MAHESH BANK

Dear Members,
On behalf of my colleagues on Board and myself, I warmly welcome you to the 33rd Annual General Body Meeting of your bank. Copy of the Annual Report has been furnished to you well in advance. With your consent, I take them as read.

ECONOMIC SCENARIO

The year 2008-09 was a very challenging year for the global economy since the great depression of thirties. The financial market turbulence, which originated in the U.S., quickly spread to other economies.

The advanced countries faced massive economic downturn with sharpest decline in GDP growth ever witnessed since 30’s, crippled industrial activity, unprecedented job losses, falling inflation indicative of deflationary pressure, and shrinkage of global trade. These developments changed the financial scenario in United States and Europe in particular.

INDIAN ECONOMIC AND BANKING SCENARIO

Indian economy was impacted mainly on account of reversal of capital inflows and sharp decline in exports which directly affected lead sectors like textile, real-estate, infrastructure, aviation, automobile, housing and information technology. However unlike the developed economies, where the problems started in financial sector and spread to realty sector, in India, the problems started in realty sector and spread to the financial sector. This, in my opinion, has immensely reduced the severity of impact of economic meltdown on the Indian economy.

The Government and the RBI have taken timely and proactive measures to contain the fallout of global crises on the Indian economy. These included both fiscal and monetary measures aimed at ensuring adequate liquidity in the system, lowering interest rates, specific steps to help industrial sectors affected by the downturn, assisting export sector and measures for stabilizing foreign exchange market, revival of capital flows and rationalization of duties.

PERFORMANCE OF YOUR BANK

I am extremely happy to report that amidst all adversities, your Bank has completed yet another year of accomplishments. Business has crossed the milestone of Rs.1,000 crore, to stand at 1019 crores (21% growth over previous year), consisting of total deposits of Rs.640 crore (24% growth over previous year) and advances of Rs.379 crore (16% growth over previous year).The position has further improved with the business level increasing to Rs.1091 crores consisting of deposits of Rs.700 crores and advances of Rs.391 crores.

You will be happy to note that the Profit earned by your Bank for the year 2008-09 at Rs.16.29 crore, was the highest ever and recorded 12% growth over previous year. I am happy to inform that Board of Directors of your Bank has proposed a dividend at the rate of 22%, as against 20% declared previous year.

Your Bank has performed well in other areas too. Gross Non Performing Assets reduced from 3.77% to 2.84% and Net Non Performing Assets continue to be Zero for the 5th consecutive year. Capital Adequacy Ratio stood at 31.70%. The productivity has improved substantially as evident from increase of per employee Business from Rs.1.88 crores to Rs.2.30 crores and Profit per employee from Rs.3.26 lakhs to Rs.3.44 lakhs.

Your bank has always been committed towards its social responsibility. In line with the trends of the past years, the Bank surpassed all targets under priority sector lending. Priority Sector Advances stood at 84% of net adjusted credit.

EXPANSION OF BRANCH NETWORK

To enable your Bank to reach farther areas in the twin cities, 3 more branches will be opened at Vanastalipuram, AS Rao Nagar and Karkhana by the end of this year, taking the local branches’ to 25 and total branches' tally to 33.

PROGRESS UNDER ALLIED ACTIVITIES

You will be happy to know that Bank, in association with its insurance partner Max Newyork Life Insurance is capitalizing on the network of branches and strong customer base of our bank and is making in roads into the domestic insurance market.

Your bank is also providing quick remittance facility from abroad through Money Transfer, in association with Western Union Money Transfer and Reliance Money. Customers can also avail foreign exchange services at our designated branches.

AWARDS AND ACCOLADES

The brand “Mahesh Bank” stands for Growth, Quality and Trust. I am extremely pleased to announce that the bank, for its head office, received ISO 9001 : 2008 certification which certifies quality management systems for rendering various services.

CUSTOMER SATISFACTION TO CUSTOMER DELIGHT

In our quest to provide varied facilities to the customers, bank has introduced various customer centric facilities. Some of them are - Single window concept to provide all banking services at any counter and SMS banking facility.

Efforts are in progress for tie-up with other banks for providing ATM sharing facility across the country to our customers.

FUTURE PLANS

Inspired by the 1000 crore business achievement, your bank by the year 2020 plans to achieve a business of Rs.10,000 Crores, profit of Rs.100 Crores, Low cost deposit ratio of 30%, CD ratio of 70%, Gross NPA to be maintained below 3%, Net NPA at Zero and 100 branch + ATM net work.

During the current financial year, lot of thrust is being given to increase the profitability of the Bank and the immediate measures taken to achieve this ambition are:

• Emphasis to increase low and no cost deposits like Savings & Current accounts.
• Priority to increase credit portfolio of the Bank and in this direction 2 schemes viz., Credit Against Property and Gold Overdraft facility were revived keeping in view the needs of the customers.
• The non-interest income particularly commission earned on insurance business is encouraging and we are aiming to boost up this segment as one of the important sources of income to the Bank.

With the unstinted support from all the quarters, I am confident that your bank is likely to achieve the targets set.

OBITUARY

I deeply mourn the sad and untimely demise of my colleague director Sri Bhagwandas Jaju who left for heavenly abode on 15.06.2009. The Board offered its condolences to his family and remembered his contribution in bank’s development.

Bank’s Foundation Day Celebrations

The foundation day of your bank was celebrated on 9th of August, 2009 with lot of enthusiasm and joy at Shilpakala Vedika in Hi-tech city. The event was all the more festive with the formal launching of Core Banking Solutions by Dr K C Chakrabarty, Dy. Governor, RBI. Sri K Rosaiah garu, Hon’ble Minister for Finance and Planning, Government of A.P., has graced the occasion as Chief Guest. Sri Rajendra Kumar Tiwari, Central Registrar of Co-operative Societies, New Delhi, and Sri D R Garg, Commissioner for Co-operation, Government of A.P., were Guests of Honour. The bank had also celebrated the momentous achievement of surpassing Rs.1,000 crore business mark.

Sri R Krishna Mohan, Regional Director, RBI and Sri B D Prasada Rao, General Manager, Urban Banks Department, RBI, Hyderabad, were also present as special invitees. Our esteemed Customers, Directors, Former Directors and Staff Members have joined the celebrations with great enthusiasm and made it a memorable event.

The distinguished guest, Dr K C Chakrabarty had appreciated the bank for adapting to latest technology by implementing Core Banking Solutions. He further impressed upon the Bank the need for bringing the low income group into the ambit of banking and advised the Bank to implement the concept of financial inclusion more vigorously.

Hon’ble Minister Sri K. Rosaiah garu, in his speech, had appreciated the financial strength of the bank and praised, the achievements and introduction of Core Banking Solutions as a technological advancement, of the bank.

Sri Rajendra Kumar Tiwari, Central Registrar of Co-operative Societies, and Sri D R Garg, State Commissioner for co-operation have congratulated the bank for the progress made by it under professional and competent management.

The function was a grand success.

ACKNOWLEDGEMENTS

I take this opportunity to express my sincere gratitude and acknowledge the unstinted support provided and unfaltering faith reposed by you in the Board of Directors, management and employees of the Bank, which has enabled us to take the bank to great heights in the recent past. I have no doubt that your trust, encouragement and patronage will continue to motivate and guide the Bank in the days to come.

I thank my colleagues on the Board and in particular Professional Directors, Sr. Vice-Chairman and Vice-Chairperson for their wise counsel in the overall development of the bank.

I thank all our patrons and customers for their trust and support.

My special thanks to the officials of RBI, Central Registrar of Co-operative Societies, New Delhi, State Registrars of Co-operative Societies of A.P., Rajasthan and Maharashtra States and other regulatory authorities for their continuous support and guidance. I sincerely acknowledge the contributions made by the Auditors, Legal Advisors, Consultants and Arbitrator.

I thank the NAFCUB, A P State Co-op. Urban Banks’ Federation Ltd. for taking up issues of co-operative banks with appropriate authorities for remedial measures.

I, alongwith my colleagues on Board, place on record our appreciation of the services rendered by the Managing Director, Senior officials and staff members of the bank for their dedicated service and look forward to their continued co-operation in the bank’s efforts to scale new heights in business performance and customer service.

"Jai Hind"