Directors Reports

DIRECTORS’ REPORT
REPORT OF THE BOARD OF DIRECTORS COVERING
PERIOD FROM 1ST APRIL 2016 TO 31ST MARCH 2017

Dear members,
Your directors have pleasure in presenting the 19th Annual Report, of our Bank together with the Audited
Balance Sheet, Profit & Loss Account and Auditors’ report for the year ended 31st March 2018.
The Banking industry in general was in very difficult situation and many of the fundamentally strong banks
were in losses due to various reasons. Our Bank also faced such difficult circumstances / situations and
overcome the situations.

MEMBERSHIP AND SHARE CAPITAL:
The membership has increased by 7 New Members from 6195 as on 31.03.2017 to 6202 as on 31.03.2018.
Capital is marginally increased by Rs. 25.49 Lakhs, from Rs. 289.43 Lakhs to Rs. 314.92 Lakhs as on 31.03.2018.

BANK’S PERFORMANCE:
DEPOSITS:
The break-up of the deposits are as under: (in Lakhs)

  As on 31.03.2017 As on 31.03.2018 % Growth
A. Current Deposits Rs. 313.31 Rs. 626.29 99.89
B. Saving Deposits Rs. 876.69 Rs. 620.98 -29.17
C. Fixed and Other
Term Deposits Rs. 4507.52 Rs. 3679.36 -18.37
Total Rs. 5697.52
Rs. 4926.63
– 13.53

The increase in savings deposits are due to marketing of our technologically upgraded products like SMS
Alerts, RTGS, NEFT, Tax Payments, introduction of insurance to Savings Depositors, introduction of Debit
Cum ATM Cum Privilege Card, Seeding of Aadhaar Card etc.
The savings deposits / low cost deposits are increased satisfactorily with good growth rate 4.8%
Average cost of Deposits for the period is improved to 9.03 % as against earlier period level of 9.58 %.
The deposits have been insured and DICGC premium fee is paid upto date

Mix of Deposits

31.03.2017    31.03.2018
A. Current Deposits 5.50 % 12.71%
B. Saving Deposits 15.39 % 12.60%
C. Term Deposits 79.11 % 74.69%
Total  100.00 % 100.00 %

The low cost deposits are improved from 20.89 % to 25.31 % .
Your Directors are striving very hard to increase low cost deposits to improve the profitability of the
Bank and more efforts shall be put in the current year to have a very healthy mix of the deposits.

LOANS AND ADVANCES:
The loans and advances of the Bank as on 31.03.2018 are 3486.42 lakhs as against 2977.15 lakhs last
year, recording a increase of 509.27 lakhs with a negative growth rate of 17.11 % due to closure of long
standing larage NPA accounts and large borrowal accounts. Addition of new borrowal accounts was
overshadowed by the closure of accounts. The Bank’s Credit to Deposit Ratio is 70.77 %, which indicates
efficient deployment of lendable funds and our CD Ratio is as per directives issued by the RBI. We shall
improve further during current year to improve the profitability.

AGGREGATE BUSINESS:
During this year your bank has the overall aggregate Business of 8413.05 lakhs.

INVESTMENTS:
The Bank held the following investments as on 31.03.2018

Government Securities  Rs. 1393.47 lakhs
Mutual Funds.                 Rs. 300.00 lakhs
Fixed Deposits                Rs. 260.71 lakhs

Total                                  Rs. 1954.18 lakhs

The minimum stipulation of 19.5 % in Government securities to meet the SLR is adhered to by our bank.
It may be observed that the entire investments are in government and other approved securities only.
The surplus funds were properly deployed for better yield thereby our other income is improved considerably.

NPA’s:
Due to our best efforts, our Gross NPAs are considerably decreased from 3.79% to 2.55 % and Net NPAs
are considerably reduced from 0.32% to Nil NPAs during 2017 -18. In absolute terms, Gross NPAs are
considerably decreased to Rs. 89 lakhs against Rs. 112.74 lakhs of last year and Net NPAs are considerably decreased to Rs. nil against Rs. 9.07 lakhs of previous year. The reductions in NPAs is mainly on account of materilisation of Public Auction of securities.

Gross NPA :      31/3/2017               Rs. 112.74 lakhs              3.79%
Gross NPA :      31/3/2018               Rs. 89 lakhs                        2.55%
Net NPA           31/3/2017               Rs. 9.07 lakhs                       0.32%
Net NPA            31/3/2018             Rs. Nil                                        Nil

ESTABLISHMENT CHARGES:
Our Bank’s establishment expenses are: Rs. 48,12,600/- as against Rs. 44,68,439/- of last year.

  Actuals as against Permissible limit
a). On Working Capital 0.82 % 2%
b). On Gross Profit 25.36% 30 %

PROFIT & LOSS ACCOUNTS:
Your Bank has earned a Net Profit before tax of ` 97.47 lakhs for the financial year 2017-2018 where as it
was ` 99.01 lakhs last year . The net profit after tax stood at ` 67.16 lakhs in the Financial year 2017-2018
as against ` 68.55 lakhs of last year.

RESERVES AND FUNDS:
After proposed appropriations from the profit for the year 2017-2018, the position of Reserves and Funds
of the Bank are as shown below:
(Amt In Lakhs)

As on 31.03.2017 Addition after proposed  appropriation As on 31.03.2018 % Growth
1. Statutory Reserve Fund 238.30 16.79 255.09 7.05
2. General Reserve Fund 342.02 12.32 354.34 3.60
3. Other Funds 20.62 0.82 21.44 3.98
4. Special Reserve fund  U/s 36(1)(VIII) 19.49 19.49
Total 620.43 29.93
650.36
4.82

NET WORTH:
The Working Capital of the Bank is as under:
Date                             31.03.2017                                       31.03.2018

Share Capital         289.43 Lakhs                                   314.92 Lakhs
Reserves (Free)   620.43 Lakhs                                    650.36 Lakhs
Deposits                  5697.52 Lakhs                                 4926.63 Lakhs
—————— ——————
Total:                          6607.38 Lakhs                                5891.91 Lakhs
—————— ——————
Less: Fixed Assets  36.44 Lakhs                                   29.70 Lakhs
Total:                         6570.94 Lakhs                                5862.21 Lakhs

The working capital of our bank has decreased by ` 708.73 Lakhs due to reduction is aggregate deposits.
The Net Worth of the Bank is improved from ` 900.50 lakhs to ` 956.10 lakhs with a marginal growth
of 6.17 % .
We are happy to mention that CRAR (Capital to Risk Assets Ratio) of our Bank for the year is 25.91 %
indicating more stability. As per RBI directives the minimum CRAR should be 9 % and our capital
adequacy ratio is much higher, which is a very healthy sign.
DIVIDEND:
Your directors have great pleasure in proposing a DIVIDEND @ 14 % for the year 2017-2018. This is
subject to approval of share holders. Our Bank declared a dividend of 12 % last year. We hope next year
our working will further improve.
AUDIT:
Concurrent audit is being carried out in the Bank, in addition to Statutory Audit. We have appointed
M/s. B. Nagaraja Rao & Associates, Chartered Accountants to conduct Statutory Audit of the Bank for the
year 2017-2018. Your directors are pleased to inform you that bank is classified as ‘A’ grade, in audit
classification, continuously for the 18th year in a row.
HELP TO NEEDY (SOCIAL BANKING):
Maintaining the tradition, our Bank extended help by way of donations to various philontropic organsations
who are extending help to the needy persons as well as widows, orphans, students and weaker sections of
the Society.
TRAINING AND DEVELOPMENT:
All the staff members were given training in various subjects to equip themselves and to achieve higher
skills. The staff were also deputed to Seminars and training programmes conducted by Telangana Federation
for Co-operative Banks and external training institutes like Vaikunth Mehta National Institute, College of
Agriculture Banking, Pune.
CUSTOMER SERVICE:
We have designated exclusively an Officer to respond to the needs of customers on phone, while continuing
in the bank premises to attend to the customers. To give special attention, Chairman will be available along
with other Directors on all Wednesdays in the bank premises from 3 PM to 5 P.M. Thus we could bridge
the gap between bank and the customers.
KNOW YOUR CUSTOMERS NORMS (KYC):
The Bank has tried to fully follow the KYC Norms as prescribed by RBI.

OTHERS:
We mention below the important achievements of our bank.
1. The CRAR (Capital to Risk Assets Ratio) under Basel II of our Bank as on 31.03.2018 is improved to
25.91 % as against minimum norm of 9% stipulated by RBI.
2. The Net Profit after tax is reached  67.16 lakhs which is satisfactory.
3. The Profit per employee has reached to a level of  4.48 lakhs.
4. The Productivity/Business per employee is at satisfactory level of ` 560.87 lakhs which shows good
productivity.
5. Our lending to Priority Sector is satisfactory and in conformity with RBI directives. Our lending to
Priority Sector as at 31.03.2018 was  3088.12 lakhs constituting 78.89 % of aggregate advances,
surpassing the RBI target of 40 %.
6. The gross N.P.A. is reduced from 3.79% to 2.55%, Net NPA is reduced from 0.32% to Nil which are
well within the RBI norms.
OUTLOOK FOR CURRENT YEAR:
In view of the present economic scenario and policies of RBI, your directors have estimated a pre-tax profit
of ` 106.85 lakhs and net profit after tax i.e.,  77.20 lakhs for the current year 2018-2019 as per Budget
Proposal for your approval.
ACKNOWLEDGEMENT:
The Board acknowledges its deep gratitude to Reserve Bank of India and Department of Co-operation,
Government of Telangana State for their valuable support, guidance and encouragement. The Board also
acknowledges and sincerely thank for the timely guidance rendered by the Telangana State Coop Urban
Bank” federation limited. Thanks to valued customers and members for their continued support, confidence
and trust reposed in our Bank.
The Board also wishes to place on record its appreciation for the services rendered by the Officers and
members of Staff.
I will be failing in my duty if I do not thank my Co-directors, Vice-Chairman and Advisor who have contributed
in the growth of the bank and for the guidance and unstinting support.

Hyderabad                                                                                 (AJIT GUPTA)
Date: 23-08-2018                                                                          Chairman