakshi R	2844
Murali Ganesan R	622
Muthu M G	2820
Narendran C.S.	763
Nithyavathi Venkatesan	699
Pankajam R	1242
Paul Chelliah Nadar	750
Rajakumari M	2844
Rajan C M	1180
Rajan P	1000
Ramachandra Adityan B	11317
Raveendran C S	1307
Senthil M	2844
Shunmuga Jothi N	1586
Shunmugathaiammal G	1001
Srinivasan A	1638
Srinvasan C	2001
Subash Chandra Bose A	2131
Vijayaragavan S	1000

Equity Share Breakup (Percentage of Total Equity)

(As on 30.09.2010)

Category	Percentage
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	16.64
Bodies corporate	10.25
Directors or relatives of Directors	5.32
Other top fifty shareholders 30.95	30.95
Others	36.84
Total	100.00

BUSINESS DETAILS

Line of Business :

Subject is engaged in banking activities.

GENERAL INFORMATION

No. of Employees :

2295 Approximately

Bankers :

Reserve Bank of India

Facilities:

Secured Loans	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
I. Borrowings in India
i. Reserve Bank of India	0.000	0.000
ii. Other Banks	0.000	0.000
iii. Other Institutions and Agencies	600.000	326.814
II. Borrowings outside India	0.000	0.000
Total	600.00	326.814

Banking Relations :	Good
Auditors :
Name :	J. Thomas Fernando and Company Chartered Accountants

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Share	Rs.10/- each	Rs.100.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
284454	Equity Shares	Rs.10/- each	Rs. 2.845 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		2.845	2.845	2.845
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		11478.944	9882.423	8580.039
4] deposit		116393.013	95660.430	76702.609
NETWORTH		127874.802	105545.698	85285.493
LOAN FUNDS
1] Secured Loans		600.000	326.814	11.110
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		600.000	326.814	11.110
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		128474.802	105872.512	85296.603
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		504.424	538.958	491.079
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		34991.863	32071.925	25535.382
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Balance with Banks and Money at call and short Notice	2751.330	2147.735	989.178
	Cash & Bank Balances	9192.341	7137.654	6788.213
	Other Current Assets	5539.398	4822.309	1531.320
	Loans & Advances	82876.072	65716.854	53313.152
Total Current Assets		100359.141	79824.552	62621.863
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	7380.626	6562.923	3351.721
	Provisions	0.000	0.000	0.000
Total Current Liabilities		7380.626	6562.923	3351.721
Net Current Assets		92978.515	73261.629	59270.142
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		128474.802	105872.512	85296.603

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income (Interest Earned)	11184.059	9771.457	7610.039
		Other Income	1727.963	1358.438	1307.048
		TOTAL (A)	12912.022	11129.895	8917.087
Less	EXPENSES
		Operating Expenses	2314.493	2042.866	1685.122
		Provision and Contingencies	1313.715	1150.674	976.577
		TOTAL	3628.208	3193.540	2661.699
Less	PROFIT BEFORE INTEREST, TAX		9283.814	7936.355	6255.388
Less	FINANCIAL EXPENSES/ INTEREST		7438.519	6434.294	4988.037
	PROFIT BEFORE TAX		1845.295	1502.061	1267.351
Less	TAX		0.000	0.000	0.000
	PROFIT AFTER TAX		1845.295	1502.061	1267.351
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		0.767	1.683	1.190
Less	APPROPRIATIONS
		Transfer to Statutory Reserve	553.600	451.200	381.000
		Transfer to Other Reserve	995.000	827.010	700.350
		Transfer to Investment reserve	48.500	25.090	19.110
		Proposed Dividend	213.340	170.672	142.227
		Tax on Dividend	35.434	29.005	24.171
	BALANCE CARRIED TO THE B/S		0.188	0.767	1.683
	Earnings Per Share (Rs.)		6487.15	5280.51	4455.38

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	14.29	13.50	14.21
Net Profit Margin (PBT/Sales)	(%)	16.50	15.37	16.65
Return on Total Assets (PBT/Total Assets}	(%)	1.83	1.87	2.01
Return on Investment (ROI) (PBT/Networth)		0.01	0.01	0.01
Debt Equity Ratio (Total Liability/Networth)		0.06	0.07	0.04
Current Ratio (Current Asset/Current Liability)		13.60	12.16	18.68

LOCAL AGENCY FURTHER INFORMATION

OVERALL ECONOMIC REVIEW

The Indian economy, after witnessing a slowdown during 2008-09 recovered in 2009-10 with a growth of 7.2% (previous year 6.7%). Five sectors viz. Mining and quarrying, Manufacturing, Electricity, gas and water supply, Construction, Trade, hotels, transport and communication recorded higher growth rates in 2009-10. However, remaining three sectors viz., Agriculture and allied activities, Financing, insurance, real estate and business services, Community, social and personal services showed decline in growth when compared to 2008-09. After a continuous decline for nearly a year, exports and imports have expanded since October / November, 2009. On the whole the economic recovery which began around the second quarter of 2009-10 has since shown sustained improvement.

BANKING SCENARIO

The aggregate deposits and credit growth of Scheduled Commercial Banks stood at 17% and 16% respectively. Scheduled Commercial Banks raised their deposit rates by 25-50 basis points in fourth quarter of the year 2009-10, signalling a reversal in the trend of reduction in deposit rates. On the lending side, the benchmark PLR of SCBs have remained unchanged since July 2009 following reductions in the range of 25-100 basis points between March and June 2009.

Surplus liquidity that prevailed throughout the year declined towards the end of the year. During February 27- March 31,2010 the average daily surplus liquidity declined to around Rs.382000.000 Millions because of the increase in the CRR, year end advance tax outflows and higher credit demand from the private sector.

Large market borrowing by the Government put upward pressure on the yields on government securities during 2009-10. However this was contained by active liquidity management by the Reserve Bank. Over the past several years Reserve Bank has undertaken wide ranging financial sector reforms to improve financial intermediation, and to maintain financial stability. This process has now become more intensive with a focus on drawing appropriate lessons from the global financial crisis and putting in place a regulatory regime that is alert to possible build-up of financial imbalances. The focus of the Reserve Bank’s regulation will continue to be to improve the efficiency of the banking sector while maintaining financial stability. Simultaneously it will vigorously pursue the financial inclusion agenda to make financial sector development more inclusive.

BUSINESS PERFORMANCE

The Bank had a successful year in its 88th year of operations and recorded an all-round good performance. During the year the total business increased from Rs.161370.000 Millions to Rs.199270.000 Millions registering a growth of 23.49%. There was significant improvement in Asset Quality due to prudent Recovery measures, because of which both gross and net NPAs as a percentage of total advances got reduced substantially.

Performance Highlights:

· The Net profit grew from Rs.1502.100 Millions to Rs.1845.300 Millions (+22.85 %).

· The deposits of the Bank increased from Rs.95660.000 Millions to Rs. 116390.000 Millions (+21.67%) during the year..

· The advances increased from Rs. 65710.000 Millions to Rs. 82880.000 Millions (+26.13%) during the year.

· The Gross NPA came down from 1.81% to 1.37%.

· The Net NPA was substantially reduced from 0.34% to 0.24%.

The total income increased by Rs.1780.000 Millions during the year from Rs.11130.000 Millions in the previous year to Rs.12910..000 Millions during the year representing 15.99% growth. Interest income rose by about Rs.1410.000 Millions from Rs.9770.000 Millions to Rs.11180.000 Millions and other income from Rs.1360.000 Millions to Rs.1730.000 Millions during the current year. The increase in total expenditure was at Rs.1440.000 Millions. The expenditure rose from Rs.9630.000 Millions during the previous year to Rs.11070.000 Millions during the year. Earnings per share rose to Rs.6487 from Rs.5281. The capital adequacy ratio of the Bank remained high at 14.09% as against the requirement of 9% stipulated by RBI.

PROFIT AND APPROPRIATION

The net profit stood at Rs.1845.300 Millions (previous year Rs.1502.100 Millions) after making all necessary provisions under various categories as per prudential norms prescribed by Reserve Bank of India. After adding thereto the surplus of Rs.0.800 Millions brought forward from 2008-2009 there is an available balance of Rs.1846.100 Millions which has been appropriated as under:

Transfer to	31.03.2010 Rs. in Millions
Statutory Reserve	553.600
Investment Reserve	48.500
General Reserve	995.000
Proposed Dividend for the year	213.300
Tax on Dividend	35.500
Balance carried over to next year	0.200
Total	1846.100

CAPITAL AND RESERVES

The Capital and Reserves of the Bank stand increased to Rs.11481.800 Millions from the previous year’s level of Rs.9885.200 Millions, showing an increase of 16.15% after effecting the above proposed appropriations.

CAPITAL ADEQUACY

The accretion to capital funds during the year amounted to Rs.1596.600 Millions which raised the net worth of the Bank to Rs.11481.800 Millions. The Capital to Risk Adjusted Assets Ratio (CRAR) stood at 14.09% as on 31-03-2010 which is more than the minimum required level of 9% stipulated by Reserve Bank of India. The CRAR as per BASEL II norms stood at 15.54% as on 31-03-2010.

DEPOSITS GROWTH

The aggregate year-end deposits of the bank as on 31.03.2010 were Rs.116393.000 Millions, thus recording a growth of 21.67% over the position as at the end of the previous year and against the industry’s reported growth of 17.00%. The interest rates of the bank are kept in line with the prevailing trends in the banking industry. In view of the continued thrust given by the bank for improving both low cost and no cost deposits (excluding interbank deposits), the same have recorded an increase of Rs.8001.300 Millions over the previous year.

ADVANCES PORTFOLIO – MANAGEMENT OF ASSETS AND DEVELOPMENT OF BUSINESS

The Bank continued its lending activities in conformity with the policies and guidelines of Reserve Bank of India. Total Net Advances of the Bank increased by Rs.17159.200 Millions during the concluded financial year 2009-10 and reached the level of Rs.82876.100 Millions showing a Year on Year Growth of 26.13%.

The bank continued its thrust in lending to Agriculture, Micro and Small Enterprises consisting of both Manufacturing and Service Enterprises. The level of advances to priority sector stood at Rs.36856.800 Millions [including RIDF of Rs.485.300 Millions] as on 31.03.2010 which constituted 55.28% of Adjusted Net Bank Credit against the Regulatory Priority Sector Target of 40%.

The Agricultural Advances reached Rs.14753.600 Millions as on 31.03.2010 which constituted 22.13% of Adjusted Net Bank Credit as against the Regulatory requirement of 18%.

The total weaker section advances reached Rs.7253.400 Millions as on 31.03.2010 which represent 10.88% of Adjusted Net Bank Credit as against the regulatory requirement of 10.00%.

The bank continued its thrust on Schematic Retail Lending as a measure to boost up advances growth and clientele base. Total Schematic Retail Advances went up by Rs.3870.600 Millions during the Financial Year and reached the level of Rs.17702.500 Millions showing a Year on Year Growth of 27.98%.

The advances granted to Export sector by the bank increased from Rs.1782.500 Millions to Rs.2863.300 Millions as on 31.03.2010. Efforts are being taken to step up the flow of credit to export sector.

The total advances to MSME Sector increased by Rs.8493.700 Millions during the Financial Year and reached the level of Rs.21507.900 Millions.

As a measure to uplift economically downtrodden people, the bank continued its thrust in lending to Self Help Groups (SHG) and total number of SHGs assisted increased from 3872 Groups as on 31.03.2009 to 3976 Groups as on 31.03.2010 during the Financial Year with an outstanding of Rs.338.300 Millions. As on 31.03.2010, 3546 customers have been benefited from DRI scheme.

INVESTMENTS AND TREASURY OPERATIONS

During the year ended 31st March 2010, the Bank made a total turnover of Rs.87908.100 Millions in trading operations, resulting in a net profit of Rs.81.000 Millions, as against Rs.75.600 Millions in previous year.

The net investments of the Bank stood at Rs.34991.900 Millions as on 31st March 2010 as against Rs.32072.000 Millions as at the end of previous year. The investment to Deposit Ratio of the Bank was 30.08% as against 33.51% at the end of the previous year.

The average yield on the investment portfolio during the year was at 7.30% as against 8.04% in the previous year, reflecting the general fall in interest rates during the year. The income from investments, comprising interest income and dividend income earned during the year was Rs. 2540.600 Millions (including RIDF) as against Rs.2276.000 Millions (including RIDF) in the previous year. During the year, the Bank shifted securities of Rs.3189.000 Millions from Available For Sale (AFS) category to Held To Maturity (HTM) category, after charging depreciation of Rs.75.300 Millions and Rs.181.98 from Held to Maturity to Available For Sale.

FOREIGN EXCHANGE BUSINESS

In the year 2009-10, the Bank had good growth in the Foreign Exchange Business. The total Merchant turnover had grown to Rs.76053.300 Millions from Rs.57813.800 Millions (2008-09) and registered a growth rate of 31.55% compared to the previous year. The inter bank turnover in the year 2009-10 also had grown to Rs.186408.200 Millions from Rs.176198.900 Millions during the year 2008-09 with 5.79% growth over previous year. The profit on forex business for the year is Rs.202.900 Millions as against Rs.195.700 Millions during the previous year 2008-09 with 3.68% growth. The total number of authorized branches to deal forex business stands at 30.

The Bank has necessary infrastructure to render speedy service relating to inward remittance and for crediting to the beneficiaries’ accounts on receipt of the funds in the Nostro accounts.

The Bank has a global network of 681 overseas correspondent banks with whom bilateral keys under SWIFT arrangement have been exchanged. It facilitates smooth and fast flow of communication in the international business. The swift arrangement has enabled the bank to give timely and efficient service to its forex clients.

Under the tie-up arrangement with UAE Exchange centre LLC, Abu Dhabi, the NRIs and their relatives are being facilitated to receive the money within 24 hours under speed remittance scheme. Drafts are also issued on the Bank under Draft drawing arrangement in favour of the relatives / NRIs from UAE Exchange Centre LLC. The International Banking Division, Chennai, is providing information on forex market and the indicative exchange rates based on the ongoing forex market trends on hourly basis in the bank’s website, to facilitate the NRI clients all over, with up to date information on forex. The officers in IBD are subjected to specialized training in Forex being given by the leading training centres at Mumbai, Pune etc., to keep pace with the day to day changing forex scenario.

The economies of major developed countries like The United States of America, United Kingdom and Germany are in recovery phase after yesteryear global melt down. Indian economy is on upbeat with speedy growth due to its good governance and scrupulous follow-up of the well laid policies. Due to liberalization in the money remittance schemes and increased multi currency exposures among the foreign exchange clients, the bank sees a good growth from business segment. The Bank is committed to increase the forex business activities significantly in adding good revenues to the Bank in the coming years.

BRANCH NETWORK

During the year 2009-10, the Bank has opened 3 branches and 16 Automated Teller Machines. With the above expansion the Bank branch network increased to 216 branches, 7 Regional Offices, 11 Extension Counters, 141 ATMs, 6 Central Processing Centres, 2 Mobile Branch Banking Units, 2 Currency Chests and 1 Service Branch. The Bank is having license for opening of one new branch at Delhi. The Bank is the pioneer in introducing Mobile Branch Banking Unit for the first time in the state of Tamilnadu.

PERSONNEL

The Bank's total staff strength was 2267 as on 31st March 2010, consisting of 902 Officers, 962 Clerks and 403 other members of staff. The per employee business has increased from Rs.67.900 Millions to Rs.87.000 Millions as on 31st March 2010. The profit per employee increased from Rs.0.643 Million to Rs.0.814 Million.

The Bank continues to lay emphasis on developing the individual skills of its employees and providing a healthy and congenial working environment so as to get maximum contribution from the employees of the Bank.

The Bank's Staff Training College at Nagercoil conducted 34 programmes, imparting training to 390 Officers, 379 Clerical employees and 44 subordinate staff during the year.

In addition to the in-house programmes, 283 officers were deputed to other institutions in India like SIBSTC-Bangalore, NIBM-Pune, IDRBT- Hyderabad, FEDAI and other training institutions for attending training programmes.

Industrial relations in the Bank continued to be very cordial during the year with frequent interaction between the management and the Officers' and Employees' Associations and various staff welfare activities were undertaken during the year.

CONTINGENT LIABILITIES

Particulars	31.03.2010 Rs. in Millions
i. Claims against the Bank not acknowledged as debts	52.570
ii. Liability on account of outstanding forward exchange contracts	12245.984
iii. Guarantee given on behalf of constituents in India	7141.545
iv. Acceptences, endorsement and other obligations	4204.093
v. Estimated amount of contracts remaining to be execut4ed on capital account and not provided for	13.519
Total	23657.711

As Per Web Site:

Generis and Growth

The history of Tamilnad Mercantile Bank Limited, the then Nadar Bank Limited, dates back to 1921. The thought of establishing a bank under the guidance of the able Nadar business community was mooted out in the Anniversary of Nadar Mahajana Sangam held at Tuticorin in 1920. The proposal was effected soon. The bank was registered on May 11, 1921 as "The Nadar Bank Limited"

A group of dedicated men with shrewd acumen and sound integrity had been constituted as Board of Directors and they elected Shri. M.V. Shanmugavel Nadar as Chairman on Nov 04, 1921. The bank was opened by Shri. T.V. Balagurusamy Nadar, the then President of the Nadar Mahajana Sangam and the bank threw open its door to the public on Nov 11, 1921 at 9 a.m. in Ana Mavanna Building at South Raja Street, Tuticorin.

Customer Service

Tamilnad Mercantile Bank Limited, focused its attention on the customers from the very beginning and the bank is known for its personalized service. The team of management and staff members of the bank are having the practice of meeting people from various walks of life and hear their requirements on a regular basis.

Pan India Branch Network

bank was having only 4 branches in the year 1947 at Tuticorin, Madurai, Sivakasi and Virudhunagar. The bank had also a branch at Colombo in the year 1937 and the same was closed in the year 1939. The bank has now 232 full fledged branches all over India, 7 Regional Offices and 11 Extension Counters, 2 Mobile Banking Branch, 6 Central Processing Centres, 2 Currency Chests and 170 Automated Teller Machines. All the 232 branches are computerised and all the 232 branches are interconnected. The first branch outside the State of Tamilnadu was opened in the year 1976 at Bangalore. The first fully computerized branch was opened at WGC Road, Tuticorin on Dec 09, 1984. The bank had established its first currency chest in 1993 at Madurai and has the industrial finance branches at Coimbatore, Chennai and Secunderabad. The Bank has launched ATM Card from Nov 11, 2003. Here is a list of the Completely Networked Branches.

Branch Sharing Tie Up

Now, You can purchase Demand Drafts on 570 additional locations through out the country in addition to 232 TMB Branches. The tie-up arrangements with IDBI Bank (108 locations) and HDFC Bank (462 locations) gives an effective branch network of 802. In all these locations you can send the cheques for collection too. All at no extra cost!

Serving the Rural

The bank has had a vision of extending banking service to common people of rural areas, hitherto neglected, with all humility. The bank dotted more and more rural centers with its branches thereby extending its service area in range, variety and magnitude. Out of 232 branches, 53 branches are located at rural centers.

Growth of Deposits

Augmenting the deposit base is the vital objective of the banks. The bank had introduced novel deposit schemes and continued its efforts towards deposit mobilization and succeeded. The bank which had a deposit base of Rs. 2.101 Million in the year 1921 increased it to Rs. 2.700 Millions during 1946 and to Rs. 18.200 Millions during 1971. Deposit level of the bank as on March 31, 2010 is Rs. 11639 Crore, which pronounces the confidence of the public reposed on the bank.

Growth of Advances

Tamilnad Mercantile Bank Limited, concentrated its efforts to meet the genuine requirements of various sectors of the economy and advanced to the needy sectors of the society. The bank has taken it as a challenge to participate in various Government sponsored schemes and extended its support in uplifting the downtrodden in the society. The bank has taken up, the assistance to various industrial and export sectors, as a thrust area and granted loans to the needy clients. The level of advances which stood at Rs. 5.200 Millions in the year 1962 has spurted to above Rs. 82880.000 Millions now. The bank has a sound portfolio of advances consisting a wide basket of retail finance. The bank as a matter of policy grants advances to retail segments consisting of retail traders and business enterprises.

Profitability

The bank, which had a Net Profit of Rs. 6984.00 in the year 1921 had spurted its profit to Rs. 0.505 Million in the year 1971 and Rs. 1845.300 Millions for the year ended March 2010. The high level of profit earned by the bank enabled to build up and sustain the high level of reserve base. The Profitability trend continues this year also.

Tamilnad Mercantile Bank Limited, is one of the very few banks having very high reserve base and its earnings per share remains the highest.

Profit to Share Holders

Tamilnad Mercantile Bank Limited, is the only bank in India declaring consistently higher rate of dividend to its shareholders from the very beginning. The bank had declared 6% dividend to its shareholders in 1921. The rate of dividend has been on increasing trend. The Bank declared a dividend of 1000% for each of the financial year ended on March 31, 2006 and 2007. The dividend proposed by the Board of Directors for the financial year ended March 31 2008 was 5000%

Dedicated Work Force

Tamilnad Mercantile Bank Limited, is very fortunate in having dedicated employees at all levels who have been energetic and working with untiring zeal for the good growth and prosperity of the institution for the past 89 years. The name and fame of the bank are in a large measure, due to the efficient and diligent service of the highly loyal staff members and officers. This has enabled the Bank to adopt the official motto "Totally Motivated Bank".

PRESS RELEASE

TMB Net Profit zooms by 62.68% on y-o-y basis

Shri.A.K.Jagannathan, Managing Director and CEO, Tamilnad Mercantile Bank Limited, Head Office, Thoothukudi in a release to the press has informed the unaudited financial results of the Bank forthe Half year ended September 30, 2010 as follows:

1st Half Year Scorecard

(Rs. in Millions)

Particulars	2010-11	2009-10	% of growth
Operating Profit	1905.900	1144.600	66.51
Net Profit	1113.900	684.700	62.68
Net interest Income	2461.200	1626.500	51.32
Other Income	842.000	576.800	45.98
Deposits	117235.100	97744.500	19.94
Advances	87376.100	69735.300	25.30
CAR (%) Basel I	13.78	13.86
CAR (%) Basel II	15.11	15.66
Return on Assets (%)	1.61	1.20
Return on Equity (%)	18.51	13.32
Net NPA (%)	0.54	0.45
NIM (%)	4.01	3.27
CASA deposits (%)	25.09	23.96

Our bank’s net profit has increased by 62.68% at Rs.1113.900 Millions from Rs.684.700 Millions on year on year basis. The growth in non interest income was at 46%. The Total Deposits have increased by 19.94% to Rs.117235.100 Millions from Rs.97744.500 Millions on year on year basis and the Advances have increased by 25.30% to Rs.87376.100 Millions from Rs.69735.300 Millions. The Total Business of the Bank has increased by 22.17% at Rs.204611.200 Millions from Rs.167479.800 Millions. The CASA Deposit has increased by 25.64% to Rs.29419.200 Millions from Rs.23415.800 Millions on year on year basis.

Return on Assets (Annualized) jumped from 1.20% to 1.61%.

The bank was able to recover NPAs Rs.253.000 Millions (Rs.217.000 Millions) during the Half year ended September 2010. Due to various efforts taken recovery from Head Office transferred accounts amounted to Rs.116.000 Millions (Rs.28.200 Millions). The provision coverage ratio was 80.03% as on 30^th September 2010 as against the norm of 70 % stipulated by Reserve Bank of India.

The bank gives continued thrust on the growth of CASA deposits. To attract High Networth Individuals (HNI’s) the bank has recently launched “TMB Royal Savings Bank Account scheme” with a lot of value added services. The Bank is confident of achieving the total business of Rs.260000.000 Millions within March 2011. The Bank plans to venture into Bancassurance tie-up for life insurance business.

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.45.27
UK Pound	1	Rs.72.95
Euro	1	Rs.63.08

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	8
--PROFITABILIRY	1~10	7
--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	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		70

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.